Archive for February, 2014

Shelby County Head Start

Tuesday, February 25th, 2014

 

February 25, 2014

As I was reviewing information from the County concerning the new 2014 healthcare rates for active employees I came across a listing for rates for 10 month employees. I asked about this and they told me that these were the employees for the Shelby County Head Start Program. I remembered the proposed 1/2% sales tax proposal for the City for a pre K type program which failed to get the votes. However I did not know about the County program. I asked how many employees were involved, what did it cost and who was paying.

The County is great and fully transparent about answering questions in contrast to the City of Memphis, the old Memphis School System and the new Shelby County School system.

Well here are some details. The Executive Director is John Lovelace and he is paid a salary of $116,471.00 per year. According to (more…)

Health Care For Public Retirees

Thursday, February 20th, 2014

February 20, 2014

Health Care For Public Retirees

This is another huge cost area for which the taxpayers are paying. You are paying 70% of the health care cost for City of Memphis and Shelby County retirees and 75% of the cost for MLGW retirees. The bills come each year for medical care for retirees and their families and the current annual bills are paid by the City, County and the MLGW as they occur.

But like pension liability, there is a future cost liability that is supposed to be taken care of by the OPEB funds (Other Post Employment Benefits), mainly future health care costs and life insurance for retirees). This is where the problem lies, mainly with the City of Memphis, and to a lesser extent with the MLGW and Shelby County.

The unfunded OPEB liability for the City of Memphis is $1.29 billion dollars. For the MLGW it is $420 million and for Shelby (more…)

Line Of Duty Disability Reform

Thursday, February 13th, 2014

February 13, 2014

There are lots of things that need reform in the Memphis pension system and we have talked about the need for going to a defined contribution system rather than the current defined benefit system. Hopefully we will get there if the Mayor and the City Council do the right thing.

However I have often spoken about the need for line of duty disability reform. The Memphis pension board regularly approves applications for line of duty disability applications and has ten times more former employees on line of duty disability than Shelby County government or the MLGW. (These people on line of duty disability get 60% of their final average salary for their lifetime tax free).

Now I find out from Jeni Diprizio (a great reporter for Channel 24) that last month (January 30, 2014) Jason Webb applied for and (more…)

Health Care! What Does It Cost?

Tuesday, February 11th, 2014

February 11, 2014

 

As if Obamacare is not bad enough, trying to compare local health care rates is not easy. But I will make an attempt to compare the active employee rates and the cost to you the taxpayers for the City of Memphis, the County and the MLGW. Here we go.

First you have to look at the plans available in 2014.

The City of Memphis has three options: Premier, Basic and Value plans. Attached is a brief overview. The prices shown in red are what the employee pays twice a month or 24 times per year. This is the 30%. You, the taxpayer, pays the 70%.

The Basic family plan costs the employee $4127 per year. It costs you the taxpayer (70% of total cost) $9630 per year. It’s total cost is $13757 per year.

The Basic plan covering the employee only costs the employee $1944 per year. It costs you the taxpayer (70% of total cost) $4536 per year. It’s total cost is $6480 per year.

(more…)

$9 Million Blown Over Three Years

Thursday, February 6th, 2014

February 6, 2014

In reading through the Strategic Fiscal and Management Plan for the City of Memphis I keep finding things that amaze me as to the past fiscal mismanagement. It is quite clear that the City is supposed to pay 70% of the health care premiums and the employee is supposed to pay 30%. Look at the attached pages 46 through 49 of the plan. On page 46 the employees paid as low as 23.1% and as high as 26.9%. This cost you, the taxpayers, $9.2 million dollars over these three years. I presume the same was true for the OPEB retirees but I am checking. $9 million here, $5 million there and pretty soon you are talking about real money. On top of this mistake by the City, here is what the report says about the history and direction of health care cost, a huge part of the money problem.

On a fiscal year basis, from FY2008 to FY2012, the City’s General Fund contributions to the Basic and (more…)

A New Idea, Trust Free Enterprise

Wednesday, February 5th, 2014

February 3,2014

A Hybrid Pension Plan Proposal

I have been following Mayor Wharton’s proposals in his state of the City speech and in the PFM group’s 5 Year Strategic Fiscal And Management Plan for the City of Memphis. I congratulate the Mayor for hiring this group and for the well written and realistic facts in the plan. I will be commenting on the plan over the next months as the debate rages in the City and the city council.

I have attached here part of the 182 page plan that concerns pension reform. They are recommending various pension plans for unvested (less than 10 years of service) and future new employees. The recommendations include a defined contribution plan or a combination of a defined contribution plan and a limited defined benefit plan similar to what the state of Tennessee has done for teachers and state employees.

Several years ago I participated in a pension reform study for Shelby County which ended up in Plan D for the county for new employees. The City adopted a similar plan for new employees only basically doing away with the disastrous 25 year retirement (more…)