Archive for the ‘Agenda Items’ Category
May 18, 2015
Are Smart Meters A Smart Purchase?
Tomorrow there will be a City of Memphis committee meeting and in that meeting will be the subject of further purchase of smart meters as shown below.
MLGW COMMITTEE (Chairman Berlin Boyd)
- Resolution approving the purchase of a Mobile Energy Efficiency Educational Unit (vehicle) for an amount not to exceed $250,000
- Discussion of opting-out of Smart Meters
- Resolution awarding Contract No. 11776, Smart Meter Solution Full Deployment, to Elster Solutions, LLC, in the funded amount of $240,000,000 for work to be done over a period of approximately five years.
I have received the following email from a friend and a very active citizen in various local public policies.
- 240 million dollars over five years is an astronomical amount of money. The rate payers in Shelby County will be stuck with the bill.
- Firing meter readers and using their salaries to pay for smart meters does not add up. They are not paid that much!
- Please share this with Shelby county friends. I know several people there who spoke out and opted out of smart meters without paying a monthly fee to mlgw. If they had not spoken out, refusing a smart meter would have resulted in a monthly fee.
- The biggest reason for smart meters will be time-of-day-rates. While you will be sold on these rates because they are cheaper at certain hours, those rates will be much higher at other hours (example: summer rates in the afternoon hours 3-8 pm will double).
- Smart meters take usage readings every fifteen minutes and send that information directly to mlgw. Many people consider that an invasion of privacy because your usage patterns are kept by mlgw. Anyone with access can know your routine by those usage patterns. There is also concern that these meters can be hacked.
December 4, 2014
Pension Reform At The City Of Memphis
Finally the Memphis City Council has taken action to address our unfunded pension liability. Eight members decided that we needed reform and took decisive action to get this under control. The unions are not happy and will probably take this action to court in a lawsuit.
Mayor Wharton originally proposed that the City of Memphis go to a defined contribution system for all new employees and those unvested employees with less than 10 years of service. There were, of course, objections to including those unvested employees and later on a different proposal came out from the administration which was a cash balance plan. A cash balance plan needs some explanation and you can read about cash balance plans in the attached article.
In the City Council meeting it appeared that Myron Lowery’s plan which would include only new employees and would have the least savings for the City of Memphis would get the seven votes. However the City Council voted for the Hybrid cash balance plan (8 YES, 5 NO) and only those with more than 7.5 years of service would be covered under the old expensive defined benefit plan. Everyone else as of the start of the plan in 2016 would be under the new plan.
The impact on the unfunded liability of the approved plan in year one would be a savings of 6.8 million dollars and would reduce the unfunded liability in the first year by 60 million dollars. This is as compared to the Myron Lowery plan of zero savings the first year in dollars and unfunded liability reduction.
Again this is not the final decision and according to the commercial appeal this approval will be discussed again in committee in two weeks. Stay tuned. Attached are the Hybrid pension options.
October 21, 2014
A Change In Pension Changes
Just when I thought things were moving in a fiscally responsible direction, here comes another pension change proposal. I do not want to prejudge the proposal but just by reading a description of the plan, it sounds more expensive than what was previously proposed by the Administration. I hope that City elections being less than a year away are not a part of this change but we will see. Here is the information on the proposed new plan that I have to date.
- A letter to employees
- Plan for unvested employees to be sent to a cash balance plan
- Plan for a cash balance plan and a defined contribution plan
What we need is a look at the detailed cost analysis by Segal Consulting, the actuary consulting firm hired by the council. This will be given to the City Council at the private executive meeting today.
Stay tuned as this is only the beginning of a fight to save Memphis and don’t be surprised if the taxpayers are called upon to fill any fiscal gaps caused by coming election thoughts.
October 19, 2014
The November 4th Ballot
The upcoming ballot is important from a national, state and local level. As usual I will tell you how I am going to vote and give you my reasons as succinctly as possible. You, of course, will vote as you see fit based on your own conscience and principles.
For Governor I am voting for Bill Haslam.
For Senator I am voting for Lamar Alexander.
For the 8th Congressional District I am voting for Stephen Lee Fincher.
For the 31th Senatorial District I am voting for Brian Kelsey.
For the 83rd Representative District I am voting for Mark White
If I was in the 9th Congressional District I would vote for Charlotte Bergmann.
If I was in the 30th Senatorial District I would vote for Dr. George Shea Flinn.
Now as to the Wine at retail food stores, City of Memphis, I am reluctantly voting in favor as I have seen this as inevitable and it seems to work in other states without putting individual liquor stores out of business.
NOW THE FOUR CONSTITUTIONAL AMENDMENTS
Amendment #1(Gives Tennesseans back the right to legislate on abortions) – I am voting YES. The US Supreme County has already ruled that abortions are legal. This Amendment would allow the enactment of reasonable medical safety and sanitary provisions to prevent the terrible situation that occurred in the Gosnell clinic in Philadelphia which resulted in the murder conviction of Dr. Gosnell. Also remember that the Planned Parenthood v. Sundquist case (TN Sup Ct 2000), effectively prohibited any TN regulation, even for the safety of the mother. That’s why the approval of this amendment is crucial.
Amendment #2(Changes the way the Supreme Court or Appellate Judges are appointed) – I am voting NO. This is a close call but I trust informed common sense voters more than I trust the legal profession. I could go along with this amendment if it had a term limit provision limiting judges to one eight year term. Then at the end of a distinguished private legal career, outstanding fair minded lawyers could finish their career on the bench. Otherwise I would rather let the voters decide rather than lawyers and politicians.
Amendment #3- (Prohibits any Tennessee tax on payroll or earned income). YES, YES, YES
Amendment #4- (Empowers the General Assembly to permit lotteries). I am voting NO. I am against gambling in general and there has been corruption in these lotteries in the past.
FINALLY- For City of Memphis voters there is a little understood Memphis City Ordinance change to Ordinance #5512 to Improve Effectiveness of Civil Service Hearings. I am reluctantly voting YES for the amendment as I have been assured by the proponent of this amendment (City Council member Kemp Conrad) that it will help reduce the backlog of civil service cases and make it easier to discharge non productive employees of the City. It seems strange that this proposal is adding 7 members for a total of 14 members of the Civil Service Commission and asking to pay them $400 per day (or more) whereas the Shelby County’s civil service merit board has 5 members who are paid $50 per day and seems to be quite efficient. I think the difference is the culture of the City versus the County. The City has a history of tough union agreements and the unions support keeping their members employed by the City regardless of their job performance and history.
I will be glad to answer any questions that you might have about the election. Vote your preference but please vote.
October 7, 2014
Finally A Defined Contribution Pension Plan
Today the City Council will consider a defined contribution pension plan for City employees with less than 10 years of service (as of July 1, 2015) and new employees hired after that date. I have been recommending this for years and finally the City Council will consider this reasonable plan. Here are the proposed ordinances.
I have been recommending a defined contribution pension plan for years ever since I was on the Shelby County pension revision committee. This is fair for the private sector taxpayers who generally have no defined benefit retirement plan. It will probably be better for those City of Memphis employees in the future if the City’s pension investments perform as they have over the last 25 years (over 9% return).
Will the City Council and the Administration follow through and pass these ordinances? We will see but you have to consider that a year from now there will be an election for the new City Council and the city Mayor. What do politicians do when faced with an upcoming election? You have to look no further than the upcoming November 2014 national election. These changes are needed and should also apply eventually to the MLGW. Shelby County should adopt a similar plan but only for new employees, not those currently employed but not vested. This exception is in recognition of their past good fiscal responsibility as compared to the City of Memphis.
June 5, 2014
More Talk, Delays And No Answers
The clock is ticking and all we get is more delays and can kicking down the road from the city Council. Positions seem to have hardened. Janice Fullilove and Joe Brown are in the “over my dead body” camp. Bill Boyd has ruled out any retiree OPEB reductions for health care. Jim Strickland and Shea Flinn want to pay up in 2 years instead of 5 but don’t come up with where the money is coming from.
The most clear eyed vision seems to come from the PFM January 2014 City of Memphis Fiscal and Management Plan. For instance on page 46 while employees were supposed to pay 30% of the cost of health insurance, the City only collected 24.2%, leaving the taxpayers to pick up nearly $4 million in cost left on the table. This under billing has been going on for a number of years. Then on page 43, we see that we pay employees (Fire and Police Services) college incentive pay amounting to $6 million per year.
NEWS FLASH FROM THE BAT CAVE. IT IS REPORTED IN THE MORNING PAPER THAT THE CITY HAS A NEW POT HOLE BAT TRUCK REPORTED TO FILL HOLES FASTER AND CHEAPER. THE MAYOR ASKS ALL CITIZENS TO REPORT ALL HOLES DEEPER THAN KNEE HIGH.
Then on page 130 we see that one of the biggest problems we have in Memphis (potholes) is reported. According to the Division, the number of lane miles pavedl has dropped from 236 in 2007 to 105 in 2011, a decline of 56%. “WATCH OUT, HOLY POT HOLE BATMAN”.
As to the proposed health care cost reductions, this is where the real money is. According to the Affordable Care Act, costs will be reduced by $2500 dollars per family, you can keep your doctor and you can keep your plan. PERIOD. Let us take them up on this promise.
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…)
January 28, 2014
For a number of years I have received the agenda for the monthly meeting of the City of Memphis Pension Board. I have attended a number of these meetings. Here are a few things that you need to know.
1) The board consists of the Mayor, the Comptroller and five employees with at least ten years of service, a retiree and only one citizen member. So it is obvious that this is rigged to approve whatever the employees want within the pension ordinance. Temporary Mayor Myron Lowery tried to appoint me to the board a few years ago and the Council voted it down.
Being familiar with meetings and agendas, I noted the agenda for the next meeting this Thursday, January 30. There were listed 30 DROP applications which will cost the City $1.62 million dollars per year in pension payments over the next three years while the DROP applicant is still working. Then I remembered that there were four periods during the year for DROP applications and January was one of the four. I went back to January, April, July and October 2013 and looked at those agendas and there were a total of 116 DROP applications amounting to $4.8 million dollars per year.
I need to explain the DROP (Deferred Retirement Option Plan) provision of the pension system. This provision allows an employee to continue working for one, two or three additional years (most if not all choose 3 years), and to receive salary and pension at the same time. The pension payment goes into a special account and at the end of the drop period the employee will receive a lump sum payment which can be rolled over into a retirement account. The pension is frozen at the level that the employee starts his final retirement years (1, 2 or 3). The employee’s and the City’s pension contribution cease as of the start date of the DROP program.
The County does not have a similar program.
December 17, 2013
Mayor Wharton Says Spend! Spend! Spend!
In a very interesting article in the Daily News by Bill Dries, the Mayor is quoted from a TV interview in July on the WKNO-TV program “Behind The Headlines” as saying the following.
“ projects like the Mid-South Fairgrounds renovation and the Bass Pro Shops move into The Pyramid are necessary ingredients in an administration he has vowed will not be about austerity measures. It has failed in Europe … this idea that austerity will cure all ills. It has not worked globally. It will not work locally. … Who is focusing on growth? Everything is cut, cut, cut. Anybody can say that. Forrest Gump can say that.”
This sounds like a statement coming from the White House, not City Hall. He may be repeating talking points. However it sounds like someone who has run out of other people’s money and is fishing for more. I hate to sound old fashioned. As someone who has run a business and has had to meet a payroll, spend, spend, spend is not a good long term strategy unless you can show investors from past successes and a well thought out plan, that there will be future revenue, revenue, revenue to cover the debt, debt, debt. But I repeat myself.
Now as to the pension reform mentioned in the CA, I like the framework of the plan but it does not go far enough. Going to a defined contribution pension plan for future employees and non vested present employees is fair and puts them on the same risk level as the private sector taxpayers. The “for profit” private enterprise market generally has been good to investors for the last 25 years with the exception of 2008. Why should public sector employees be insulated from the risk that private sector taxpayers take?
However we also need to consider that it may be necessary to look at current vested employees and consider freezing their earned pension credits at their present levels and also put them on the same future defined contribution plan for their future years before retirement. However he retired pensioners should be protected short of city bankruptcy like Detroit. These considerations and plans are necessary to avoid another Detroit in the future.
December 12, 2013
A Backdoor Tax Increase
The City Council has passed another backdoor tax increase by unloading street lighting electric cost and maintenance on the MLGW. You already see a sewer fee, a solid waste fee, a storm water fee and a mosquito/rodent control fee on your utility bill.
The utility expects the fee to raise a total of $12.9 million per year, of which roughly half would go toward electricity for the streetlights and half would go toward maintaining them. 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.
Here is what I investigated and found out. If you will look at the 2012 operating budget. The City shows an actual cost of $4.3 million for street lighting in 2010 but a 2012 adopted budget of $12.1 million. Then look at the 2014 operating budget and they show an actual (more…)