Archive for the ‘History’ Category
April 28, 2015
Memphis Urban Development In Action
Memphis Bass Pro is set to open tomorrow and I for one hope that it is successful and pays off the millions that the City of Memphis has put into it. But I would like to point out a past example of big government and their programs for downtown. Take a look at the Peabody Place Project.
Peabody Place was a 300,000-square-foot shopping and entertainment mall intended to aid Downtown’s revival. The mall opened with a Muvico cinema complex, retail and restaurants in June 2001 but started to empty as the recession deepened in 2008. When the theater closed in July 2008, the Belzes announced plans to renovate part of the mall into a suites hotel, but lack of financing kept the project from going forward. Now look at the funding sources and amounts that financed the original project. UDAG, CDBG, Section 108 and City CIP to the tune of $41.8 million. What are UDAG, CDBG, Section108 and City CIP?
UDAG (Urban Development Action Grant)
The Secretary is authorized to make urban development action grants to cities and urban counties which are experiencing severe economic distress to help stimulate economic development activity needed to aid in economic recovery.
CDBG (Community Development Block Grants)
The Community Development Block Grant (CDBG) program was enacted in 1974 by president Gerald Ford through the Housing and Community Development Act of 1974 and took effect in January 1975. It had the goal of extinguishing poverty and urban blight.
Section 108 is a loan guarantee program administered by the Department of Housing and Urban Development (HUD), which, since 1978, has committed more than $6 billion to almost 1,500 capital projects aimed at ameliorating housing conditions and creating economic opportunities, particularly for the benefit of low- and moderate-income persons.
City CIP (City of Memphis Capital Improvement Program)
This is City of Memphis capital money.
Now I ask the question, does any of this investment of our federal tax money or our City of Memphis tax money fit these definitions or objectives?
Then more recently there was this information in a Commercial Appeal article from 2014. The Belz family plans to refinance Peabody Place in a move that Downtown officials say is unrelated to talk of converting the vacant complex into a convention-related facility.
The Center City Revenue Finance Corp. on Tuesday approved a refinancing request from Hotel Peabody L.P., the Belz unit that owns The Peabody hotel and adjoining retail and entertainment site.
Refinancing required the board’s approval as a condition of a 25-year property tax abatement that was granted to the project in 1997.
This and other projects and questionable financing and use of federal tax money need a public discussion and open record information on how this money is to be repaid and who benefits.
April 16, 2015
Happy Tax Day!!!
Yesterday was April 15th and your taxes hopefully were paid or your check was in the mail. Most working people and retirees are tax payers and pay more in taxes than they receive in government benefits.
One huge item most of us do not understand is nonprofits. One definition of non profits is “A business entity that is granted tax-exempt status by the Internal Revenue Service. Donations to a nonprofit organization are often tax deductible to the individuals and businesses making the contributions.” Donations to non profits also come from Federal, State and local governments from taxpayer funds.
Information about nonprofits is available from Guidestar. Guidestar is a 501(c)(3) public charity that collects, organizes, and presents the information you want in an easy-to-understand format while remaining neutral. Guidestar provides nonprofit information to a broad audience at no cost to the users.
Why Should You Care about Nonprofit Information?
Because the nonprofit sector is incredibly powerful. According to the Center for Civil Society Studies at Johns Hopkins University, more than 70 million people work and volunteer in the nonprofit sector. Nonprofit employees make up the third-largest workforce among U.S. industries, behind only retail and manufacturing, and nonprofits create total revenue of more than 1.9 trillion annually, exceeding the total GDP of Canada, Australia, Russia, or India
Locally, according to Guidestar, we have 3705 non profit organizations just in the City of Memphis. I am in the process of trying to gather information of Memphis nonprofits. It is not easy. I have attached a spreadsheet on just 413 local nonprofits and I am up to $3.5 billion dollars of income. At the top of the list are well known and respected medical organizations like St. Jude and Baptist Hospital and charitable organizations like Autozone.
But then you get organizations like Global Ministries Foundation and take a look at their Form 990. You probably read the recent CA article about Global and the Rev Richard Hamlet who is paid a salary $485,000. Read the article and make your own decision as to the benefits of such a nonprofit. I am reaching out to the public to send me information on local non profits, where their money comes from, where their money goes and the cost of administration. Many people have called for better coordination of local non profits so that those that work on housing for the homeless (for example) could work together and reduce the cost of administration and get more of the money to those in need. The real question about any non profit is this. What is the percentage of benefits out versus money in? Hopefully the cost does not get above 15% with the benefits at 85%. Is that reasonable?
April 14, 2015
Subsidized Housing, MHA, HCD, HUD, HEHF, Say What?
Recently I attended a MHA board meeting and at the end of the session I asked the board in the future to post all recent financial statements. Until recently they had not posted 2013 and 2014 statements. I also asked that in the future that they post the board agenda and all supporting documents at least two days in advance of the monthly board meetings. We will see in the future whether they do this.
They did in fact post the financial statements for 2013 and 2014 so that now we have posted 2009 through 2014 posted online.
At this point I do not pretend to understand this organization which is headed by Robert Lipscomb as well as the City of Memphis department of Housing and Community Development which is also headed by the same Robert Lipscomb. Then you add in HUD (Housing and Urban Development), HEHF (Health, Education and Housing Facilities Board) and then all the non profits like Global Ministries Foundation which was recently written about in the Commercial Appeal and you have a real witches brew brought on by big government spending in an attempt to solve social problems and garner votes. The real question is what is the most efficient way to help those truly in need? Is big government the answer or should rent money be given to those truly in need and let them make their own housing decisions? What do you think?
In order to get a better understanding of the financial structure and purpose of the MHA and HCD a friend asked for a meeting with MHA accounting (Ms. Vickie Aldridge) and here is the answer he got.
“I am not available to meet however if you submit your questions in writing, I will respond at my earliest convenience.” My friend will no doubt respond but here are my thoughts on these posted financial statements.”
I have attached one page out of each of the last six financial reports (2009 thru 2014). These pages list the notes, loans and mortgages receivable for various local housing projects. If you read on through the following pages of the reports you will see the following statement for each of the projects.
No payments were received on this note during 2014, 2013, 2012, 2011, 2010 and 2009.
My request to the MHA would be that I want to see these financial documents on the loans and mortgages to understand the terms and conditions and who is benefiting from these finances. You will note that the long term notes receivable has gone from $92 million in 2009 to $155 million in 2014. The public should be made aware of these finances, the cost to the taxpayers and the benefits to the tenants of this housing.
March 4, 2015
In a recent CA article, it was pointed out that the cash strapped City of Memphis will have to come up with another $13.5 million to cover the underestimated cost of City of Memphis retirees OPEB cost. This is because of the City’s liberal policy differences versus the County concerning what health care policies are available to retirees.
I have attached a resolution dated June 18, 2007 entitled “RESOLUTION TO PROVIDE FOR OPEB BENEFITS AND APPROVE CHANGES TO HEALTH INSURANCE BENEFITS PROVIDED TO EMPLOYEES AND RETIREES”
It is signed by none other than A C Wharton, then County Mayor.
The main difference is that County retirees over age 65 that are eligible for Medicare (either the retiree or spouse) will only be eligible for a Medicare supplemental plan, not the regular county plan. Also the retiree’s share of the premium will be based on years of service. This saved the county millions of dollars since 2007.
Meanwhile the City of Memphis did none of this even after County Mayor Wharton became City Mayor Wharton. It took a city pension and OPEB financial crisis to get the City to change and then they got the numbers wrong to the tune of $13.5 million. Then add to that the millions they could have saved between 2007 and 2015 had they followed the County example, but they did nothing.
Last Tuesday I braved the ice (black and otherwise) and went to the City Council committee meetings at City Hall. There were two particular subjects in which I had an interest and they were the Pension Funding Policy chaired by Jim Strickland and the Executive session on Debt Restructuring chaired by Myron Lowery.
These two subjects are related because due to the 2010 scoop and toss bond refinancing and the State of Tennessee demanding that the City of Memphis increases its pension ARC (annual required contribution). It turns out that the 2010 refinancing created a bubble starting in 2016 making it difficult to pay both the increased ARC and the bond payments at the same time. The answer, scoop and toss again. The City (Brian Collins) claims that this is reasonable due to low interest rates. Jim Strickland, Harold Collins, Wanda Halbert and Shea Flinn raised questions as did the Commercial Appeal. Here is the presentation given at the meeting.
I decided to investigate some past bond financing so I asked the City of Memphis for some bond information on recent bonds such as the stadium project and the Pyramid and Pinch District redevelopment. All I got from them was a computerized reply with answers to follow SOME DAY. So I went online and got the following Moodys financial analysis report.
Here are some of the things that the report says about Memphis.
- The current issue is ultimately secured by all non-tax revenue that is legally available other than ad valorem revenues in the city’s general fund.
- The Series 2011B and 2011 C subordinate are secured by a second lien on TDZ revenues with a pledge from the city to replenish the debt service reserve in the event of a draw on non-ad valorem tax revenues.
The negative outlook on the Series 2013A&B and 2011B&C reflects Moody’s expectation that the city’s financial position will remain challenged as fixed costs, including debt service, pension and other post-employment benefits represents 42% of operating expenditures in fiscal 2012.
In spite of all this the City continues to spend on questionable projects like the Raleigh Springs Mall renovation and to talk about the fairgrounds project as if these will all be paid for by tax incremental financing and fairy dust.
February 18, 2015
Cost of pensions/ City Versus County
I recently asked for and promptly got a copy of the Shelby County Pension Actuarial Report dated June 30, 2014. I also asked for the City of Memphis report and have yet to get it. However I have the June 30, 2013 report from the City of Memphis.
I first read the Shelby County report and it was like reading a financial report from, your favorite profitable well run private sector firm. Not exciting but very comforting. Not racy but secure.
Then to add spice to my day I took up the City of Memphis pension report. Talk about “A Tale of Two Cities”. Here are some comparisons.
Active Employees, City of Memphis- 6280; Shelby County 5302
Retirees, City of Memphis- 4782; Shelby County 3469
Unfunded Liability, City of Memphis- $709 million; Shelby County $243 million
Retirees on disability, City of Memphis- 635; Shelby County 80. Most of the County disability retirees are regular, not line of duty. Most of the disability retirees from the City are line of duty. They get 60% of their highest average salary tax free for life. The problem is the composition the approving pension board at the City made up of their fellow employees. Shelby County gives approval to a disability insurance company. This is costing the City $14 million per year.
Total annual pension payments, City of Memphis $155 million; Shelby County $66 million
Average pension per retiree, City of Memphis- $32,518; Shelby County $19,273
Do I need to say more?
February 11, 2015
Insure Tennessee! Let Us Have A Discussion
Recently I heard a talk given by Dr. Scott Morris, founder of the Church Health Center. He talked about the Sears Tower planned renovation and it was fascinating. If it comes off successfully, it could lead to great benefits for midtown and for Shelby County.
Before he got into the Sears Tower presentation, he talked about the recently defeated proposal for Insure Tennessee. This is Governor Bill Haslan’s proposal to take federal money from the government to expand Medicaid coverage under the Affordable Care Act to people who do not qualify either for existing Medicaid programs or to buy coverage on an exchange.
Haslam unveiled Insure Tennessee in December after nearly two years of negotiating with the federal government because Insure Tennessee was not a straight expansion of Medicaid. It required a waiver approval by the U.S. Department of Health and Human Services because Haslam opted to craft a state-specific program that modeled many aspects of commercial health insurance using funds from a tax that Tennesseans are already paying under the ACA.
Dr. Morris stated that this was a no brainer as the money was sitting there and there were people who needed the medical services and after all it was our Tennessee tax money and additionally tax money from other states.
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