Archive for the ‘MLGW’ Category

The MLGW Island

Monday, October 27th, 2014

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.

  1. 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.
  2. The employees generally are well trained and they respond to weather related outages in a prompt and professional manner.
  3. With the exception of Lee, the top job at the MLGW has been filled by professionals with the highest integrity.
  4. 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.

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Finally A Defined Contribution Pension Plan

Tuesday, October 7th, 2014

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.

Ordinance #5554-Adopt a defined contribution pension plan.

Ordinance #5553- Transferred participants to the defined contribution plan.

Ordinance #5552- Five or more years of service and age 65.

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.

Paying For Pension Reform In 2 Years

Monday, June 2nd, 2014

June 2 2014

 

Paying For Pension Reform In 2 Years

 

A good friend sent me a copy of Councilman Jim Strickland’s thoughts in paying this unfunded liability off in 2 years rather than 5. Jim is a good guy and a responsible city council member. He is correct in that paying it off in two years rather than five will save in the long run. Last year we added $68 million to the unfunded liability due to the small payment to the pension fund rather than the recommended ARC payment.

 

What is missing from him is the specific details of how we are going to pay for this pension load without raising property taxes. He needs to detail the immediate dollar savings for 2015 such as health care reform for active employees and retirees, sick pay, vacation reform, college education benefit reduction or elimination, line of duty reform and salary reductions to bring salaries in line with private sector. Also while going to the proposed defined contribution will not give immediate relief, it will change the future projections of the pension auditors reducing the unfunded liability projections.

 

Also concerning the health care proposed changes, I believe that those retirees under age 65 who are not eligible for medicare (or their spouse is not on medicare) can pay for back medicare eligibility to make them eligible.

 

I would agree with paying in two years rather than 5 but only if it is accompanied with passed and agreed on reforms like the above detailing where the money is coming from. We do not need more property tax increases. Look at the county and their proposed (more…)

An Open Records Update

Monday, May 19th, 2014

May 19, 2014

An Open Records Update

During the last 10 years I have been an advocate of open records. I have had my ups and downs with the City of Memphis, Shelby County, the old Memphis School System, he MLGW and any number of other affiliated organizations. Here is my open record scorecard.

  • Shelby County and MLGW                                                                      A
  • The Old Shelby County School System                                                            B+
  • City of Memphis                                                                                         C
  • Old Memphis School System and the new SC School System       F

I have never had to file a lawsuit against Shelby County, the MLGW or the Old Shelby County School System. I have filed 5 lawsuits successfully against Memphis and the Old Memphis School System. The City of Memphis has become less responsive and difficult about providing access to information. The new Shelby County School System (SCS) seems to be little different from the old Memphis School System.

I am asking Memphis and SCS for information and will take whatever action is necessary to enforce my Tennessee citizens’ legal rights and access to information.

Now I see the Common Core as the greatest threat to our freedoms and the future of our local education. I am asking the public to join with me in a debate on common core and how it is being implemented locally. I will publish a series of questions and provide answers to be debated and facts provided.

The basic purpose of common core is to impose thru a national program a uniform curriculum on K12 public schools. As a result of this uniform common core, they want to collect an immense amount of student data and use it to plan each student’s future education (university, community college or trade school) and eventually their slot in society. This plan would disregard the parents’ and the students’ rights and desires. This amounts to Federal control of education, freedoms and parental rights.

I agree that public education needs upgrading as we have had over 60 years of failure of public education. I agree that there should be a rigorous broad based national testing standard to which students, schools and teachers should be measured. However I believe in competition. Each state and even each City and County should develop their own curriculum and teaching methods with the full involvement of parents and taxpayers. Those states and cities that measure up and surpass the national measure should share their programs with others that do not measure up. Let the best ideas and results win. More federal money and one size fits all is not the answer. Let there be no less than 50 state experimental education laboratories competing with each other for top student achievers. Let education flourish in public, private, home schools, church schools with parents making a choice financed by taxes and vouchers. Let the competition begin with parental choice of what is best for their children, not what is best for Bill Gates, Pearson Publishing or DC politicians.

In future posts I will point out hard facts about common core, who is financing it, and who benefits. I welcome your comments.

The Handling of Appointed Positions

Tuesday, May 13th, 2014

May 13, 2014

The Handling of Appointed Positions

 

As the Memphis City Council discusses the problem of unfunded liability and possible solutions I hope they do not forget the handling of appointed positions and their action in January 2001 and their action in 2004. But more on that later.

 

What are appointed positions? I recently asked Shelby County Government for their list of appointed positions. As you will see this goes from the Assessor’s office all the way to the Trustee’s office for a total annual salary of $36.6 million. The latest list that I have from the City of Memphis shows a total annual salary of $21.7 million for appointed positions.

 

The difference here is that in January 2001 the City Council proposed and passed a resolution that allowed elected and appointed people to retire after 12 years regardless of age. This disastrous decision by the City Council and the mayor has added millions of dollars to our unfunded pension liability. After a city council member stated that this resolution would help keep and retain good (more…)

Pension Comparison, City Vs County

Tuesday, May 6th, 2014

May 6, 2014

Pension Comparison, City vs County

I have put together the essential information on the pension provisions of the City of Memphis pension plan and the County pension plan. This is shown in the attached spreadsheet. These provisions are in the new county plan D (adopted in 2012) and the new City plan adopted in 2013. I will comment on various provisions in the City plan that still need to be changed. However here is the bottom line.

The annual cost per retiree at the City of Memphis is $32,518 versus $19,218 at the County.

The unfunded liability at the City of Memphis is $709 million versus $161 million at the County.

The ratio of retirees to active employees at the City of Memphis is .79 versus .57 at the County.

The inescapable conclusion is that City of Memphis has had a loose system with rules that allowed too many people to get pensions for too much money and the County ran a much tighter system. The January 2001 pension resolution allowing elected and (more…)

Health Care At Local Public Employers Under Obamacare

Tuesday, March 25th, 2014

March 24, 2014

Health Care At Local Public Employers Under Obamacare

There was a fascinating presentation last Tuesday at the City of Memphis Executive Committee meeting. Shea Flinn introduced Stuart Collier of Collier Insurance who introduced Eric Hellman of Continuous Health.

Mr. Hellman’s presentation sought to explain Obamacare’s effect on health care and particularly its possible effect on health care costs for the City of Memphis and by the same token, Shelby County and the MLGW. It was a well done presentation and you can see his power point presentation here and also you can go to the City of Memphis website and see and hear the videotaped presentation (http://memphis.granicus.com/MediaPlayer.php?view_id=6&clip_id=4157).

It was long but very informative. What I got out of what he was saying is that the Affordable Care Act (Obamacare) opens up the possibility of reducing cost for the City of Memphis by letting lower paid employees go to the state exchanges to get subsidized coverage. That means the taxpayers, nationwide, will pick up part of our heath care cost.

There are four main points in Obamacare as it was originally signed. (Of course it changes day to day with executive orders).

  • All employees working 30 hours per week or more must be covered.
  • The coverage provided must be affordable. Affordable means it must pay at least 60% of the average medical costs of what the Department of Health and Human Services determines to be a standard population.
  • Obamacare limits the amount an employee can be required to pay towards the annual health insurance premium to 9.5% of the employee’s household income.
  • Obamacare requires coverage to be affordable and for those employees whose annual income is less than 400% of the Federal Poverty Level, Obamacare provides a federal tax credit to partially subsidize the purchase of insurance in a public exchange. This translates to individuals with incomes up to $44,680 and to families of four with incomes up to $92,200.

Confused? What a monster these DC politicians have created. However I think Collier and Hellman should be hired to present their (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.

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