Archive for the ‘Policy Proposals’ Category
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!
November 17, 2014
Transparency In The Private Sector
We have been treated to a lesson in arrogance in government with the revelations about MIT economics Professor Gruber concerning getting the Affordable Care Act (aka Obamacare) approved. Professor Gruber said that it was necessary to lie about the provisions of the act because the public was too stupid to understand what was good for them. This is the reason that full disclosure, transparency and open records are so vitally important.
But is transparency only important in the public sector where your tax dollars are being spent? What about the private sector?
My brother has a home in a development around a golf course in Ft. Collins, Colorado. He was aware of my interest in open records and the laws concerning access and he called me to ask about his situation. It seems that the government board of his housing association has consistently refused to give him access to financial information. I told him that he would need to research Colorado open records laws and he has hired a lawyer to assist in that effort. The board charges each homeowner for maintenance, repairs and upkeep but has failed to give details about contracts and details of expenditures. In other words, pay up and shut up.
Locally I have a friend who is an engineer and who plays in my duplicate bridge club. (By the way he is very bright and one of the best players). His name is Asan G. Tejwani. He has lived in Fountain Square Condominium, 1850 Poplar Woods Cir W, Germantown, TN 38138 since 1991. His email address is firstname.lastname@example.org.
He discussed with me his complaint about the lack of transparency of the Faith Management Company and the Board of Directors of the non profit condo association. I did some research about the Tennessee open records laws by contacting the State of Tennessee and was referred to the Tennessee Condo Act of 2008. One part of that lengthy document states as follows.
- 66-27-417. Association Records. The association shall keep financial
records sufficiently detailed to enable the association to comply with §§ 66-27-
502 and 66-27-503. All financial and other records shall be made reasonably
available for examination by any unit owner, the holder of any mortgage or deed
of trust encumbering a unit, and their respective authorized agents.
This seems to be the heart of Mr. Tejwani’s complaint and he puts his principles of human dealings in a most legitimate manner. They are as follows.
- Fiduciary responsibility.
- Due Diligence
I can’t disagree with those five principles. I am aware that there are two sides to every story. I would like to hear from other local condo and home owner associations as to their experience with boards and management concerning expenses and transparency and open records accountability. This is no nickel and dime operation as Mr. Tejwani is talking about an annual billing of $850,000 for his condo residents.
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.
October 30, 2014
ON THE EDGE (Economic Development Growth Engine)
Last Tuesday I attended the Memphis Rotary Club Luncheon at the University Club. The speaker was Mr. Reid Dulberger, President of EDGE and related entities.
He presented an excellent presentation of the PILOT (payment in lieu of taxes) program. His main point in favor of Pilots is his contention that without the Pilot program Memphis or Shelby County (or both) would lose the opportunity for new jobs or investment and future enhanced tax revenue. An example would be a company that expresses an interest in investing here or somewhere else. Unless we give them a tax break for up to 15 years, they say the company will go elsewhere. So the choice is nothing or something. That seems clear enough.
Another example is an existing local business taxpayer who says they want to expand but they need a tax break or they will not expand or they (more…)
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.
August 25, 2014
Recently I was scrolling around the City of Memphis website and I clicked on the office of talent and human capital and this is what I found.
I congratulate the Mayor for printing this information and pointing out that we have a long way to go. In looking at the chart, we are 47th out of 51 for people 25 and older who have completed a four year college degree. If you restrict that to 25 to 34 years old, we move from 47th to 46th. We are 51st out of 51 for mathematicians and scientists etc. We are 45th out of 51 as a percentage of metropolitan workers that have a college degree and are employed in private sector businesses but excluding health care and education. Lastly we are 43rd out of 51 as a percentage of metropolitan population 25 and older that have completed a four year college degree and were born outside the United States.
This last number is interesting as Memphis is at 7.7% and the leading city is at 49.6%. I would take a guess that the leading cities are places like San Francisco, San Jose, Dallas or Boston.
The person in charge of the office of talent and human capital is Douglas Scarboro and in a recent news article it was stated the following.
“In March 2010, Wharton hired Douglas Scarboro to serve as the head of the city’s new Office of Talent and Human Capital, designed to attract talented workers. After a staffer said Scarboro’s initial salary of $125,000 a year would be funded by a local nonprofit group, Wharton issued a public apology and said the city was funding the position.”
If Mr. Scarboro can bring these numbers up he is certainly earning his salary. What do you think?
August 4, 2014
A Smoking Gun
I have a reluctance to throw out old files that I have from 2001. So I decided to start cleaning out and throwing away old files. The first one I came across was an open records reply from 2007. It was a Mercer Health and Benefits report dated July 24, 2006. The title was “City of Memphis Retiree Medical Landscape 2006 and Beyond”.
Take a look at this report. It was a warning of what was coming from GASB (Government Accounting Standards Board 43 and 45) concerning OPEB reporting, Medicare Coordination, Service Based Contributions and Future Hires.
Why was this report Important?
- It will be a required part of the annual audit statement
- This will impact bond rating
- Unfunded liability is potentially 50 times current retiree health-claim cash flow
The report recommended plan changes such as
- Coordination of benefits on medical and surgical coverage with Medicare (Parts A & B) for all post 65 retirees.
- Adopting an age and service based contribution rate structure.
- Plan design changes to the retiree medical plan that will reduce costs to some reasonable level and help manage the liability.
- Medicare coordination will mean the City of Memphis will provide coverage for post-65 retirees only on a secondary basis and all post 65 retirees will be required to buy Medicare coverage.
- The City of Memphis will adopt separate rates for pre-65 and post-65 retirees.
- Retirees will contribute different amounts depending upon their length of service in active employment.
Is it any surprise that the City of Memphis ignored these recommendations and the County took the warnings to heart and adopted a similar recommended plan? This lack of action by the City in 2006 explains the current crisis we have at the City of Memphis.
July 18, 2014
There is a very important election coming up. Early voting starts today (only
downtown at the election commission). General early voting starts Monday July
21st and early voting ends Saturday August 2nd. The last voting day is Thursday
August 7th but only at your normal local voting site.
The ballot is huge. I have attached the ballot with my selections. I want you to
make your own choices but I want you to get out and vote.
I have been working with Eve and Eddie Settles and they have done a wonderful
job in researching the candidates. Be sure to go to www.backinrivercity.com and
read about the research they have done.
You will have to declare that you want to vote in the democrat or republican
primary. This is for the Governor, United States Senate, United States House of
Representatives, the Tennessee Senate, the Tennessee House of Representatives,
and the State Democrat or Republican executive committee people. This party
declaration will not prevent you from voting on the rest of the ballot which is
The final page of the ballot is interesting. It is to vote to Retain or Replace the
Tennessee Supreme Court judges (3 ea.), Court of Appeals Judges (10 ea.) and
Court of Criminal Appeals judges (10 ea.).
The Tennessee legislature voted recently to let the Judicial Nominating
Commission to expire and in November 2014 we will vote whether to adopt a
constitutional amendment for Tennessee, a system like the one set forth in the US
Constitution. I believe that an 8 year term is sufficient and should be at the end of
a distinguished legal career or the justice should go back to his legal practice to
earn his living, not be a career justice. Therefore I support the REPLACE vote.
I will be glad to answer any questions. 7540699