Archive for the ‘Policy Proposals’ Category

OPEB-City of Memphis vs. Shelby County and MCS vs. Old Shelby County Schools

Tuesday, April 15th, 2014

April 15, 2014

OPEB-City of Memphis vs. Shelby County and MCS vs. Old Shelby County Schools

This is a very interesting subject and shows how badly the City of Memphis has been run, both the school systems and the general administration.

Look at the following attachments

A)    Shelby County CAFR from 2013 showing an unfunded liability of $306 million. DOWN $13 million from 2008 to 2013.

B)    Shelby County CAFR from 2008 showing an unfunded liability of $319 million.

C)    City of Memphis CAFR 2008 showing an unfunded liability of $857 million.

D)   City of Memphis CAFR 2013 showing an unfunded liability of $1.29 billion dollars. UP $433 million from 2008 to 2013.

E)     Old Shelby County Board of Education 2011 showing an unfunded liability of $334 million (June 2010)

F)     City of Memphis Board of Education 2011 showing an unfunded liability of $1.16 billion dollars.

So it is obvious that Shelby County has been much better run than the City of Memphis and congratulations to past Shelby County (more…)

Common Core Educational Standards-Good Or Bad?

Monday, March 10th, 2014

March 10, 2014

Common Core Educational Standards-Good Or Bad?

 

This is a subject that I consider more important than even pension reform. This will determine the educational level of our children and grandchildren and the future of our country both economically and from a freedom standpoint.

What Common Core purports to do is set a uniform school curriculum across the country leading to uniform testing and higher standards. What it is fact will do, if fully implemented, is take local control out of the hands of local school boards and particularly out of the hands of parents.

In my 10 years of “OPEN RECORDS ADVOCACY” I have come to the opinion that the most difficult people to get open records information from is local school bureaucrats, starting with the old Memphis School System and now the new Shelby County School bureaucracy which acts much like the old City of Memphis School bureaucracy.

This coming Friday evening Mrs. Karen Lamoreaux (Arkansas) will speak from 6:30 PM to 8:30 PM at White Station Church of Christ, 2nd floor, 1106 Colonial Road. Listen to her in a short youtube video as she took apart the local school board.

http://www.youtube.com/watch?v=wZEGijN_8R0

Please try to be there and learn what she is doing in Arkansas and nationwide.

This is a person who knows what is going on and we need to listen to her and take local action on our own school board. I feel her frustration as it is very difficult to get through the bureaucracy and get results.

Within the last few months I asked the Shelby County School System for the following information.

“I would like to have access to and view all data requests regarding data that the school system is collecting on the students. I would like to know if this data is requested and collected from the students directly without parental involvement or if the parents are requested to furnish this information or data and if this information is voluntary or required of the students or parents.

Their answer was the following.

“Your request is not granted because it is not understood.”

(more…)

Flying In Or Out Of Memphis

Tuesday, March 4th, 2014

March 4, 2014

Flying In Or Out Of Memphis

Yesterday I sent a letter to the editor of Commercial Appeal and it was published. It is shown below. As I read some of the reader comments to the letter, I was criticized for not being supportive of the new parking garage and for the future of Memphis. Believe me I want Memphis to grow and succeed and to get its fiscal house in order. Last week I asked for financial reports from the airport authority and while they were not published on the internet, they did send me electronically a huge list of Comprehensive Annual Financial Reports (CAFRs), a recent S&P credit rating report and lots of other information. All of this should be on their website but currently is not posted.

Here is some of the relevant data.

In the year 2000 we had 10.6 total passengers. In 2007 we had about the same numbers of total passengers. In 2013 we had 5.5 million passengers. Yet in 2001 they were planning the three story parking garage addition. In 2007 they stated in the CAFR that the new garage would proceed at a cost of $70 million dollars. Forward to 2009 and read the Memphis Business Journal article (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…)

$9 Million Blown Over Three Years

Thursday, February 6th, 2014

February 6, 2014

In reading through the Strategic Fiscal and Management Plan for the City of Memphis I keep finding things that amaze me as to the past fiscal mismanagement. It is quite clear that the City is supposed to pay 70% of the health care premiums and the employee is supposed to pay 30%. Look at the attached pages 46 through 49 of the plan. On page 46 the employees paid as low as 23.1% and as high as 26.9%. This cost you, the taxpayers, $9.2 million dollars over these three years. I presume the same was true for the OPEB retirees but I am checking. $9 million here, $5 million there and pretty soon you are talking about real money. On top of this mistake by the City, here is what the report says about the history and direction of health care cost, a huge part of the money problem.

On a fiscal year basis, from FY2008 to FY2012, the City’s General Fund contributions to the Basic and (more…)

DROP, The Pension Bomb

Tuesday, January 28th, 2014

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.

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Chickens Coming Home To Roost

Thursday, January 23rd, 2014

January 23, 2014

More Info From the Memphis CAFR

Pick up the CA and you will get more articles than you can read over your morning coffee. They all point to the upcoming decisions of the Mayor and the City Council. The chickens are coming home to roost as they have been disturbed by the noise of the cans that have been kicked down the road.

As I sift through the current 2013 Comprehensive Annual Financial Report (CAFR) of the City of Memphis, I decided to compare several pages from the 2008 CAFR with the same pages from the 2013 CAFR.

(more…)

Paying For Memphis Pension Reform

Thursday, January 16th, 2014

January 16, 2014

 

I have been comparing the past financial policies and results of the City of Memphis with Shelby County. Past Shelby County financial management has been much better than Memphis and the results are obvious when you compare the past and present Comprehensive Annual Financial Reports (CAFR) and the pension and other post employment benefits reports (OPEB).

Here is another example of where the County acted and the City did nothing. Both the City and the County have personnel policies concerning vacation, sick days and personal day policies that are well beyond what the private sector offers. Concerning vacations they both grant 5 weeks’ vacation after 25 years. The private sector is generally 3 to 4 weeks after 25 years.

Now the biggest difference is in sick days. Both the City and the County used to grant up to 2-1/2 days per month (30 days per year) (more…)

Paying With Tax Incremental Financing

Monday, January 6th, 2014

January 6, 2014

 

I spent the month of December trying to get answers to the following questions.

1)    How many tourist development zones (TDZs) have been approved by the state of Tennessee, the date of approval and a map or designation of the zones?

2)    For those zones that are approved, how much is the base sales and use tax amount from which the incremental amount of taxes will be distributed?

3)    How much incremental taxes have been received each year since the inception of the TDZ zones?

4)    On what have the incremental taxes been spent?

I asked these questions of the City of Memphis and have again and again been promised answers. I know that during the Christmas season it is hard to get action. I also asked the first three questions of the Tennessee Department of Revenue and did get some answers from them. I have attached a schedule of distributions to municipalities for qualified tourism development zones by fiscal years earned. Also I received a similar schedule for sales tax allocation for sports authorities such as the NBA facility in Memphis and the minor league baseball facility in Memphis. This is interesting information and you will see that Memphis received $13.2 million in FY 2011-12 for the only TDZ zones we currently have approved (downtown) and $1.9 million for the Arena and zero for the baseball facility in 2012.

I received further clarification from the state concerning the rules on TIF distribution as shown below.

Mr. Saino,

 In an attempt to answer your question related to the 1.9 million. The 1.9 million dollars was paid to the city of Memphis / Shelby County as a separate payment each month as the sales tax dollars for the Grizzlies is collected. The information of zero that you have relative to the Redbirds is incorrect the amount paid to the Memphis Redbirds foundation was $586,282.41. These amounts are after we take the ½ percent for education off the top of the collections.

In calculating the TDZ we do back the amount of these sports authorities off of the collections for that year in determining the growth to apply.

So in the year we are looking at the overall collections for state sales tax was $ 750,776,304.38(this figure includes food) we reduce that amount by the amount of total state sales tax collections relative to the sports authority which was $2,722,845.30 (please remember the figures are different because this is before the ½ percent for education is calculated).

That net number $748,053,459.08 is compared to the same data as the previous year to determine the overall growth in the area.

This growth is then applied to the base to create the current base in the 2011-12 year the base was $34,215,152.17. The TCA reads the TDZ will benefit from the amount collected within the TDZ area that was above the base. The amount collected in the zone for state sales tax was 50,352,645.09 ( we adjust this number by the ½ percent for education) Giving a net collections of $46,156,608.12 then we add the food sales tax collections within the TDZ area which was $176,729.12. Those two figures combined total net state sales tax collections $ 46,333,337.24. This is the amount compared to the base and the TDZ receives the above and beyond in this case it was $12, 118,185.06. The local portion of the sales tax is calculated under the same basis.

Please let me know if you have any questions.

 

I still want to know how this money is applied to our debt which I expect the City of Memphis to answer.

 

Now it is my understanding that the City of Memphis is asking for a second TDZ zone for the Fairgrounds project. The question is this. IS THIS A SOUND WAY TO FINANCE BIG PROJECTS LIKE BASSPRO, FAIRGROUNDS, PINCH DISTRICT AND ON AN ON?

 

Look at some of the other cities like Chattanooga and Sevierville that went down this same path. In one report there was the following statement.

 

*Chattanooga received no state sales tax distribution in 2007 because taxable sales fell below their pre-TIF level. Several businesses left the designated area.

 

Also Sevierville has had problems with paying for their debt by this method. So the assertion that there is no risk for tax incremental financing is not true. At the very least the City of Memphis should provide a detailed analysis showing the expected amount of incremental sales tax expected from the TDZ needed to pay the debt and tell the public and the taxpayers the truth about their downside risk if the expected sales tax revenue does not materialize.

The Truth About Sales Taxes

Thursday, November 21st, 2013

November 21, 2013

 

Close to $400,000 spent to pass this 1/2 cent sales tax increase. This is a top down proposal, we know better than you, type solution. City finances are on fire compared to the County which is in relatively good shape. This reminds me of Washington DC top down proposals. Shea Flinn and Jim Strickland are good guys and if they could get seven votes, they would reform city finances. Pastor  Whalum knows the problem and the people and I think he has a better handle on the solution.

The real problem that this is intended to address is simple in origin.

The problem is single parent families from which comes illiteracy and welfare dependency.

The answer is a stable family, a good education encouraged by the parents and taxpaying work.

This proposed solution nibbles around the edges and throws money at the problem with a little left over to reduce property taxes, maybe.

The proponents of this proposal think sales taxes are the answer to everything. Finance Bass Pro, rebuild the Sears Tower, finance fairgrounds, finance heritage trail, finance a new convention center all from increased sales taxes. Have you looked at your Memphis CAFR (Comprehensive Annual Financial Reports)? The local share of State Sales taxes have gone down by $4.5 million dollars from 2008 to 2012. And they tell you that all these projects can be financed by the incremental amount of sales tax collections generated by these multimillion dollar projects. Go figure!