Archive for the ‘Financial’ Category
November 24, 2015
Oh No, A Water Rate Increase
As a former MLGW board member, I have a history of praising and criticizing the Division. I follow and read the Division’s annual financial reports. The latest report is for the calendar year 2014 which ended December 31, 2014. The 2015 year report will not be out until well into 2016. However I am sure the Division knows what will be in the report.
Division President Jerry Collins went before the City Council to ask for a 22% water rate increase. He said that the rate increase is necessary to keep the water division from recording its second straight year of negative net income at the end of 2016. A state board is required by state law to step in and set rates after two straight years of negative net income. He said the board has consistently favored higher rates, including a 42 percent increase in Bartlett’s rates.
I have looked at the past financial reports and the Water Division has had a very slim margin (changes to net assets) in 2013 and 2014. Apparently they know that 2015 they are going to show a decrease in net assets (a loss) and without an increase they will lose more in 2016 due to losing a large customer, Cargill Corn Mill. Two years of losses would bring in the state board to dictate an increase in water rates according to state law.
The usual suspects on the City Council refuse to study the facts as they demonize the Division as heartless and cruel. Facts do not make any difference to them as they play to their voting base. Another fact is that the Water Division has been paying $2.5 million dollars per year due to the City Council agreement to finance the FedEx arena. The agreement is effective through the year 2028. During 2014 the Water Division was authorized and directed by City Council, per City resolutions, to make an additional annual $1.9 million transfer payment each year through fiscal year 2017. Transfer payments to the City for 2013 as compared to 2012 increased due to a City resolution authorizing and directing an additional payment of $1.8 million in exchange for the release of any rights the City may have had to receive water from the Water Division free of charge during 2013 under the MLGW Charter.
The MLGW has a history of being fiscally responsible and being run mostly by professional management. Their employees are well trained and do a tough job. However the City Council would be well advised to look in to areas such as MLGW’s OPEB program. They should bring their rules concerning the cost and availability of retirees and their spouces health care to match the same rules as Shelby County Government retirees. Shelby County has these rules in effect since 2007. The MLGW pension and OPEB funds are in good shape due to funds paid for by MLGW’s customers’ utility rates. Compare their pension and OPEB funds to those at the City paid for by property, sales and other taxes.
As a final note I have been informed by President Collins concerning Sewer Rate Fees. “Sewer fees are governed by Public Works. To the best of my knowledge Public Works is not planning a sewer fee increase.” MLGW is just used as a collection agency for 1) Sewer Charge, 2)Solid Waste Fee, 3)Mosquito/Rodent Control Fee and 4) Storm Water Fee.
November 13, 2015
Bass Pro Pyramid Review
Local ABC 24 called and asked me to comment on Bass Pro after 6 months from opening. http://www.localmemphis.com/news/local-news/final-hurdle-remains-for-bass-pro-and-pinch-district
It so happened that I had just spent all day several days previously touring Rhodes College, St Jude and Bass Pro so naturally I am an expert. It was a Wednesday when my wife and I and several out of town visitors did this tour. I must say that Rhodes was outstanding and beautiful. My visitor was a retired orthopedic surgeon and his wife a retired nurse. (He is on the board of Westminster College in Missouri (the site of the famous Winston Churchill speech on the iron curtain). This was before the disastrous University of Missouri incident.)
After visiting Rhodes we went to St. Jude and it was wonderful. Very heartwarming to see the work that they do. Then we went to Bass Pro. As I said it was on a Wednesday at about 2 PM, not exactly prime time.
We toured the ground floor and I was very impressed with the multiple selections of Moon Pies. Also I shopped for camouflaged underwear and pajamas. My wife told me that there was a good selection of women’s clothing (groan). We paid $10 each to ride the elevator to the top and had a good view of the river. We had already had lunch earlier elsewhere but we looked over the menu and it was the typical selection of sandwiches and salads that you could get at dozens of places all over Memphis. The food selection definitely did not match the view.
Now to the financial details. The City of Memphis, through the Memphis Center City Revenue Finance Corporation issued bonds to the tune of $192 million dollars for Warm Lit Shell ($20M) Seismic Retrofit ($25M), Landlord Contribution ($33M), Convention Center Acquisition ($67 M) Pyramid Acquisition ($3.2 M), Lonestar Acquisition ($15 M) and debt reserve and transaction cost of $$28.8 M).
This is to be paid back by increased sales tax revenue over and above a base which will be paid from the State of Tennessee’s sales tax collections for principal and interest. See a distribution report that I obtained from the state of Tennessee on past TDZ zones. Then look at the RKG Associates financial analysis and you will see that they are projectioning an increase in the first full year of $8.1 million more over and above the current level. Keep in mind that each year a new base is set. Also note that ½% of the sales tax goes to the School system.
I sincerely hope that the projections are correct or even underestimated but it will be several years before we know for sure. In the meantime Mayor elect Jim Strickland should publish information on existing City of Memphis financial obligations to the bonds issued by the Memphis Center City Revenue Finance Corporation showing the amount of the outstanding loans and the payment history of each of the obligations. The public has a right to transparency on this financial obligation. The taxpayers are on the hook for these debts even if ad valoren taxes are not. All other taxes collected by the City are obligated.
October 29, 2015
Big Time Bet By The Shelby County School Board
As you have read, the SCS System has filed a massive lawsuit to take the funding out of the hand of the taxpaying public and their elected representatives and put it in the hands of the various school boards across the state of Tennessee. They want to determine how much is required to do the education job and then the taxpayers must come up with the money. The proposition is “MORE MONEY EQUALS BETTER EDUCATION” and they know best how to do it. They just need the resources.
I filed an open records request with the SCS System and asked what the estimated total future cost of the lawsuit would be and asked how much had been billed to date. They responded promptly and said that there was no estimate of total future cost but that they had been billed for $106,775.35 in four monthly billings. This is just the beginning.
Next year there will be an election at the national level for President, for the House of Representatives and for 1/3 of the Senate. If some fiscally responsible people are elected in a majority I hope they will consider the elimination over time of the Department of Education at the Federal level. This department was created by President Jimmy Carter in 1979 and has grown like most of the Washington establishment. Look at what President Obama has requested for this failure.
In his budget proposal, the president has requested $69.8 billion in discretionary spending for the Department of Education, a $1.7 billion increase over last year’s funding level. This is in addition to $13.3 billion in additional mandatory spending for Pell Grants, bringing the total budget request to $83 billion—a 40 percent increase from Fiscal Year 2008.
No one can claim any success from this monumental failure in educational spending. Let us not repeat this kind of failure at the local level.
September 29, 2015
Shelby County School Job Positions and Salaries
Nothing is more important than education. We hear all the talk about programs to combat poverty, workforce development, skill training, etc. etc.
The real solution starts with a caring family that is determined to see that their children get the basics, love, discipline, encouragement and the ability to read. The parents must take an active role in these basics.
The next step is education and this is where the debate rages. Do we need more money as most public school boards claim or do we need a 21st century model.
A recent article in the Wall Street Journal states, in part, the following.
Whatever your measure—the reading and math proficiency of high-school graduates, the skills gap in the nation’s labor market, or the real value of college—there can be little argument that America’s schools, as a whole, are failing to prepare students for the 21st century.
There are countless explanations why, but here’s a significant contributing factor: Until recently, we simply didn’t know how to use technology to make teachers and students happier, better engaged and more successful.
Think about it: In every field of human endeavor, from manufacturing to knowledge work, we’re figuring out how to use technology to make humans more successful—to raise the quality of their work, if not their measured productivity.
But the same can hardly be said of teaching. In education, the overwhelming majority of students are still learning as they always have, in classrooms dominated by a one-to-many lecturing model in which teachers inevitably leave some students behind while boring others. That model has barely changed in a century.
Parents, educators and especially taxpayers need to get involved and have an open discussion about how our education taxes are being spent. As a result of my recent open records request, I have attached a complete list of Shelby County School System employee names, job titles and annual salaries. If you do not have Microsoft Excel You can click here for a PDF copy of the salary list. I have decided to list the names only for those making $70,000 per year or more. The total annual salary for the listed year is $581 million for 16,664 employees. Add to this another 20% for benefits. This is around 75% or more in the budget for salaries and benefits.
I think we need to have a public discussion of the Shelby County Education model and ask the question of whether the School Board should be suing for more tax money or should we update the education model to the 21st century.
September 8, 2015
Massive Lawsuit By The Shelby County Board of Education
In case you have not noticed, the Shelby County Board of Education just filed a lawsuit to compel the taxpayers of the State of Tennessee to fund whatever the state school boards feel is necessary to educate all children to what they feel is adequate education. It does not matter if the taxpayers can afford their idea of what constitutes an adequate education.
I must say on the front end that I want all children to get a good education. However I am a proponent of parental choice, good charter schools and parental vouchers. Let the money follow the child. They say that lack of money is the problem. I say that there is no proof that more money solves the problem. I say that the basic problem is the dissolution of the family structure and that this family structure problem started in the 1960s war on poverty and has gone downhill since then. This is a debate that I welcome.
However I just want to alert you to what is going on and I have several questions that I feel should be answered by the Shelby County School Board and I intend to ask for this information in an open records request. I encourage you also to ask for this data.
- What is the projected future cost of this lawsuit?
- What has been spent so far?
- Will all future legal bills be promptly put on line for the public to see?
- Will all payments in connection with this lawsuit be promptly put on line?
- Will all the cost of SCS legal and administrative work in connection with this lawsuit be recorded and put on line?
What they are asking is a blank check for education with the school boards able to write in the amount.
DO YOU AGREE? LET ME HEAR YOUR OPINION AND LET THEM KNOW YOU OPINION.
Here is the lawsuit and I have listed some of the highlights below.
August 25, 2015
Transparency And Government
I am always amazed at the arrogance of bureaucrats. Nationally we have a festering case of arrogance and lack of transparency in the Hillary Clinton email scandal. Another example is the pending Iranian executive agreement which is terrible in what we know and much worse in the hidden side agreements that they are withholding.
On a national scale the above examples are life threatening and scary. I do what I can and let my senators and representatives know what I think. Locally I think we have more direct influence and I want to call on you to help me and others by letting the state and local officials know how you feel. Here is a prime example of government arrogance.
Currently, Tennessee law allows citizens free access to inspect public records, but allows charges if the citizen wants copies. There are bills to allow additional public records fees that are being sponsored by state Sen. Jim Tracy, R-Shelbyville, and state Rep. Steve McDaniel, R-Parkers Crossroads, at the request of the Tennessee Association of School Boards. TCOG (Tennessee coalition for open government), TPA (Tennessee press association) and other citizen groups opposed the proposed legislation because of concerns that new fees would be used to block access to public records that provide government accountability, and be abused in the same way copy fees have been abused. (more…)
August 17, 2015
Pilot Promises! Are They True?
There was an editorial in the CA August 16th about Pilots and attached tax breaks. This is a subject that is up for discussion and debate. On one side is EDGE (economic development growth engine) led by Reid Dulberger. On the other side is many of the local unions and other groups who wonder where is the promised benefits of EDGE’s website.
If you look at EDGE’s website you will see $711 million dollars in projected new tax revenue. WOW!! Boy do we need that. No future pension and retiree health care problems. We are on easy street.
But looking back on City and County revenues for many years I don’t see any such massive flow. Revenue just seems flat but with some inflation increases.
What we have here is a lack of facts. Here are some problems and suggestions that I would suggest could shine some light on the PILOT discussion.
If you look at Shelby County Trustee website (currently under David Lenoir) you will see a list of annual County Pilot reports. In those reports is a section entitled Contracts Aged by Expiration Date. This section shows how much the property should pay in Shelby County property taxes and how much they are in fact paying under the Pilot reduction.
In order for the public to have some basis for confidence in the pilot program, some entity should look back at the expiration date of each pilot and determine if after the pilot expired, did the property pay the full amount in the future or did they get an extension, a reduction, or did they leave town or whatever. This does not sound too hard but it is beyond my resources.
Another problem is that the City Treasurer (the City equivalent of the County Trustee) does not publish a similar report. We are talking millions and millions of dollars in abated taxes. Once the pilot expires, are we getting the full amount or not? I say Prove it.
Joe Saino 901-7540699
Let’s Take a Look At OPEB, Retiree Health Care Costs!
July 28, 2015
Yesterday there was an article in the Wall Street Journal entitled “Relief for Cities’ Budget-Busting Health-Care Costs”. It talked about new accounting rules for retiree health care plans. Nationwide the total unfunded liability is close to $1 trillion dollars.
For the first time the Government Accounting Standards Board (GASB) will require local government to report their obligations to retirees as liabilities on their balance sheet. (Side Note: The Federal Government wants cities to report this but the federal government continues to ignore their multiple front unfunded liability.)
So I decided to take a look at Memphis, Shelby County, Shelby County Schools and Nashville.
Unfunded Liability for OPEB, 7/1/2014
Memphis $716 million
Shelby County $243 million
Shelby County Schools $1.43 billion
Nashville Metro $2.03 billion (including metro schools)
The striking thing about this is that the only adult in the above group is the Shelby County government. There was a warning back in 2007 from the GASB about unfunded OPEB liability and Shelby County took action and forced retirees over 65 who were eligible (or their spouse was eligible) to use Medicare as the primary payer with a County supplementary plan as the backup. They required those retirees under the age of 65 without a Medicare eligible spouse to pay a higher health care premium based on years of service. The City and apparently Nashville did nothing. This led to the above huge numbers.
The City of Memphis finally took action which has led to the current turmoil among the retirees and the unions. The school system and Nashville are finally facing their fate and will be required to make hard choices. I call on the City of Memphis to not go back on their late hard choices on retiree health care costs and go forward with their adopted but late difficult decision.
July 20, 2015
FEW (family/education/work) IS THE SOLUTION
There have been lots of articles last week, both locally and nationally, about income inequality, middle class wages, poverty percentages and solutions. It must be the upcoming elections, locally this year and nationally next year, that has politicians spouting out their solutions.
One local article cited a study that pegged Memphis as a national leader in both income gap and economic distress. The four local leading candidates for mayor were asked the question “How do we fix that?”
Here is a recap of what the four said.
Collins, a City Council member, said the city needs better-paying jobs before it can reverse poverty trends and close the income gap, and took incumbent A C Wharton to task for not doing more to get those jobs. Collins said he also plans to “force” the Greater Memphis Chamber to recruit businesses in technology, engineering, finance and other industries with higher average salaries. For instance, he said, the city should be targeting companies fleeing California because of the drought there.
Strickland, also a council member, said wage gap and poverty issues “run hand-in-hand” with population loss. Keeping people and jobs in Memphis is the best way, he said, and the city needs a mayor who “has the strength to fix things.”
Getting into the specifics of his plan, Strickland said he would focus on the “basics of government,” which he said are “not being done.” That includes “drastically” reducing crime and cleaning up the city, he said. “We must have a city government that is run effectively to create a safe and clean community where businesses and people want to be,” he said.
A C WHARTON
Wharton, the incumbent, said his administration has worked on reducing unemployment and income inequality in a number of ways as part of his Blueprint for Prosperity plan and with the recently announced Jobs Plus grant.
“If we are successful in getting Choice Neighborhood Implementation grants, this will provide significant support for my strategic priority of prosperity and economic opportunity for all citizens,” he said.
Wharton said the city already has some of the best workforce-readiness programs in the country at the Workforce Investment Network and through the Greater Memphis Alliance for a Competitive Workforce, which equip people with the skills needed for current and future jobs so they can “become more marketable and command higher salaries as businesses compete for top talent.”
“The Choice Neighborhood grant funds would help us leverage and maximize all of these efforts to address poverty, unemployment, income inequality and depressed neighborhoods,” he said.
Williams, the president of the Memphis Police Association, said the key was to invest in quality of life and public services instead of giving property-tax breaks to businesses.
“The profits are not being shared,” he said. “That’s why you have the (Greater Memphis Chamber) raping the city coffers. And that has to stop. Until it stops, we’re going to continue to generate poverty in this city.”
Drawing a distinction between himself and Wharton, Williams said he is opposed to “putting a clamp on excessive spending” — which, under Wharton, has translated into health care and pension changes that resulted in city retirees protesting at City Hall.
Instead, Williams said, the government should increase spending on services to make Memphis more attractive to both employers and employees.
So here is what I get out of these answers.
Collins-Get high tech companies from California but we do not have a skilled high tech workforce.
Strickland- Reduce crime, clean the city and reduce taxes.
Wharton– Get federal grant money for short term training programs and neighborhood programs.
Williams– Stop Pilots, stop cutting expenses and employee benefits which translates into higher taxes and more people leaving Memphis.
The truth is that there is no immediate solution to the problems in Memphis. The only answer is FEW, (FAMILY, EDUCATION, WORK) and it is a long term solution. Since the end of the Second World War we have been digging this hole (family breakdown, poor education and welfare dependency). Look at Detroit, Baltimore and unfortunately Memphis. Raising the minimum wage, income redistribution, unsustainable pensions and health care benefits will not solve the problem. Politicians will tell you otherwise but there is no one year or even four year solution. Restore your family, educate your children and take any job to start up the hard economic ladder. Any other solution is a lie. What is your opinion of the candidates and their solutions?
July 6, 2015
The Dog Ate My Emails and My Lunch
Open records and access is a national problem that started in Washington DC and is continuing throughout the nation. Now the dog is not only eating my emails but wants my lunch and for me to pay for it as shown on the attached youtube. http://www.youtube.com/embed/ub1Dc3NHZ3s?autoplay=1&cc_load_policy=1
I recently received an email from Deborah Fisher. She is the Executive Director of TCOG, Tennessee Coalition for Open Government
Check out my open government blog at www.tcog.info
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Or twitter @TNOpenGovt
I emailed her about our open records room at the Shelby County School System and here is her reply.
I read through what you sent me, and had seen the article earlier in the Commercial Appeal. I applaud you on working so persistently with the school board to create a process that would make it easier for citizens to view public records!
Clearly, obstacles do remain. How can I help you in your goals? And I would love to pull you more into the fold of what TCOG is doing.
The Tennessee School Boards Association (of which Shelby County school is a member) had as one of their top legislative priorities this year to pass a bill that would allow EVERY GOVERNMENT ACROSS TENNESSEE to charge new fees on citizens who want to inspect records. Right now, the law says no charges can be filed to inspect records – charges can only be assessed when someone wants copies of records. Not everyone charges for copies, but many do. We are seeing all sorts of labor charges when someone requests copies (upwards of $1,000), and are concerned that if the free inspection language is removed from the law, things will get much worse and more local governments will feel at liberty to charge per-hour labor fees to compile documents.
I do a lot of training, but one of my duties is tracking such legislative action. The fees bill was pulled off notice by its sponsors, after the Office of Open Records Counsel said it wanted to study the issue and hold hearings across the state.
I believe the West Tennessee hearing will be in September in Jackson. (One of the bill’s sponsors is state Rep. Steve McDaniel from Parkers Crossroads near Jackson.)
The Open Records Counsel has called a meeting of the Advisory Committee on Open Government at 10:30 a.m. Monday in Nashville at Legislative Plaza that will be live-streamed on the web. If you have time to watch it, it may help you understand better what is happening. ACOG is a group of representatives from government associations (like the School Board Association) and citizen and media groups. TCOG has a seat on ACOG. Here’s a link: http://www.comptroller.tn.gov/openrecords/acog.asp
At this meeting the Open Records Counsel will discuss her plans for a survey/questionnaire, and what she thinks should be the topic of public hearings. At this point, we are very concerned about the direction she is taking the public hearings and survey. I’ll attach for you the draft topics for the hearing, and perhaps you can see what I mean.
The Tennessee School Boards Association representative on ACOG is Don Long, and he has been very active in pushing the fees legislation. He is someone who has gotten crosswise with some citizens in Sumner County who have been seeking more information about their school district, mostly on spending matters.
While the Tennessee School Boards Association is the lead in pushing this legislation, I’m not certain that all of the elected officials who serve on school boards across the state agree with what their association is trying to do. I’m not sure Shelby County school board members support this, for example.
If a new bill is introduced in January, we need help from citizens who are willing to talk with their state lawmakers. I’m not quite sure of where members of the Memphis area delegation stand on this, or if you guys have worked in that area.
Would love to talk with you more, especially about what’s happening in Shelby County.
This is clearly the time to let our school board members know that we are for open records and that we appreciate the initial steps that Superintendent Hopson and board member Chris Caldwell have made. Our group of citizens is determined to help in building a model open records policy that hopefully can be a template statewide and to resist any efforts by the Tennessee School Boards Association to restrict access to records with new policies and restrictive fees. We, the taxpayers, pay for all of this, and we should have access to all legal information with minimal or no cost.