Archive for September, 2013

Pension Reform From The 2020 Memphis Growth Plan

Thursday, September 26th, 2013

September 26, 2013

 

As I read through this massive document I want to point out some of the good suggestions from the ridiculous ones. I have attached a section entitled “Implement Strategies to Lower Volatility of Pension ARC

 

SAY WHAT?

The Pension ARC is the annual required contribution necessary to fully fund the promised pensions. For the plan year ended June 30, 2012 this figure was $89 million dollars. WOW!! The City of Memphis put in 22.6% of this. The difference in the ARC and what the City actually contributed of course adds to the unfunded liability plus the interest on the difference.

 

The suggestions from the plan are as follows.

 

  • Freeze cost of living (COLA) adjustments until the plan achieves 90% funded status.
  • Contribute the full ARC each year. Where is the Money ($69 million) coming from?
  • Close the current defined benefit pension plan and begin a defined contribution plan.
  • Extend the City’s 2011 pension reforms to non-vested employees. Extending the 2011 reforms to all non-vested employees (47.7% of total employees) would reduce the ARC by $5 million in 2014 and by $28.2 million from 2014 through 2018.

 

Read through the report and let me know if you think any of this is really going to happen. The answers are there to make real reforms (more…)

Put Your MLGW Bill On Your Credit Card

Monday, September 23rd, 2013

Put Your MLGW Bill On Your Credit Card

 

My Wife is much more alert to prices and deals then I am. However recently I found out that the MLGW will now let me put my MLGW bill on my credit card. Most government agencies charge at least a 2% fee to let you pay your tax bills or other fees by means of a credit card.

 

Since I earn air miles on my credit card and because it delays the payment of the bill I decided to sign up to pay my MLGW bill on my credit card. Why not? I went to the website and tried to set it up. I got to one point in the setup screens and got hung up and could never complete the setup. I eventually called and got it completed. Now my bill will automatically be paid by my credit card and I will get an electronic copy of the bills for my records.

 

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Chickens Coming Home To Roost

Thursday, September 19th, 2013

September 19, 2013

 

For three days running there have been lead articles in the CA about our City of Memphis pension unfunded liability.

 

Finally yesterday, they mentioned the even greater OPEB unfunded liability (cost of health care for retirees).

 

I have attached the report from PWC consultants for your review. Read it at your leisure but here are some highlights.

 

 

  • Despite better than average asset returns for 2010 and 2011, the plan’s funded status will continue to deteriorate, from $682 million to $740 million.

 

  • Assuming no other changes, it is estimated that it would require an annual asset return of 13% over each of the next 10 years in order to fully fund the plan.

 

  • Conclusion: Based upon the actuarial assumptions used to determine the plan’s liability and ARC, a projection of a workforce similar in size to the current one, and the current funding policy of 6.0% of compensation, the plan is not sustainable in the long-term.

 

Over the next several weeks I will review the report and report its salient points. However I want to attach a report that I received (more…)

Legal Costs -Memphis versus Shelby County

Monday, September 16th, 2013

September 16, 2013

 

I am reviewing another part of the Shelby County Efficiency Review, Legal costs. Ugh! I will be the first to admit that good legal advice is necessary in our litigious society. So let us look at the County versus the City.

 

I have attached some pages from the City budget and the County budget. The County budget for the County Attorney’s Office is $3.7 million for 35.5 people. This includes legal services for the County Commission. From this in the future, if the suggestions are adopted, they propose to cut $300,000.

 

Now look at the City of Memphis. Their actual expenses for FY2012 were $13.6 million with 58 people. Their proposal for 2014 is $9.5 (more…)

Memphis 2020 Growth Plan??

Thursday, September 12th, 2013

September 12, 2013

 

As I start reading through this massive document I have to start with the introduction and rationale of the plan. Here are the first 26 pages of the draft plan.

 

To be a successful urban area, Memphis has to do the following.

 

  • Increase property values
  • Decrease poverty
  • Ensure government efficiency
  • Improve neighborhoods
  • Invest in human capital
  • Grow the economy

 

Wow!! What great ideas. Why did I not think of those?

 

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Memphis 2020 Growth Plan “Investing In The Future”

Monday, September 9th, 2013

September 9, 2013

 

Strategic Five-Fiscal and Management Plan

 

I have been reading through the huge five year City of Memphis Management Plan prepared by the Mayor’s Office of Strategic Planning and the PFM Group involving Rick Masson and V. Lynn Evans.

 

It is fascinating and full of information. It will take me some time to digest it. As I do I will let you, the tax paying public, share in the (more…)

Outsourcing To Save Money

Thursday, September 5th, 2013

September 5, 2013

 

I have been reviewing the various parts of the Shelby County Efficiency Report and it has been very interesting and informative. The PFM group has identified a number of areas with a great potential for savings such as health care premiums, OPEB, sick leave carryover and paid time off excesses. All of these are legitimate areas of great savings and the only thing standing in the way is getting seven votes from the County Commission.

 

Here is another one that makes sense and one that really gets at the heart of the problem with the County Commission and the City Council. Most of these politicians see City and County government as a source of jobs for their constituents. Their first instinct is to (more…)

A Backdoor Tax Increase

Tuesday, September 3rd, 2013

September 4, 2013

 

At the last meeting of the City Council (August 20, 2013) they passed the smart meter resolution. There was also on the agenda an item for a resolution to approve the 2014 Street Lighting Schedule of Fees. This item was delayed until sometime in September.

 

Let me get this straight. This is an expense that is covered by the services paid for by property taxes. Now the City Council wants to take it out of their expense budget and bill it directly to the taxpayers through the MLGW billing process. If you will look on the back of your MLGW bill you will see that you are already being billed directly for the following.

 

  • Sewer Fee (Memphis)
  • Solid Waste Fee (Memphis)
  • Storm Water Fee (Memphis)
  • Mosquito/Rodent Control Fee (Shelby County)

 

Now they want to put a street lighting fee on your bill directly instead of raising your property taxes.

 

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