Archive for the ‘History’ Category
January 8, 2015
There was a recent editorial in the CA about the upcoming 2015 city elections and term limits. This is a subject that is close to my heart. Let me be clear. I am for reasonable term limits for all elected public offices from the President on down.
At the Federal level, thank goodness that the office of President is limited to two four year terms. Now it is time for the senate and the house to institute at least a twelve year limit (two six years terms and six two year terms). The argument that our politicians need long experience in government to make good decisions is greatly overrated by actual performance.
Now as to the new term limits for the City of Memphis. I would like you to remember how this came about.
Without going in to a long history lesson, it came about by the actions of Mr. John Lunt, a Germantown resident but a great Memphis businessman. He was incensed by the foolish January 2001 pension resolution allowing elected and appointed people to receive a pension after twelve years regardless of age. This has cost the City of Memphis millions. Mr. Lunt instituted a charter commission election with the help of thousands of voters which the politicians fought tooth and nail. The citizens got behind the proposal and it passed.
The one good result of that effort was term limits for the Mayor and City Council. Myron Lowery was the sometimes chairman of that Commission and thank you Myron for your support of the citizens. Shelby County already had term limits in their charter which certain members of the County Commission fought in court but lost.
Public spirited citizens should come forward and offer their services in elected positions but after four or eight years, they should go back to the private sector and earn their living.
As a retiree I ran for City Council in 2007 and I thank the over 16,000 voters who voted for me. My wife and children thank the voters who gave Shea Flinn and Kemp Conrad more votes. They both have done good work for the City of Memphis. I encourage young new people to come forward and put their ideas for good government before the voters. I encourage retirees to get involved in the issues and lend their experience in letters, calls, blogs and unpaid public service positions. Good government needs input from the citizens and tax payers. Do your part and get involved.
January 6, 2015
The Cargill Pilot
Recently a reader of my blog asked me the following question.
“When a company pulls out before the end of their PILOT agreement, do they pay a penalty for not having delivered as promised? I am thinking of Cargill.”
I responded “Good Question. I will check. I emailed EDGE (Economic Development Growth Engine) and asked for a copy of the Cargill Pilot agreement. They promptly responded as follows.
email@example.com “The Cargill Lease, along with most documents, are online. See http://growth-engine.org/archive/?g=/Data%20By%20Company/Cargill
I went there online and found a number of documents about Cargill but the one that was most interesting was the following one entitled “Application Of Cargill Incorporated For Payment In Lieu Of Taxes” dated in 2010. Look at page 48 which is a letter signed by Mayor Wharton with promises of tax reductions close to $12 million and a $3 million dollar funding to assist in rail enhancements.
Then look at page 42 where Cargill would possibly provide a $500,000 funding for a school bus project in order to delay installation of equipment at Cargill to reduce their air pollution. I am not sure if they ever provided this $500,000. Does anyone out there know? Here is an article about the proposal.
Cargill is a big company and they do what is best for Cargill. They are a big employer and any city would be proud to have them as a local employer. It is best that all citizens know what is going on in the tax deals and EDGE is to be complimented for posting this information on line. However they still have not provided the critical information about properties that finish their Pilot contracts and the important information about whether they are paying the full tax amount that they were abated during the Pilot or whether they somehow left town, got an extension of the Pilot or are somehow paying less than their full share. Post that information on line PLEASE!
In the midst of a terrible civil war, President Lincoln proclaimed a national holiday, Thanksgiving, urging gratitude amid civil war woes. Here is part of that proclamation.
The year that is drawing towards its close, has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added, which are of so extraordinary a nature, that they cannot fail to penetrate and soften even the heart which is habitually insensible to the ever watchful providence of Almighty God.
I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next, as a day of Thanksgiving and Praise to our beneficent Father who dwelleth in the Heavens. And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings, they do also, with humble penitence for our national perverseness and disobedience, commend to His tender care all those who have become widows, orphans, mourners or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the interposition of the Almighty Hand to heal the wounds of the nation and to restore it as soon as may be consistent with the Divine purposes to the full enjoyment of peace, harmony, tranquillity and Union.
In testimony whereof, I have hereunto set my hand and caused the Seal of the United States to be affixed.
Done at the City of Washington, this Third day of October, in the year of our Lord one thousand eight hundred and sixty-three, and of the Independence of the Unites States the Eighty-eighth.
By the President: Abraham Lincoln
November 13, 2014
My brother and I ran a manufacturing business for some 40 years here in Memphis (Saino Manufacturing Company) and then we sold the business and retired and continued in my field of fire protection as a consultant. Then in 2004 I turned to local government interests and the issue of Transparency In Government.
I found that this was not only a national problem but also a state and local problem. Many politicians feel that they do not want the public to know the details of their motives and actions and therefore they make it purposely difficult to get the information. Look below at part of the Tennessee Open Records Law.
(2)(A) All state, county and municipal records shall, at all times during business hours, which for public hospitals shall be during the business hours of their administrative offices, be open for personal inspection by any citizen of this state, and those in charge of the records shall not refuse such right of inspection to any citizen, unless otherwise provided by state law.
Locally I have been refused access to the City of Memphis offices and old Memphis City School offices during business hours with the excuse that I do not have an appointment with a particular person. When I then tried to get an appointment with the person that I wanted to see, my phone calls and emails were not answered. This, according to the Tennessee State open records official, is a violation of state law.
Just to illustrate how important transparency in government is, look at the recent revelation of the creation of the Affordable Care Act. MIT Professor Jonathan Gruber, the Obamacare architect, said in 2013 that a lack of transparency and the stupidity of the American voter helped get the law through Congress. See the “too stupid” video clip. http://dailycaller.com/2014/11/11/yet-another-video-emerges-of-obamacare-architect-calling-americans-stupid-video/
It is time for all local governmental and educational entities to open all their legally open records in an easily accessible manner to the public that pays all the bills for these services. As a high official at the Shelby County Government Offices (the best of all local governmental agencies) told me on a recent phone call “We work for you, Mr. Saino, and the public”. What a great attitude.
November 27, 2014
The MLGW Island
There was a very good and interesting article in a recent issue of the Memphis Flyer. It was written by Les Smith, a reporter for WHBQ Fox-13 News. The point of the article was his belief that the MLGW is and always has been tone deaf to its customers. The most recent example of the deafness, according to Les, was MLGW announcing the need for a 2 percent hike in the residential water rate just after receiving a tongue lashing from City Council member Wanda Halbert.
As a former member of the MLGW Board of Directors and a long time observer of their services, I have the following observations.
- Over the past years MLGW has been a well run organization delivering electricity, natural gas and clean water in a professional manner. However there have been times when politics caused problems with the management, specifically when Mayor Herenton put Joseph Lee in charge.
- The employees generally are well trained and they respond to weather related outages in a prompt and professional manner.
- With the exception of Lee, the top job at the MLGW has been filled by professionals with the highest integrity.
- Utility rates are competitive compared to other cities of similar size.
I have studied the MLGW financial statements over the years and they are clear and complete. I have in the past contested the surplus in net worth as inconsistent with their constitutional nonprofit status. However they contend that they need a certain percentage of unrestricted assets to cover unpaid bills and expenses. You can argue about the size of the unrestricted cash but I do not think it is unreasonable.
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 13, 2014
The Upcoming Election on Tuesday, November 4, 2014
You are probably aware that a very important election occurs on the first Tuesday in November this year. The composition of the US Senate and House is a critical issue as we struggle to restore the constitutional balance between the executive and legislative branches. Early Voting begins October 15, 2014 at ALL 21 Satellite Sites and continues through October 30, 2014. Please get out and vote.
I will be publishing my thoughts on the local and state issues by next Monday, October 20th. There are four proposed Tennessee constitutional amendments involving abortion (#1), electing or appointing Tennessee Supreme Court Judges and Appellate Court Judges (#2), income taxes in Tennessee (#3) and lotteries (#4).
But today I am curious about another item on the ballot and that is Memphis Ordinance No. 5512. This proposed ordinance would increase the number of civil service commission members from 7 to 14. Brian Collins (City Director of Finance) certifies that the net cost to the City of Memphis will be $0.
Here is what channel 3 said about this proposed change in 2013.
(Memphis) With a back log of more than 70 cases, Memphis City administration and employee unions said they have come up with changes to the Civil Service Commission that will make the system more efficient. (more…)
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.
September 18, 2014
There Are Promises And Then There Are Promises
Promises are only as good as the character of the promiser and laws to back up the promise. The City of Memphis made promises in the past about pension benefits and also about retiree health care benefits. The pension benefits were backed up by law and generally could only be changed by bankruptcy (look at Detroit). However retiree health care benefits are not protected by law and are subject to change by the governing body.
Recently certain publications have pointed to Nashville as the model that Memphis should emulate. Therefore I decided to look at Nashville (Metro Davidson) and see what their numbers look like.
The first thing that struck me was that the Nashville Metropolitan Council consisted of 41 members. Our 13 is bad enough. Imagine a meeting where all 41 want to get their opinion on the record.
Then I looked at the pension and OPEB numbers. Their pension liability was funded to 84.6% as compared to 72.6% for Memphis. However their OPEB unfunded liability is $1.88 billion compared to $1.29 billion for Memphis. Therefore the state of Tennessee looked at Memphis and said that you are low on gas for the pension fund and also the OPEB fund and therefore you have to do something. However Nashville gets a pass because they can always cancel the OPEB promise in the future if they get in a pension contribution bind. Would you want 41 metro council members rather than the 26 we now have (13 City and 13 County) representing the City and County especially when the County has been doing a good job compared to the City.
Nashville is certainly vibrant and has grown whereas Memphis has been basically stagnant. However, you should be careful about claiming that the difference between Memphis and Nashville is the result of a metro government versus two separate governments in Shelby County.
September 8, 2014
Confusion At City Hall
It was interesting to watch the confusion at the committee discussions Tuesday (a week ago) about the budget. The following was in the budget document.
The proposed FY 2015 Operating Budget includes an increase of approximately $15 million to help fund our pension system. Combined with a FY14 contribution of $20 million, pension payments will be approximately $35 million. Since 2008, financial constraints have prevented us from paying the full Actuarially Required Contribution (ARC) needed to maintain solvency long-term. The current ARC is approximately $95 million.
Under newly enacted Tennessee law, the City will be required to ramp up our annual contributions until we reach 100%, no later than 2020.
The FY 2015 Operating Budget includes fundamental changes to medical benefits provided to current and former employees. First, the FY 2015 Budget assumes that the city will no longer pay 70% of the health care premium of retired, Medicare-eligible employees, their spouses and dependents. These retirees will have options: remain on the City’s plan; join plans offered by either their current employers or their spouses’ employers; purchase Medicare supplement plans; or join the new Affordable Care Act’s health insurance exchanges or private exchanges. This change will save approximately $27 million in FY 2015. Also, it will be the first step toward eliminating the $1.3 billion unfunded OPEB (Other Post Employee Benefits Programs) liability. Second, the Budget assumes that we implement long overdue changes to the base health plan that will result in an additional $4 million savings in FY 2015.
The City Council and the Administration are looking for ways to save money to increase the pension fund contribution. The easy target was the health insurance costs for active employees and retirees. However the real problem is the pension structure itself. We have too many retirees from the City when compared to the County. The ratio of retirees to active employees at the City of Memphis is 79 per 100 versus 57 per 100 at the County. This of course means more retirees on the City health care plan. Then consider that the average City pension is $31,000 versus $19,000 at the County. Also the average health care cost for retirees at the City is $10,900 versus $7,100 at the county. The whole pension fund at the City needs an independent study to determine why more people proportionally are retired at the City than the County. This and the past refusal to take needed reforms is the root cause of the current problem.