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GO TO OUR NEW BLOGS AND COMMENT ON OUR ARTICLES AND ON THE CHARTER COMMISSION. WE WILL PUBLISH NEW MATERIAL BOTH HERE AND ON OUR NEW BLOGS, shelbywatchdog.blogspot.com and chartercommission.blogspot.com. Click here to go to our new blog and comment on articles. Click here to go to our new charter commission blog and comment on needed changes to the charter. WE PLAN TO PUBLISH DAILY NEWS ITEMS ALONG WITH YOUR EMAILS AND OTHER COMMUNICATIONS. WE NEED YOUR HELP AS REPORTERS TO KEEP US INFORMED AS TO WHAT IS GOING ON IN THE CITY ADMINISTRATION, THE CITY COUNCIL, THE MLG&W AND OTHER BRANCHES OF LOCAL GOVERNMENT. WE WANT TRUE FACTS NOT JUST RUMORS. GIVE US WHAT YOU HAVE AND WE WILL PUBLISH IT HERE DAILY. WEBMASTER  October 24, 2006 The above statement was in a CA article this morning. Watchdog has been publishing examples of how the City of Memphis can save money. They should implement these savings and sources of revenue before they consider any new taxes. Here are some examples of big hits on local government by Herenton and city council 1. Linebarger contract- 5 million savings per year, cancel this stupid self serving contract and let Bob Patterson collect delinquent taxes. 2. Mata trolley system- 3 million loss per year, do away with this money losing system. 3. January 2001 pension resolution-over 60 million in present and future costs and current cost to date $3.6 million. This is an example of how the Mayor and the City Council threw away our scarce tax money. 4. Convention Center contract-60 million cost overrun over the initial bid, another example of how they wasted our tax money. 5. Fed Ex arena- 32 million left in pyramid debt and what happened to the extra floor of the parking garage and where is the intermodal transfer point and what happened to the original plans and specifications that no one can seem to find to compare with the “as built” drawings and specs? Some people should go to jail for this scam. 6. Appointed people over and above what is needed or allowed by the City Charter. Lay these people off and save $5 million per year. 7. Pilots and exempt properties $52 million per year. We desperately need independent oversight on this program and the City Council taking it over will not provide it. 8. Professional contract given to friends of the Mayor. Change this provision of the City Charter, really get competitive bids and save millions. 9. Don't build the Beale Street Landing as it is not needed and will save $27.5 million. October 20, 2006 Watchdog asked for the racial makeup of the City of Memphis employees and also their names, dates of employment and salaries. We have studied the results and we find that the racial makeup of the full time employees fairly matches the 2000 census figures for racial makeup of the City of Memphis. However we do find a discrepancy that is interesting. Maybe there is an explanation and we will check and report. • These reports show 6458 full time employees and 1751 temporary employees. However the 2007 budget shows 5578 employees. This is quite a difference. Click here to see a list of full time City of Memphis employees with their salaries, hire dates and their ethnic designation. Click here to see the list of temporary City of Memphis employees with their hourly rates or flat job rates, hire dates and their ethnic designation. October 16, 2006 The CA published a recap of this case brought by the partnership of Flautt and Mann against the City Council. The case is long running and complicated but what is clear is that Allan Wade, the well paid attorney for the City Council and recipient of lots of highly paid City legal work has cost the taxpayers of Memphis $1.8 million and counting at $1500 per day because he has flouted the court and is in willful contempt. But what does he care, it is only taxpayers’ money, not his or the City Council’s. The article was published in the CA on October 13, 2006 in the local news section under the heading “City’s tab: $1,000 a day”. This is just one of many incidents where Allan Wade has cost the taxpayers money. Take the case of William L. Thompson and his pensions from the MLGW. Larry Thompson was an employee of the MLGW and one of the most capable and respected employees at the Division. He should have succeeded Herman Morris as President but instead the Mayor appointed the failed director of Finance for the City, Joe Lee. Then Joe Lee forced Larry out at MLGW and in the process two of the board members talked privately and illegally about the severance agreement that the Division had with Mr. Thompson and they admitted this. (Rev. Netters and Olin Morris). Mr. Lee was trying to get rid of Mr. Thompson without honoring the severance agreement. Mr. Thompson took them to court and has won the case at this point. To date this has cost the taxpayers $73,645.68 of which $44,406.55 has been paid to Allan Wade to represent Mr. Lee. The balance of $29,239.13 has been paid to the Bogatin Law Firm. This is what it is costing the taxpayers to not do the right thing and honor a legal agreement. But who cares, it is only taxpayers money. Click here to see what the MLGW, Joe Lee and Allan Wade are costing you in a losing legal battle that should have never been brought. October 11, 2001 One of the worst decisions of our city government, both the Mayor and the City Council, was the unanimous approval of the January 2001 pension resolution allowing elected and appointed officials to retire after 12 years of service, regardless of age. Recently, watchdog asked for the cost information of this decision in an open records request. Here are the results. • The current annual cost of the pension payments as of august 2006 is $1,292,862. • The current annual cost of the medical premiums by the City is $393,000. • The total cost to date from the start date of January 16, 2001 is $3,653,503. • The total cost until all the eligible people have retired under this program is unknown but this is only for 56 people and there are hundreds more that are eligible. It will be well over $60 million dollars. Click below to see those who are receiving this largess and note some familiar names. • Roland McElrath, Director of Finance, who is now back working for the City. • Rick Masson, former Chief Administrative Office, who is now chairman of the MLGW board. • Robert Spence, former City Attorney, and now doing lots of City paid legal work. Click here to see who retired under this very expensive plan proposed by Mayor Herenton and voted for unanimously by the City Council in January 2001. October 11, 2006 Even a watchdog has to take a break now and then and this one just got back from a 19 day vacation. However I am back on the job and have some juicy items for our readers. Hold onto your hats. Regards, the Memphis Watchdog September 18, 2006 On next Tuesday, September 19, 2006 there is an item approving $50,000 to the Mid-South Minority Business Council. This is MLGW ratepayers’ money and that is not the only public taxpayers’ money the MMBC has received. Click here to see the agenda item (page 5, item 17) giving $50,000 of ratepayers' money to the MMBC Click here to see the previous payments to MMBC from MLGW with rate payer money. In April of this year watchdog asked in an open records request to see their records. They arrogantly refused to open their records. Read below to see the open records request and their answer. Watchdog again calls on them to open their records and if they do not do so voluntarily, then watchdog will file a lawsuit to open up this can of worms. AN OPEN RECORDS REQUEST TO THE MID-SOUTH MINORITY BUSINESS COUNCIL May 10, 2006 Watchdog has sent the following open records letter to the Mid-South Minority Business Council. April 28, 2006 Mr. Luke Yancy III President & Chief Executive Officer Mid-South Minority Business Council 158 Madison Avenue, Suite 300 Memphis, TN 38103 Dear Mr. Yancey, Since the Mid-South Minority Business Council receives public rate payer and tax payer monies and as a taxpayer of the City of Memphis and Shelby County I would like to inspect the municipal documents and records in accordance with the Tennessee Open Records Law that contain the following specific information. 1. The records and documents that show the names, yearly salaries, birth dates, job titles, years of completed creditable service towards retirement for all employees of the Mid-South Minority Business Council including the Board Members. 2. The records and documents that show which of the above employees listed in item 1 receive car allowances and which receive cell phone services and the cost of car allowances and cell phone services (whether paid for by Memphis or Shelby County or by some third party other than the employee) for each person who receive these benefits. 3. The records and documents that show the benefits and perks, including life and medical insurance, that you and the employees and board members receive. 4. The records and documents that show the operating budget for the Mid-South Minority Business Council for the fiscal years 2004 and 2005. 5. The records and documents that show all legal fees paid for the above fiscal years showing who they were paid to and the purpose of the legal expense. 6. The records and documents that show how companies apply for certification, and that show for 2004 and 2005 those that applied and those that were approved and those that were not approved. Also I want to see the list of those currently approved for minority business participation. I trust that you will inform promptly whatever department and personnel are necessary to make these documents ready for my inspection. In accordance with the open records laws I may want copies of some or all of the documents after inspection. Since I assume also that the documents containing the information requested should be available readily in file or on a computer, I should like to inspect the documents on Monday, May 8, 2006 at a time on that date at your convenience. If you need additional information or have questions about this request, I am available during working hours at 754-0699. Sincerely yours, We received the reply shown below by courier within a few days. Also take a look at the 990 tax return for the “NON-PROFIT” MMBC showing that in 2004 they had $684,301 in net assets (page 3, line 73). Why do they need ratepayer and taxpayer money? What are they doing with this money? Good questions. Click here to see the IRS form 990 for 2004 for MMBC, page 3, line 73. Click here to see the reply from Luke Yancey to watchdog's open records request to see how our tax money is being spent. September 15, 2006 Congratulations to Dedrick Brittenum to speak about cutting back on the obscene number of PILOTS in Memphis and Shelby County and to consider it is time to cutback and lower spending and property taxes. However, it will be a difficult process because when you look at who is getting the reductions, you see a reflection of who contributes the most to the Herenton Administration and local politicians. Click below to see who is getting the meat while the taxpayers are getting the bone. Click here to see what companies and individuals are getting the juicy PILOTS while the taxpayers get the bones. What is really needed is honest oversight on the PILOTS. Are these people living up to their promises of average salaries and job creations that they promised initially when they got the PILOT. I can guarantee that there is no honest and effective oversight. Click below to read the report that Mr. Brittenum read which indicates that these PILOTS are a giveaway and do not achieve what they promise. Also look at the following property tax rates for Memphis and Shelby County versus surrounding counties and Davidson (Nashville) county. Click here to read the report on PILOTS in Memphis and Shelby County. Property Tax rate comparisons • Memphis $7.4732 • Germantown 5.63 • Collierville 5.37 • Shelby County 4.09 • Nashville 4.69 • Davidson County 4.04 • Fayette County 1.74 • Tipton County 2.85 September 11, 2006 Watchdog was pointed to some statistics showing the State of the City (Memphis) and in some cases comparing Memphis to other similar cities. The statistics were provided through the Hope Christian Community Foundation. The full website is found at www.hopeccf.org. Click here to see the statistics about Memphis and Shelby County General Demographics- The population of Memphis and Shelby County are down for the period 2000 through 2005 by 1.2% for Memphis to .8% for Shelby County. In contrast, the population of the Memphis Metro Area (Tennessee, Mississippi and Arkansas) increased by 2.6%. So obviously people are moving out of Memphis and Shelby County. Memphis is 62.9% African American, 30% white and 7.1% Hispanic, Latino or others. Shelby County (including Memphis) is 50.9% African American, 42.4% white and 6.6% Hispanic or others. Labor Market- The labor force went from 441,250 in 2000 to 432,400 in 2005 with the unemployment rate going from 3.9% in 2000 to 6.4% in 2005. 16.1% of those employed work for governments in some form or another. Education- Memphis graduates 66% of its students whereas Shelby County graduates 89% and Tennessee graduates 78%. However the average expenditure per student in Memphis is $8602 versus $7007 for Shelby County and $7366 for Tennessee. FBI Statistics- The crime rate per 100,000 population for violent crimes is 1009 for Memphis versus 872 for Nashville and 554 for Dallas. The murder rate is 9.7 for Memphis versus 6.0 for Nashville and 7.3 for Dallas and 25.5 for New Orleans. Burglary is 1600 for Memphis versus 805 for Nashville. It is obvious that Memphis has problems and that some changes are needed to address these problems and propose some solutions. September 3, 2006 The rush to a living wage ordinance is hard for a politician to resist. How can you be against it? Don’t you believe in helping your neighbor? In church yesterday, my pastor requested that we sign cards urging the City Council to pass the ordinance. He said that all recipients of PILOT’s (payments in lieu of taxes) also toe the line and be included. He gave anecdotal evidence of other cities that had passed such ordinances and said that the City of Santa Fe had passed a city wide living wage ordinance. (He did not mention that Santa Fe is one of the wealthiest cities in the country). My problem with the fast passing of this ordinance is this. Has anyone done an analysis of the cost and benefits of this ordinance? I ask the following questions and think that these should be answered before passing this ordinance. • What is the annual cost to the taxpayers of this ordinance? How many permanent and temporary city employees now receive less than the proposed living wage and what is the annual cost to bring them up to the living wage? • How many city contractors paid less than the living wage last year and what would have been the cost to the taxpayers and the budget for the last fiscal year if the living wage ordinance had been in effect? • How many PILOT recipients pay less than the living wage and would they have accepted the PILOTS in the past if the living wage ordinance had been in effect? • Who is going to do the oversight on City contractors and PILOT recipients to make sure that they live up to the ordinance? Oversight, or lack of it, has always been the problem with all government programs, particularly City of Memphis programs. Only after these questions have been answered, can a informed decision be made on this proposal. Without the information, it is a feel good decision made on the basis on anecdotal evidence and stories. September 7, 2006 Shown below is an example of an open records request asking for clarification concerning watchdog’s request concerning how many Memphis vehicles have passed the required inspection test in order to buy car tags and how many vehicles did not pass the test. That seems to watchdog to be a fairly simple request. The answers are shown below. If any reader can answer my question, I would appreciate an answer. My guess is that 353,206 passed the test and 73,906 did not pass the test and did not pay their taxes and are still driving around on Memphis streets. That is over $2 million dollars in taxes not paid plus unsafe vehicles driving on our streets. HERE IS THE ANSWER FROM TAUYNA FALKNER MOTOR VEHICLE INSPECTION BUREAU FY 04 DATA SUMMARY The United States Environmental Protection Agency requires the City of Memphis Motor Vehicle Inspection Bureau to submit emissions inspection data on an annual basis (calendar year). The data reported in the City of Memphis Budget book is on a fiscal year basis. Listed below is the description of the FY04 data. A. Initial Tests – This data represents the first time a vehicle is inspected for emissions on an annually. Initial Tests for FY04 is 353,206 B. Total Tests – This data represents all the inspection test performs (initial, retests, safety, fleet ). Total Tests for FY04 is 427,112 C. Percent fail for emissions – This data represents the number of initial vehicle failures for emissions. The emission failures for FY04 is 11.5%. D. Percent failed for safety – This data represents the vehicles failed first time for safety. The safety failures for FY04 is 11.85%. The data supplied to Mr. Saino by the Jayne Cresson’s Shelby County Clerk’s Office is the current registration data and has so many variables that it cannot be compared to City of Memphis FY04 data. From: joseph saino Sent: Sunday, September 03, 2006 10:22 AM To: Falkner, Taunya Subject: RE: various open records matters HERE IS MY REQUEST TO THE CITY ATTORNEY Thank you for your reply. What I want to know and I think I asked for is the following. How many individual cars passed the test in FY 04 and how many other individual cars never passed the complete test and did not receive their certificate in order to make them eligible to buy their license renewals? I would appreciate an answer to these two questions. Regards, Joe Saino Here is the answer to the above request. According to the Public Services Division, the City of Memphis Motor Vehicle Inspection Bureau does not have access to this information nor generates a related report. Thank you! Taunya Falkner City of Memphis - Public Records Coordinator 125 N. Main Street, Room 336 Memphis, TN 38103 ________________________________________ August 31, 2006 You may remember the sad story of the indictment of Michael Hooks and his admission of guilt. His wife, Janet Hooks, was a member of the City Council and she resigned her position to take a job in the Herenton administration in order to make a better salary than she was receiving as a City Council member. She was appointed to the position of Director of Multicultural Affairs and Religious Affairs. See the attached letter from the Mayor appointing her to this post and also see the link to look at the website for this position. If there ever was a made up patronage job, this is the poster child for these positions. The former holder of this position, who was making a similar amount of money, was Ms. Naquinta Sims. Because of the January 2001 pension resolution allowing elected and appointed people to retire regardless of age after 12 years of service, she is now receiving a pension of $24,797.52 per year regardless of her age. She is also entitled to the generous medical benefits of retirees where the City pays 70% of the premiums. This pension will cost the taxpayers well over one million dollars over her lifetime. But consider the improved situation for Janet Hooks. She will now be able to retire from this position should she choose to do so with a pension based on her new salary ($74,263.08) calculated on the basis of 2.5% of monthly compensation times the years of service. She has been on the City Council for about 15 years and may have other creditable years of service somewhere else in the system. This will end up costing the taxpayers several millions dollars over her lifetime. This scenario runs through the list of appointed positions and needs to be changed. Hopefully the taxpayers will demand that the Charter Commission vote for this change so the taxpayers can put a stop to this abuse. Click here to see the webpage for the Director of Multicultural and Religious Affairs for the City of Memphis Click here to read the Mayor's letter of appointment for Janet Hooks and the details of the pension of Ms. Naquintas Sims. August 30, 2006 I just received an email from a brave soul with knowledge of Shelby County government. Thank you for alerting watchdog. The message points out an upcoming bid package for the County BID NO SB I001230 for Dell Computers. The bid due date is September 12, 2006 at 2:30 PM. The whistle blower points out that the County can buy Dell computers off of a State contract for a very cheap price with a considerable savings over the likely winner of this bid, Thomas Consultants. Click here to see the County bid sheet. Watchdog has posted a lot of information on Thomas Consultants in the past pointing out their successful contracts with the MLGW, the City of Memphis and the County. Here is a partial list of Thomas Consultants deals. • MLGW for $1,974,572 • MLGW for $1,420,812 • City of Memphis thru the ACS contract for $2,351,055 • Shelby County Government for $934,856.21 We have been told that Thomas Consultants does a good job. The point is what is it costing the taxpayers for these minority contracts? We do not know although the Shelby County contract appeared to cost more than a quarter million dollars over and above the Gateway price. The success of Thomas Consultants raises the question of whether this firm should be graduated. I refer to a letter dated April 20, 2004 to the Mid-South Minority Business Council from Carlee M. McCullough, Esq., Contract Compliance Officer. In this letter she pointed out the graduation of Gipson Mechanical. Surely Thomas Consultants more than meets this requirement and no longer deserves special consideration at the expense of the taxpayer. Click here to read about Gipson Mechanical's graduation from the minority preference program. July 31, 2006 Yesterday the Commercial Appeal quoted Mayor Herenton in connection with the Charter Commission as follows. “There is a hidden agenda among some charter commission candidates, inspired by a movement originating outside the city limits, to upset the balance between the legislative and executive branches. The Mayor-Council form provides for a strong chief executive officer with sole contracting authority and they want to change that. They want to put limitations on the authority and responsibility of the mayor. That’s what ther’re really getting at.” Watchdog admits to wanting to stop this Mayor and any future Mayors from being able to award contracts without any other oversight or approval, contracts and actions such as the ones shown below. • The Linebarger contract for the collection of unpaid taxes which the Mayor gave to law firm buddies in Dallas which provided for a 20% commission rate whereas Bob Patterson, the County Trustee was willing to do the same job for 2%. This has cost the taxpayers $5 million dollars per year. Can you think of any legal reason why someone would do this? • The ACS contract for computer services and supplies which provides in the contract for no bid purchase orders to certain favored firms run by supporters of the Mayor. Reginald French (Integrate Technologies) $1.4 million, Marvell Mitchell (Mitchell Technology Group), $1.8 million, Darrell K. Thomas (Thomas Consultants), $2.3 million and others for a total of $11 million. This has cost the taxpayers at least $2.75 million over and above competitive bids. • The Oracle contract in which the City refuses to reveal the connection of Reginald French with Oracle and the amount of any commission on this $9 million dollar contract. • The over 281 appointed employees over and above that allowed by the City Charter. By laying off only 112 of these people, we could save $5 million per year in salaries but the Mayor has refused to consider laying off his patronage employee friends and the City Council has done nothing to correct this situation. So, Commercial Appeal, we do have an agenda but it is not hidden. It is to bring fiscal sanity and discipline to City Government regardless of who is the Mayor, now or in the future. August 29, 2007 A thoughtful and informed reader of watchdog has sent in the following email in response to this article. The problem is weak laws and lack of enforcement of those laws we do have. The result is a loss of tax income and unsafe cars on our streets. This is an enforcement issue. If the failed inspection cars are still on Memphis streets, they are operating with expired, or bogus, tags because, if you live in the city limits, you can't renew your registration without proof of inspection. The solution is stepped up police enforcement. These are people who don't give a damn about most laws ... much less, vehicle registration laws. The cops need to be pulling over every car they see with expired, or no, tags and arresting / citing the driver & impounding the "illegal" vehicle. These vehicles are on the streets illegally and most are probably not insured. I see cars all the time with no, or expired, tags. It's simply "one more thing" the police tend to ignore (unless it coincides with a traffic stop). Kind of like parking in handicapped spots, litterbugs, loud exhausts & stereos, etc. The city, or the county, could easily develop a list of unregistered / uninspected vehicles in the city ... but, what good would it do with no enforcement. Are they going to bill these scofflaws???? Will they pay??? I hardly think it's worth the effort. Look at the mess with Thomas Long & the city court fines. In that situation, as I wrote to your city council & Long, a while back, there needs to be a state law that automatically suspends a driver's license for unpaid motor vehicle fines. Very simple to implement & a very effective policy. In fact, without state assistance, the city could bar a vehicle inspection for any resident owing traffic fines ... which would prohibit them from registering their vehicle ... and, would make them very "visible" to law enforcement. Awww .... why even mention anything that makes sense???? Then, you have to consider enforcement. You're in Memphis. The problem is with the very weak state vehicle registration / auto insurance laws and the lack of local enforcement of the existing law. Tennessee has "third world" laws with regard to motor vehicles. "When an individual's registration, or auto insurance, expires, they should be required by law to return their tags to the state before the expiration date (s). If they do not comply ... their driver's license should be revoked. That, my friend, is how the civilized world handles the scofflaws. August 27, 2006 Watchdog has become involved in a search for knowledge about car tags and the taxes on these tags. It started out with a question which was “Do we really need or want a new auto inspection station in Memphis?" It has blossomed since then and here are the facts as we know them to date. We call on our readers who may be knowledgeable about this situation to provide information. • Only Memphis cars require yearly inspections. Shelby County cars do not require inspections. • On my Memphis car I pay $108.00 per year of which $28.50 goes to the City of Memphis ($30.00 less $1.50 collection fee), $24.00 goes to the State of Tennessee, $50.00 goes to the County as a wheel tax, $2.00 is an electronic processing fee and $2.00 is postage. • We were told by the Shelby County Clerk that they reported in an EPA report that there were 962967 vehicles registered in Shelby County of which 594,733 were registered in Memphis. We were also told that of the 962967 vehicles registered, 163,000 registrations have expired. • In the City of Memphis budget document, it says that 427,112 vehicles were inspected in FY2004. It also says that 11.74% failed the emissions test and 11.85% failed the safety inspection. Presumably only 376,000 actually passed the test and 51,000 never passed the test. • The financial statement of the City of Memphis for FY2004 states that the income from auto licenses was $10.47 million which divided by $28.50 per license equates to 367,000 vehicles which is about right. • I asked the Shelby County Clerk the following hypothetical question. “What if I register my car in Memphis originally and then I move somewhere else out of Shelby County. How do you know about this.” Their answer was, they do not know and have no way of knowing, which I assume accounts for the 163,000 expired registrations. I know that I am rambling on about this subject but I wonder about the 51,000 cars that failed the test or at least did not pay the fee. This is over $5 million dollars not collected. Also I wonder how many autos in Shelby County do not pay this tax and how can we find out and collect these unpaid taxes. There has to be a better way and I am asking readers of this website and the general public to suggest a way to know how many vehicles are in Memphis and Shelby County and to assure that all taxes are paid and collected. That is not happening now. August 24, 2006 Here are some of the most important items that need to be addressed by the Charter Commission in the upcoming discussions with the public. There will no doubt be many more issue and questions, the following issues illustrate the most egregious problems that certainly need solutions. • TERM LIMITS- Prevent elected officials from getting the tenure that gives them the position to sell their influence to developers and other buyers of political influence exhibited by Tennessee Waltz. • NO SALE OF MLGW WITHOUT VOTER APPROVAL- Because MLGW is piling up cash at the ratepayers expense, politicians want to get their hands on the cash. As of December 31, 2005, MLGW had $167 million in unrestricted cash, up from $111 million in one year. The law says that any surplus remaining after establishment of proper reserves, shall be devoted solely to the reduction of rates. SEE HOW MUCH OF YOUR UTILITY BILL IS BEING HELD IN UNRESTRICED CASH BELOW. • THIGHTEN ETHICS RULES- No election official should be able to serve if he benefits from any contract involving City taxpayer money even if he recuses himself from voting on that particular contract or issue. • PENSION REFORM- the January 2001 pension change has cost millions of dollars to date and will go on costing millions more as these elected and appointed officials retire. Since hardly any of the taxpaying public has a defined benefit pension plan anymore, a defined contribution plan should be instituted in the future for all newly hired public employees. • OPEN RECORDS- Only by putting all important contract bids, purchase orders, personnel salaries and benefits on the internet and by making open records access easier, can we keep the sunshine on government practices which politicians like to conceal. The current no bid purchase orders given under the ACS contract shield is an example of gross abuse and lack of transparency in bidding and awarding contracts. • APPOINTEES- There were over 400 appointees whereas the charter, according to Sara Hall’s reading, only allows about 110. This needs to be defined and limited to much less. The January 2001 pension resolution allowing elected and appointed officials to collect pensions and health benefits after only 12 years regardless of age has already cost millions and has the potential to cost $60 million if all of the current eligible elected and appointed people retire under that provision. SEE BELOW A LIST OF APPOINTED CITY OFFICIALS. • RESTRICT ELECTED OFFICIALS FROM VOTING MEMBERSHIP ON CITY AND COUNTY BOARDS AND COMMISSIONS- This is where the influence peddling starts and needs to be stopped. As an example, Rickey Peete is chairman of the Center City Commission and is on the Center City Development Board and on the Pilot committee of the Industrial Development Board. Barbara Shearengen Holt is on the Center City Commission board. Scott McCormick is on the Pilot evaluation committee. There are so many boards and commissions that it is difficult to get a full picture of all of the members. • CONTRACTING AUTHORITY- Prohibit the Mayor, any Mayor, from signing any contract unless it has been approved and funded by the City Council. The Linebarger contract given to a firm charging 20% commission for the collection of delinquent taxes when the County Trustee offered to collect the same money for 2% is a good example of abuse. Click here to see how much cash from your utility bills is being held by the MLGW in unrestricted cash as of December 31, 2005. Click here to see who had been appointed by Mayor Herenton as of March 2005 and what their jobs were and how much they were making in salary. August 21, 2006 Watchdog has been informed that last Thursday, August 17, 2006 at the MLGW board meeting, that the long standing anti-nepotism policy at the MLGW was revoked. It was not on the regular agenda but was an add on item that the public did not know was coming up for a vote. This is outrageous but not unexpected at the MLGW. After all the MLGW is run by Mayor Herenton and his appointees on the MLGW board. This is the final nail in the MLGW coffin and is a fitting epitaph on the MLGW headstone. This will cause the morale and performance to go down even more as more and more of the Mayor’s friends and relatives come down to the MLGW job bank with their lack of skills and talents. Last one out turn on the lights, if you know how. Watchdog saw this coming and we printed the article below in April 2005. ANTI-NEPOTISM POLICY AT MLGW. IS IT HERE TO STAY? April 21, 2005 The MLGW has a very strict anti-nepotism policy as shown in the download page below. The City does not have such a policy as is shown by the many related people working for the City. I have been told that Joe Lee would like to see this policy changed at the MLGW to be like the City. As you may remember, he hired his cousin at the City to a $70K per year job before he came to the MLGW. Makes you wonder. Click here to read the MLGW anti-nepotism policy. Also read a story about nepotism at the City of Memphis which has never had an anti-nepotism policy like the MLGW had for years. This is the result on no anti-nepotism policy. Click here to read what happens when your policy is to hire your relatives. August 16, 2006 Watchdog has been pursuing the question of vehicle inspections and car tags. What we have found to date is that no one really seems to know how many cars have not been inspected in Memphis and more importantly, how many owners have not paid their fees and taxes on their vehicles. Ms. Susan Henning who is in the deputy administrator in the office of the Shelby County Clerk, Jayne S. Creson, has told watchdog that 594,733 vehicles were registered in Memphis. However, according to the City budget, only 427,000 vehicles were inspected. Click here to see the motor vehicle inspection budget and the number of vehicles inspected. This leaves about 167,000 vehicles uninspected. Now there are some city vehicles and some business trucks and heavyweight vehicles that are not inspected but not in that number. Therefore the question is why would someone not have his car inspected. The obvious answer is that the owner does not want to pay the fee to get the sticker to make his license legal. This could mean that the City, the County and the State are losing up to $10 million or more. How could we correct this situation? If we have the registration and we have the inspection information, we could cross check the two lists and find out who is not having their vehicles inspected and then follow up and demand that they pay up or be fined. Modern computer technology could make this an easy job. We need to find the cheaters and make them pay up. August 14, 2006 One of the most important issues that the new Charter Commission should consider is adding new provisions to our open records sunshine laws. Watchdog has published previously information on the huge Oracle contracts with the City of Memphis. It is a contract that was supposed to cost $42 million and is above $70 million now. Also in a recent open records letter to MLGW on their dealing with Oracle, we find that they have spent millions on Oracle contracts also starting in 1999. The rumor all along has been that Reginald French, acting as a business agent or a commission agent for Oracle, has been receiving payments from Oracle on these huge contracts. This is public money and the public is entitled to know if this is true. Therefore we asked Sara Hall for this information. She replied that the City of Memphis does not maintain Oracle records or documents. Watchdog then requested the same information from Oracle and we pointed out the Tennessee Supreme Court Decision in the case brought by the Commercial Appeal in the Cherokee child care case which decision stated that if it was public money spent with a private firm that the public was entitled to know. However Oracle’s lawyer stated in a reply as follows, “The case cited in your letter and email found that Cherokee Children's and Family Services was acting in a governmental capacity and therefore was subject to the Open Records law. Oracle, however, is not acting in that capacity and therefore has no obligation to respond to a taxpayer's request for documents or information. Further, the court stated, "We caution that our holding clearly is not intended to allow public access to the records of every private entity which provides any specific, contracted-for services to governmental agencies. A private business does not open its records to public scrutiny merely by doing business with, or performing services on behalf of, state or municipal government." Click here to read the open records letters requesting Oracle commission information and the negative replies. The MLGW’s answer is in the same nature. They state “MLGW’s contract with Oracle does not request Oracle submit copies of payments to subcontractors or commission agents to MLGW.” Therefore we have both the City and MLGW stonewalling on this request and it appears that they are covering up something. In another request to Sara Hall watchdog stated that the City of Memphis could ask Oracle for this information and Oracle would comply. No answer was received to that suggestion. The only alternative is a lawsuit against the City of Memphis to finally get this information to which the taxpaying public is clearly entitled. If this kind of information and transparency was required by the City Charter, we would not be going through these legal gyrations. If there is nothing to hide, why stonewall? August 7, 2006 Every time I get in line to have my car inspected, the temperature of my car’s engine goes up but not nearly as fast as my blood pressure. I sit there burning up $3.00 per gallon gas for up to an hour and finally a bored city employee sticks a lance up my tailpipe and hopefully tells me everything is OK or maybe not. There has to be a better way. The City’s solution, build another inspection station and hire more employees. Out of frustration I wrote the open records letter shown below to start to gather information on this process. Click here to see the open records requests about car tags and inspections. We are all aware of all the cars that we see on the streets of Memphis with temporary tags. What is going on? Who is paying and who is not? Click below to see the answer that I got from my open records letter from the Shelby County Clerk, Jayne S. Creson. Click here to read the letter from Janyne Creson in answer to my open records request. I talked to Ms. Henning, a very courteous and knowledgeable person. In spite of the fact that all motor vehicle records contain a municipality code and therefore they record motor vehicles within the Memphis City limits and outside of the City of Memphis, she could not give me the information I wanted because the County Attorney said that they would have to spend some time getting this information and that the open records law did not allow me to request information that was not readily available. However she eventually got back to me with the information from another source. She said that there were 594733 vehicles registered in Memphis and 962967 in Shelby County which includes the 594733 that are in Memphis. With my Certificate of Vehicle Registration Renewal in front of me I asked her about the charges. My bill was $108.00. I live in Memphis. • $30.00 goes to the City of Memphis less $1.50 to the County Clerk as a processing fee. • $24.00 goes to the State of Tennessee • $50.00 goes to the County as a wheel tax. • $2.00 is an electronic processing fee. • $2.00 postage The people in the county do not have to pay the $30.00 to the City and they do not have to get their vehicles inspected. How do they know if someone lives in the County or City? They require two items, a picture ID, a MLGW bill, a telephone bill, a voter’s registration, a credit card bill etc. etc. I call on the public to submit new ideas for auto inspections and for the whole process of vehicle registration. My own various thoughts are as follows. • Do away with the inspection stations and license service stations to inspect cars so that they could be inspected when you get your oil changed and your tires rotated. • Inspect all cars, city and county. • Keep the current inspection stations but allow the public to reserve a time and charge for that reservation, say $25.00. The last time I went through, it took about 5 to 6 minutes to inspect once I got to the head of the line. The wait in line was about 1 hour. • Start stopping cars with temporary tags to see if they are legitimate. It is very easy to duplicate temporary tags. • Is there any way to verify that the sticker on the license is real and not some computer generated false copy? • Does anybody give a damn? Watchdog will be glad to publish your thoughts and suggestions. August 2, 2006 If there was ever an example of the need for changes in the City Charter, it was illustrated yesterday by the above vote. Only under pressure of the charter commission vote did the City Council even take up the issue of term limits and you see the result. The City Council is overwhelmingly Democrat and the others are Republican or Independent. Brent Taylor, a Republican, said the dumbest thing. He was quoted saying “that term limits would cause too much institutional knowledge to be lost.” He voted against term limits. If the present City Council is an example of institutional knowledge, then we can only hope that the majority of them and their so called knowledge will be lost either to term limits or to the next election. Time after time, this City Council has made the wrong decisions and together with a really terrible Mayor, has brought this City to financial ruin. The tax paying public clearly wants term limits. They also want voter approval of any proposed sale of MLGW, ethics reform, pension reform, restricted contracting authority for the Mayor, tougher open records requirements and other changes. Only the Concerned Citizens of Memphis slate (the CCM is solely responsible for giving the voters this opportunity) can be counted on the do this without fear or favor. The following statement which ran in the Commercial Appeal yesterday and the Flyer today says it all. Vote for all seven CCM candidates tomorrow. Click here to read who really wants changes in Charter and who wants to keep things just as they are. Just in time for the August 3rd 2006 election, the City prepares to give more IT business to their friends and supporters. Watchdog has been alerted to the following two RFP’S that will end up with one of their friends such as Reginald French, Darrell K. Thomas or Marvell Mitchell. Under the cover of the ACS contract, the first one for Dell computers and other equipment has a distribution date for the RFP of 7/24/06 and a proposal due date of 8/4/06. This is the type of equipment that consistently HAS been given to the following firms under the cover of the ACS contract. Click here to see the favored firms under the ACS cover. Click here to see the RFP proposal. Note the short time period. This absolutely discourages competition and ensures that certain firms will end up with the business. The other one is the Oracle Professional Resource contract which has a June 27, 2006 issue date and a July 7, 2006 response date. This is also obviously a set deal with no real competition. Click here to see the set up Oracle proposal. An interesting point also is that Carlee McCullough is the Contract Compliance Officer for these contracts. The same Carlee McCullough who is running for Chancery Court Judge against Judge Goldin. July 14, 2006 Henry Kissinger once said that corrupt politicians give the other 10% a bad name. Many people have asked watchdog for voting recommendations on the huge ballot for which early voting starts today, July 14, 2006. The one sure recommendation that I recommend to you is concerning the Charter Commission race and here I recommend the “Concerned Citizen of Memphis slate” as shown below. Position 1 Joe Fox Position 2 John Malmo Position 3 Charles J. “Chuck” Strong Position 4 Fred L. Davis Position 5 Rusty Hensley Position 6 Patsy Turner Position 7 Anthony (Tony) Milton These are all non political (not politicians and no political ambitions) and they do not represent democrats or republicans. The slate is made up of men and women, democrats, republicans and independents, African Americans and whites and they are all concerned taxpayers and upset with the current Herenton administration. They want real change and if you want the same, vote for them. As far as the democratic or republican primaries, watchdog does not have any dogs in that fight but if I was voting in the democratic primary I would vote for Steve Cohen for the District 9 House of representatives. He is honest and part of the 10% that Kissinger mentioned above. One greatly overlooked question is the YES/NO vote which you only get every 8 years for the Supreme Court and the Appellate Court judges. I am recommending the following three judges for a NO vote. David Farmer NO-Voted against term limits and voted against allowing a 2004 vote on the charter commission. Alan E. Highers NO-Voted against term limits Holly Kirby NO-Voted against allowing a 2004 vote on the charter commission The following are suggestions for the best candidates for the confusing ballot of judges, clerks, sheriff, trustee, etc. Circuit Court Judge Division 2 James F. Russell Circuit Court Judge Division 6 Jerry Stokes Circuit Court Judge Division 8 No recommendation Chancellor Part 2 Arnold Goldin Chancellor Part 3 Kenny Armstrong Criminal Court Judge Division 1 Paula Skahan Criminal Court Judge Division 4 Carolyn Wade Blackett Criminal Court Judge Division 5 Jim Lammey Criminal Court Judge Division 6 W. Fred Axely Criminal Court Judge Division 7 Larry Nance Criminal Court Judge Division 9 Mark Ward District Attorney General Bill gibbons County Mayor John H. Willingham Shelby County Bd of Commissioners Dist 5 Jane Pierotti Trustee Bob Patterson General Sessions Judge Div 3 Charles McDonald General Sessions Judge Div 4 Deborah Means Henderson General Sessions Judge Div 5 Evan Nahmias General Sessions Judge Div 7 Ann Pugh General Sessions Judge Div 11 Karen Lynn Massey General Sessions Judge Div 12 No recommendation General Sessions Judge Div 13 Louis J. Montesi, Jr. Juvenile Court Judge Curtis S. Person Probate Court Judge Donn Southern Sheriff Mark H. Luttrell Circuit Court Clerk Jimmy Moore Criminal Court Clerk Bill Key Juvenile Court Clerk Steven Stamson Probate Court Clerk Chris Thomas County Clerk Debbie Stamson register Tom Leatherwood July 24, 2006 MLGW IS DEAD LAST IN THE PRESTIGIOUS JD POWER RATINGS OF PUBLIC UTILITIES!! WHAT IS THEIR RESPONSE? THEY REPORTED THAT THEY WERE RATED VERY HIGH IN THEIR OWN SURVEY. GO FIGURE. Ever since Joe Lee took over from Herman Morris in 2004, MLGW has been going downhill at an ever increasing rate. Low morale due to unfair promotion selections, new job hires and salary levels for unqualified candidates. Watchdog has been reporting on this since the beginning. But the biggest unreported news, other than in the watchdog website, is the pile of cash that MLGW is sitting on which should be returned to the ratepayers in rate reductions in accordance with the law. You will see the unrestricted cash at $167MM as of December 31, 2005 compared to $111MM as of December 31, 2004. You will see the net working capital (current assets less current liabilities) of $233MM versus $188MM at the end of 2004. Click here to see the essential figures from the MLGW 2005 Annual Report. Watchdog asks the following questions. • Why does the MLGW keep piling up net working capital and retained earnings when it is supposed to be a non profit organization devoted to providing the lowest utility rates to its customers? • The MLGW is a monopoly with no competition and the law says that any surplus remaining, after establishment of proper reserves, if any, shall be devoted solely to the reduction of rates. • The MLGW says that their policy is to have enough cash to pay one month’s bills. They are keeping millions more than that, in the order of over $100MM. • And do not forget that the MLGW water division will pay $60MM through the year 2026 to retire the bonds for the benefit of the Grizzlies and the FedEx Arena and Parking Garage. The MLGW ratepayers should demand that this pile of cash and cash equivalents be returned to the ratepayers in the form of rate reductions or mitigations of future proposed rate increases. The MLGW should operate as close to zero profit as possible for the benefit of the rate payers who are suffering while Rome is having public games in the new Memphis Coliseum. Also remember that by reducing this honeypot to close to zero, the bear at the other end of Main Street will not come sniffing around. July 18, 2006 WHAT IS WRONG WITH OUR TWO PARTY ELECTION SYSTEM? THE FACT THAT THERE ARE ONLY TWO PARTIES!!! The lawsuit threatened by LaSimba Gray and the Rainbow coalition is ridiculous. Article XI, section 9 of the Tennessee Constitution says the members of the Charter Commission shall be “chosen at large”. It was the City Council that, in an effort to try to block the charter commission, passed ordinance #5079 to dictate that one member of the charter commission could be elected from each of the seven council districts. However because of the “chosen at large” provision of the Tennessee Constitution, they knew that every voter had a constitutional right to vote for a candidate in each of the seven positions. Both the local Democrat and the Republican parties do not want to see an independent charter commission like the slate proposed by the Concerned Citizens of Memphis. The Democrats actively opposed the formation of the charter commission and filed a lawsuit to oppose the early voting for the election of the members. The head of the Shelby County Republican Party actually told John Lunt that they did not want a charter commission and they liked the charter just as it was and did not want to disturb it. Now both the Democrats and the Republicans are running a slate of candidates. Neither actually want any real changes. If you look at the total Shelby County Democrat Unity Ballot you will see that there is only one local white candidate, Gail Mathes. Prominent of the top page is a picture (not a candidate) of convicted criminal Rickey Peete. On the Shelby County Republican ballot there are two or three blacks, mostly in the judicial election posts. It is obvious that these two parties are playing the race game to the detriment of the tax paying public. What this country (and especially this county) needs is a third party and watchdog proposes creating one now called the Taxpayers Party. After all we, the taxpayers, pay the bills, we furnish these lush top jobs, salaries, pensions, health benefits, great vacations, sick leaves, free days and other perks that very few of us who pays the bills get in private industry. Watchdog is sick of hearing City Council members cry about laying off someone when the job of the City Council, the MLGW, the County Commission and both Mayors should be to run public services as efficiently as possible, not create and sustain public service jobs. It is time that the taxpayers unite under a common cause and that is to support candidates that want to truly serve the public with the most cost efficient service and not view the elected job as a means to line their pockets, get a great pension or have influence in development or land use decisions. Good elected officials come in a variety of shapes and sizes and the qualities of good public officials have nothing to do with race, creed or gender. It has to do with education, experience, talent and ethics. The top jobs of Mayor, City Council and the County Commission should be for a maximum of an eight year stint of public service and then they should go back to private industry or private practice. The idea of the value of institutional memory in long serving politicians like we now have in the City Council is greatly overrated and actually dangerous to the public purse. Therefore watchdog recommends that you vote for the Concerned Citizens of Memphis slate of seven candidates. Joe Fox, Position 1, John Malmo, Position 2, Charles J. “Chuck” Strong, Position 3 Fred L. Davis, Position 4, Rusty Hensley, Position 5 Patsy Turner, Position 6 and Anthony (Tony) Milton, Position 7 August 23, 2006 Here are some of the most important items that need to be addressed by the Charter Commission in the upcoming discussions with the public. There will no doubt be many more issues and questions, but the following issues illustrate the most egregious problems that certainly need solutions. Term Limits- Prevent elected officials from getting the tenure that gives them the position to sell their influence to developers and other buyers of politicians as exhibited by Tennessee Waltz. No MLGW sale with voter approval- Because MLGW is piling up cash at the ratepayers expense, politicians want to get their hands on the cash. As of December 31, 2005, MLGW had $167 million in unrestricted cash up from $111 million in one year. The law says that any surplus remaining after establishment of proper reserves, shall be devoted solely to the reduction of rates. Click here to see who had been appointed by Mayor Herenton as of March 2005 and what their jobs were and how much they were making in salary. Restrict Elected Officials from voting membership on city and county boards and commission- This is where the influence peddling starts and needs to be stopped. As an example, Rickey Peete is chairman of the Center City Commission and is on the Center City Development Board and on the Pilot evaluation committee of the Industrial Development Board. Barbara Swearengen Holt is on the Center City Commission board. Scott McCormick is on the Pilot evaluation committee. There are so many board and commissions that it is difficult to get a full picture of all of the members. Contracting Authority- Prohibit Mayor from signing any contract unless it has been approved and funded by city council. The Linebarger contract given to a firm charging 20% for the collection of delinquent taxes when the County Trustee offered to collect the same money for 2% is a good example of the abuse by the Mayor. July 10, 2006 Recently watchdog reported on the ACS contract and all the no bid subcontracts embedded in the overall 533 page ACS contract. Click below to see some of the favored companies who have received over $11 million in no bid subcontracts under the cover of the outsourced ACS contract. Many of these no bid subcontractors are close supporters of the Administration. This contract along with many other outrageous City of Memphis contracts and mistakes (think Linebarger, Beale Street Development, Cannon Center, FedEx garage, Riverfront Development, January 2001 pension resolution) explains why there is no money left for raises for the police, firemen, sanitation workers and other lower paid city employees. The ACS contract and the recent Oracle contract are good examples of no bid contracts that eat up millions of dollars of taxpayer money so that at the end of the day, there is no money left for those that do the actual day to day work of providing city services. But there is always plenty left over for the top officials and their supporters. Click here to see how successful certain minority vendors were under this City/ACS contract. Now click below to read some of these actual no bid contracts given to Memphis Networx, Ewing Moving Services, Mitchell Technology, Integrate Technology, Lesure Computer Service and Oracle. Click here to read the Memphis Networx Contract under the ACS no bid umbrella. Click here to read the Ewing Moving Services Contract under the ACS no bid umbrella. Click here to read the Mitchell Technology Group Contract under the ACS no bid umbrella. Click here to read the Integrate (Reginald French) Contract under the ACS no bid umbrella. Click here to read the Lesure Contract under the ACS no bid umbrella. Click here to read the Oracle Contract under the ACS no bid umbrella. July 13, 2006 Watchdog decided to see who in Memphis has contributed to Mayor Wharton’s campaign, how some of the money was spent and how much is left over. ($283,369.06 as of 2/21/06). It is very revealing to see the same contributors come up again and again.Quickly going through the list we see the following familiar names. Note the payments to Roscoe Dixon, Michael Hooks and W. W. Herenton. Expenditures Committee to Re-Elect Mayor W. W. Herenton 5/14/03 $2,000 Roscoe Dixon, Contract Services 5/27/03 $3,000 Friends of Roscoe Dixon 9/03-9/04 $1,000 Friends of Michael Hook 9/03-9/04 $1,000 Roscoe Dixon Senate Campaign 9/03-9/04 $1,000 Yo! Memphis 9/03-9/04 $500 Robert J. Lanier, Salary 9/04-9/05 $23,345 Robert J. Lanier, Salary 9/05-12/05 $9,338 Contributions Ron Belz 9/02-9/03 $333.40 Jack Belz 9/02-9/03 $666.60 John and Lisa Bobango 9/02-9/03 $2,000 total J. Bayard Boyle Jr. 9/02-9/03 $500.00 Charles E. Carpenter 9/02-9/03 $500.00 Gregory M. Duckett 9/02-9/03 $250.00 Federal Express Pac 9/02-9/03 $5,000.00 James F. Huntzicker 9/02-9/03 $500.00 Jim Rout for County Mayor 9/02-0/03 $500.00 Autozoners for better government 9/03-9/04 $1,000 Jack Belz 9/03-9/04 $1333.20 Ron A. Belz 9/03-9/04 $666.80 J. Bayard Boyle Jr. 9/03-9/04 $1000.00 Committee to Elect Dr. W. W. Herenton 9/03-9/04 $1000.00 Reginald French 9/03-9/04 $1000.00 Arnold E. Perl 9/03-9/04 $1000.00 Darrell K. Thomas 9/03-9/04 $1000.00 Henry M. Turley 9/03-9/04 $1000.00 Dan B. Turley Jr. 9/03-9/04 $1000.00 Ricky E. Wilkins 9/03-9/04 $1000.00 We have posted the contributors and the expenditures. Take a look and you will see many of the same contributors as on the Herenton list. Click here to see who contributed to Mayor Wharton. Click here to see who got paid from Mayaor Wharton's war chest. June 28, 2006 Watchdog decided to see who in Memphis has contributed to Mayor Herenton’s campaign, how some of the money was spent and how much is left over. It is very revealing to see the same contributors come up again and again.Quickly going through the 2003 list we see the following familiar names. Boyle, Duckett, lots of Heisleys, Lenderman, Less, Getz and Lipman, Masson, Meadows, Spence, First Tennessee Bank, Wharton, Fogelman, Turley, Hyneman, Tate and on and on. Take a look at the list below. Click here to see who contributed to Herenton campaign pot. Now take a look at how some of the money was spent. It takes money to get elected. You have to pay poll workers, van drivers, travel expenses, parties, printing, billboard ads, radio and TV ads.Two names are of special interest as shown below. Reginald French • 8/11/03 Campaign Consultant Services $9,000 • 8/20/03 Supplies $181.14 • 8/20/03 Office Supplies $340.60 • 8/29/03 Various Expenses $239.79 • 9/5/03 Reimbursement $52 • 9/18/03 Reimbursement $126.10 • 9/26/03 Software/Computer Work $150 • 10/2/03 Office Supplies $150.38 • 10/23/03 Consulting Fee Campaign $9,000 Total $19,240.01 Dewey Clark: • 8/20/03 $1,000 • 8/29/03 $500 • 9/5/03 $530.96 • 9/12/03 $500 • 9/18/03 $500 • 9/25/03 $500 • 10/2/03 $500 • 10/17/03 $500 Total $4530.96 In addition to the over $19,000 above, French got $23,400 paid to his Idalis Enterprises LLC for campaign consulting in the 1999 Herenton campaign. Dewey Clark was a witness in the corruption trial of former Atlanta mayor Bill Campbell and said that he gave Herenton $9,000 — in Herenton’s office. A wiretapped audiotape on which Clark said such was introduced into evidence at the Atlanta trial. Campbell was later convicted of tax evasion. Clark testified he also gave a $1,000 campaign contribution to Herenton. He said he also gave $1,000 each for Reginald French, a former aide to Herenton now in private business, and French's wife, to put in their names as campaign contributions to Herenton. Click here to see who contributed to Herenton campaign pot. How much is in the pot now or as of 11-25-05. Well, how about $450,378.00. Not bad. Seems like a lot of people have a very keen interest in seeing that Mayor Herenton stays in office. Wonder why? Good Government? NAH!!! July 5, 2006 CITY AWARDS $42 MILLION CONTRACT By CHRIS PRZYBYSZEWSKI The City of Memphis awarded a $42.1 million contract for outsourcing the Division of Information Systems to Systems and Computer Technology Corporation (SCT), ending a ten-month search. Mayor Willie Herenton announced the decision to City Council members Tuesday in a session marked by unusual secrecy plus some heated remarks from Councilman Janet Hooks. SCT, a publicly traded company headquartered in Malvern, Pa., won the bid over Electonic Data Systems and Affiliated Computer Services. Herenton said a key factor was SCT’s commitment to award 10 percent of professional services contracts and 50 percent of vendor contracts to “certified minority vendors.” The seven-year contract should be finalized next month, according to City Finance and Administration Director Roland McElrath. Herenton had told the city council during a planning session in January that he planned to outsource the Division of Information Systems, which handles telephones and computers. He said Tuesday that it had already been outsourced Òfor all practical The mayor acknowledged that there has been intense interest in the contract award, which featured lots of lobbying of both the mayor and council members. He said that was one reason he took the unusual step of asking to be placed on the council agenda without specifying his reason. “It’s almost like this needed to be a secret,” complained Hooks, who said she needed more information to respond to queries from her constituents. “I’m glad to hear that,” Herenton repeated several times as Hooks continued to vent. Herenton said the contract will cost a bit more than the city had been spending in the short run but should save money in the long run. All employees in the division -- approximately 40 people -- will be hired by SCT if they desire jobs. Herenton went to unusual lengths to vouch for the integrity of the selection process. “I know the various groups (that were interested), I know the rumors going around,” he said. Originally there were 18 firms that expressed interest in the job. “Evidently there is a lot of money on the line here,” said Councilman Tom Marshall, who said the selection committee, of which he was a member, was fair. The city hired a Germantown firm, SCB Computer Technology, for $467,000 to help it evaluate the contenders. SCT, the winning firm, has nearly 3,400 employees and serves more than 2500 clients worldwide. What has actually happened to this contract of which Tom Marshall said was fair. • SCB Computer Technology, a Germantown Company, had a $467,000 contract to help choose the outsourcing firm but was involved in various legal problems such as its own admission of overstating earnings and lawsuits alleging stockholders were defrauded. • In late 2000, just prior to the City awarding the IT outsourcing contract, Reginald French purchased Associated Softworks (ASW) from Ronald Jung for roughly $100,000 and Jung is now suing French claiming French funneled company money to start a new IT firm called Integrate Technologies. • The City awarded Systems and Computer Technology (SCT) an IT outsourcing contract for $41 million in November 2000, which would be purchased by ACS six months later. • Due to a recent watchdog open records request the cost of the ACS contract as of May 22, 2006 was $69.4 million. This contract which was to cost $41 million over seven years has cost $69.4 million in 4-1/2 years. At this rate, the seven year cost will be $108 million. See the attached memo confirming money spent so far. click here to see the memo confirming $69.4 million spent so far on the ACS contract. Does this sound like the Memphis you know and love to pay taxes to? In addition to the above boondoggle, there is the Oracle contract on top of the ACS contract. The first part of this was purchased in 2004 and was supposed to cost $7.2 million. Click below to see the City Council resolution increasing the cost of this to $9.3 million. It is rumored that Reginald French is receiving a commission on this huge continuing contract but that is yet to be verified by Oracle. Carol Chumney was quoted as follows on this matter. Court transcripts obtained by Action News 5 suggest that Reginald French, a former city administrator and aide to Memphis Mayor Willie Herenton, parlayed years of city experience and contacts into millions of dollars in city contracts. "You try not to have people making decisions on contracts who are related to somebody or who have affiliations that might taint their judgment," said City Councilwoman Carol Chumney. Chumney worries about a nine million dollar city deal to buy Oracle software that sent a two-million dollar commission to French. click here to see the beginning resolution to a very costly Oracle contract costing much more than originally planned. But what is not in doubt is that the following firms and some others were imbedded in the original ACS contract and continue to receive no bid purchase orders as shown in the attached file. Click here to see some familiar firms and supporters of the Mayor who continue to get no bid minority contracts. The question which continues to be asked and not answered is “What are these no bid contracts costing the City and the County in the name of minority purchasing.” If you have no bid contracts, how do you know how much you are paying over and above competitively bid market prices? June 22, 2006 One of the readers of watchdog kindly sent us a copy of the recent raises given to city employees from January 2, 2006 to April 29, 2006. (Lick below to see the list) These raises contrast with the zero increases to the balance of the city employees. In looking through the list some are interesting due to the size of the increases. • Robert M. Knecht Mgr. Drain Maint $43,212 to $62,320 • Chandell W. Ryan Mgr. Labor Rel_EEO $58,349 to $95,516 • Thomas Earl Morris Oper.Spec Equip II $30,743 to $53,834 • Steven R. Cole Chief.Polic Svcs.Dpty $67,420 to $100,617 • Michael Lee Smith Chief.Polic Svcs.Dpty $78,772 to $100,617 In all, 170 raises were given during the first half of this year. Many were step increases, outlined in city policy. Others involved changes in job titles, a favorite ploy by politicians to reward their loyal supporters and some were given based on pay rates in other cities. The last is another favorite excuse given by politicians to inflate their salaries. Salaries should be based on merit and results and there is precious little in good results in the handling of city business. Click here to read the list of the lucky raise winners amongst city employees. June 26, 2006 Watchdog has been trying to find out the rules and the true cost of minority purchasing requirements in Memphis City government, Shelby County government, MLGW and other branches of local government. Here is an interesting example. Click below to read the recent open records request to the Shelby County government. Click here to read watchdog's open records request to Shelby County government. Last Friday, watchdog went to the Shelby County Office building and met with various personnel. They were very competent, friendly, open and cooperative. Watchdog was trying to find out what the cost of minority preferences was on various contracts. First we went to the finance division where we looked at various invoices over the period requested. We found no invoices from Reginald French or Integrate Technologies, no invoices from Associated Softworks or Affiliated Computer Services, No invoices from Monguinn Enterprises and a very small amount from Mitchell Technology Group. However we found lots of invoices from Thomas Consultants (Darrell K. Thomas) starting in 2003 and running through 2004. The total for this period as we calculate it is $934,856.21. But the important fact about this revelation is how it came about. We were trying to determine if Thomas got this amount of business through competitive bidding. There was in fact a sealed bid process as shown on the documents below. Click here to see the paperwork and bid evaluations of this multi million dollar bid on computers for the county. It was sealed bid No. I000745 dated 3-25-03. There were 17 RFB’s sent out and 7 bids received. The total pricing is shown on the attached documents and it shows that Thomas Consultants bid $7299.00 versus Gateway Companies bid of $5383.00, a 26% difference for desktop computers. There is a point award process that awards 50% of the points to price and the balance to other factors as shown. The selected companies were Gateway at 97.13 total awarded points and Thomas Consultants at 76.23. On the basis of this analysis each company was awarded an estimated annual expenditure of $3MM over a three year period, $6MM total. This decision was signed by Sybille S. Noble, Administrator of Purchasing on 7-7-03. What actually happened? In response to watchdog’s open records request, we found that Thomas Consultants received purchase orders for $934,856.21 and Gateway received orders for $39,572.00. At 26% price differential, this means that the taxpayers paid $232,773.00 extra over and above the Gateway price. There is no explanation and no justification for this split of the orders other than what you can read on the attached documents. Shown also is an example purchase order to Thomas Consultants for 50 A-OPEN computers at $1231.75 ea. These orders went to most branches of Shelby County government including but not limited to the following. • Shelby County Election Commission • Shelby County Sheriff’s Office • Shelby County Regional Service • Shelby County Support Services • Shelby County Public Defender • Shelby County General Sessions • Shelby County Code Enforcement • Shelby County General Sessions • Shelby County Fire Department • Shelby County Corrections Center • Shelby County Health Services • Shelby County Attorney • Shelby County Housing • Shelby County Assessor and of course the Shelby County Mayor The initial contract was renewed for another year until June 30, 2005 and probably beyond. Obviously the word has come down that the orders are to go to Thomas Consultants, not Gateway. In addition Mayor Wharton nominated Darrell Thomas to the Shelby County Healthcare Corporation. Thomas Consultants also sells medical billing software. Again, our question is “What is the cost of minority set asides? The taxpayers need to know what these programs are costing and are these extra costs being fairly and evenly distributed in the minority business community or just to a favored few.” Here are other Thomas Consultants deals. • MLGW for $1,974,572 • MLGW for $1,420,812 • City of Memphis thru the ACS contract- $2,351,055 It is obvious that Mr. Thomas is well connected to all branches of local government. June 19, 2006 After more than 5 months we get the financial statement posted on the internet by the MLGW. Still no budgets posted as do the other branches of local government. Click below to see a spreadsheet showing the essentials of the report. Click here to see the essential figures from the MLGW 2005 Annual Report. You will see the unrestricted cash at $167MM as of December 31, 2005 compared to $111MM as of December 31, 2004. You will see the net working capital (current assets less current liabilities) of $233MM versus $188MM at the end of 2004. Watchdog asks the following questions. • Why does the MLGW keep piling up net working capital and retained earnings when it is supposed to be a non profit organization devoted to providing the lowest utility rates to its customers? • The MLGW is a monopoly with no competition and the law says that any surplus remaining, after establishment of proper reserves, if any, shall be devoted solely to the reduction of rates. • The MLGW says that their policy is to have enough cash to pay one month’s bills. They are keeping millions more than that, in the order of over $100MM. • And do not forget that the MLGW water division will pay $60MM through the year 2026 to retire the bonds for the benefit of the Grizzlies and the FedEx Arena and Parking Garage. The MLGW ratepayers should demand that this pile of cash and cash equivalents be returned to the ratepayers in the form of rate reductions or mitigations of future proposed rate increases. The MLGW should operate as close to zero profit as possible for the benefit of the rate payers who are suffering while Rome is having public games in the new Memphis Coliseum. Also remember that by reducing this honeypot to close to zero, the bear at the other end of Main Street will not come sniffing around. Click below to see the 2005 balance sheet from the MLGW financial statement. Click here to see the balance sheet from the MLGW 2005 Annual Report. June 16, 2006 Some time ago someone sent an email to watchdog and asked how many appointed positions were in Shelby County Government. Since we have written a lot about the appointed positions in the City of Memphis Government and the fact that around 110 positions are allowed by the City Charter but the Mayor has over 400 and the fact that the City Council passed the January 2001 pension resolution which could allow them all to retire after 12 years regardless of age and start receiving their pensions and health care benefits immediately, we thought we would ask the County the question. As usual, the County was very prompt and cooperative and gave us the information. First let me say that there is no similar January 2001 pension resolution that applies to these county employees but I was surprised at the number and the dollars involved. The county charter does not have any restriction of appointed employees like the City Charter supposedly has, and they have a lot more elected officials so the number is probably not surprising but it is a lot of dollars and people. We have attached below a list of all the appointed employees in the following offices. • TRUSTEE • SHERIFF • REGISTER • PROBATE CLERK • PROBATE JUDGES • JUVENILE COURT JUDGE • JUVENILE COURT CLERK • GENERAL SESSIONS JUDGE • GENERAL SESSIONS COURT CLERK • LEGISLATIVE • COUNTY COURT CLERK • CRIMINAL COURT CLERK • CIRCUIT COURT CLERK • CHANCERY COURT CLERK • ATTORNEY GENERAL • ASSESSOR • MAYOR The total annual salaries of these 573 employees is $33,501,341.86 of which 47% is in Mayor A. C. Wharton’s office. Looking at the employees in Wharton’s office we see some familiar names such as • Ricky E. Wilkins • Dedrick Brittenum Jr. (Now also on City Council) • Monice H. Tate • John L. Ryder • Martin W Zummach • Mark E Beutelschies • Gordon B Olswing Lots of legal talent there mostly on a part time basis. Also one other point we note is that county employees are employed for 37.5 hours per week, not the normal 40 or more hours of the taxpaying stiffs who work in private industry. Click here to see shat your taxes are paying for in Shelby County Government. June 13, 2006 Watchdog has been following the controversy of the FedEx parking garage and it has been fascinating. More and more information is coming to light. There is a certain odor that is beginning to emanate from this project but everyone is denying that they had anything to do with it and that everything is OK. Watchdog has obtained a summary of expenses by vendors which is shown below in the attachment. Watchdog does not pretend to know all the firms and individuals who had their fingers in the plum pie but a few stand out. • Charles E Carpenter $345,660.70 • Hoops, L.P. $5,191,321.32 • Mid-South Minority Business Council $49,999.98 • Monguinn Enterprises Consulting $239,624.97 • The Ingram Group $291,569.53 These all may be legitimate expenses but each of these expenses need to be explained and invoices need to be furnished to verify what services were performed for these billings. The expense for the Mid-South Minority Business Council at 2 cents less than $50,000 is interesting. So far, it has been very difficult to get this information as the powers that be have not been very forthcoming. Also remember Heidi Shafer and her campaign for a referendum on the Arena construction. The law allowed a referendum on a project of this size when it was financed by ad valorem (property taxes) taxes. At the last minute, when the City and the County realized they were going to lose on the referendum, they changed to revenue taxes to finance the $250 million dollar arena. BUT REMEMBER THAT THESE REVENUE BONDS ARE STILL FULL FAITH AND CREDIT BONDS AND WHEN AND IF THEY FAIL TO PRODUCE THE NEEDED REVENUES TO PAY THE BONDS, THE CITY AND THE COUNTY WILL BE COMING BACK TO THE TAXPAYERS AND RAISING OUR PROPERTY TAXES BUT SAYING THAT IT IS NOT BECAUSE OF THE REVENUE BONDS. DON’T BELIEVE IT. Hopefully that will not happen but recent attempts to sell the Grizzlies do not give watchdog any great confidence in the future income for these revenue bonds. Click here to see who feasted on the FedEx arena banquet. June 14, 2006 On April 11, 2006 watchdog sent the following open records request to the MLGW. April 11, 2006 Ms. Amy Burch Coordinator of Access to Public Records Memphis Light, Gas and Water 220 South Main Street Memphis, Tennessee 38103 Dear Ms. Burch, In accordance with instructions and as a taxpayer of the City of Memphis I would like to inspect the municipal documents in accordance with the Tennessee Open Records Law that contain the following specific information. 1. The records and documents that show any and all contracts and/or payments to or with Thomas Consultants Inc (TCI) and any contracts or payments to Mr. Darrell K. Thomas from January 1, 2000 to the present date, April 11, 2006. The records and documents should show the bidding process, the date of the bid openings and the losing competitive bids. I trust that you will inform promptly whatever department and personnel are necessary to make this information and documents ready for my inspection. In accordance with the MLGW policy concerning copies and cost of copies, I may want copies of some or all of the documents after inspection. Since I assume that all the information requested is on computer or in an available file and should be available readily. I expect you should have this information by April 21, 2006. If you need additional information or have questions about this request, I am available during working hours at 754-0699. Sincerely yours, Joe Saino 6560 Kirby Forest Cove Memphis, Tennessee 38119 On may 26 we picked up the follwing two sheets from MLGW concerning the open records request. One memo was from Jim Moncrief, the Supervisor of the Contract Management Department saying that there did not have any records of contracts with Thomas Consultants or with Darrell K. Thomas. There was another sheet which we received which showed $1,169,359.29 in purchase orders issued to Thomas Consultants since the year 2000. Apparently purchase orders were issued to Thomas Consultants without benefit of competitive bids. Nice work if you can get it. Click here to read how much Darrell K. Thomas got in no bid purchase orders from MLGW. June 12, 2006 We hope that this is not true but in Memphis you have to wonder what with all the waltzing going on. The recent stories in the CA and the media about the FedEx parking garage is a good example of you scratch my back and I will scratch yours. All parties to this scam claim that it was a misunderstanding and they do not know how a non profit intermodal transfer facility transformed into a for profit parking garage for the Grizzlies. TDOT, Mata, the City, the County, the State, the Feds etc. etc. all cannot understand how it happened. Well, we understand and here are the facts. Everybody knew all along that it was to be a parking garage which was to be given to the Grizzlies and that part of the garage would be turned into an office for the Grizzlies which the taxpayers would pay for. All the intermodal talk was just eyewash in order to get the money. Now the administration is trying to spin it to say that it no big deal. Don't believe it. Here are the facts. • Letters dated March 25, 2002 from the Tennessee Department of Transportation to Mayors Herenton and Rout committing $20 million to build an intermodal transfer facility with 1800 parking spaces which turned out to be 1500 parking spaces plus the Grizzlies office. • City contract #N16219 dated October 30, 2002 for the same facility but now it is for 1500 cars, not 1800. Memphis is to pay 20% of the cost or around $4 million plus. Please note the language intended to clothe the project in its intermodal disguise. “The Project will be operated so as to provide public parking during workday periods to relieve traffic congestion in the Memphis central business district.” “A public transportation system will be available for those persons wishing to use the Project facility, consisting of the MATA bus service which will serve the site along Third Street (SR 14) and the MATA light rail line nearby on Main Street.” • What happened to the missing 300 parking spaces. Guess What!! The Grizzlies have their offices in that space and, according to one source, also got $1 million plus in office furniture and equipment. • And on top of all that largess, they get all the income from the garage under the Memphis Arena Use and Operating Agreement. What a deal. See below some of the documents concerning this scam. Click here to read to read the letters that started the parking garage incident. Click here to read how an 1800 car garage became a 1500 car garage plus the Grizzlies office. June 9, 2006 To: Friends and supporters of memphiswatchdog.org From: Joe Saino Subject: An opportunity to change Memphis City Government On August 3rd, 2006 there is a unique opportunity to change the City of Memphis political situation for the better. It is the election of seven members of the Charter Commission. Watchdog has been working hard since the petition drive in 2004 to expose the failings of the Herenton administration, the MLGW, the City Council and a lot of other related boards and commissions. It has not been easy and only the availability of the Tennessee open records laws has made a lot of information possible to obtain and post on watchdog. Watchdog has become a popular website with thousands of hits but we need to expand this unique treasure trove of information to more Memphis taxpayers and make them voters on August 3rd of this year. Therefore we are asking you to contribute to memphiswatchdog.org. We have formed a PAC (memphiswatchdog.org) and we are asking you to help us raise money for two purposes. • For the support of the Concerned Citizens of Memphis slate of seven candidates who are listed in the next column named "THE SLATE TO ELECT." To donate go to the following column, "CHARTER DOMMISSION DONATIONS" in order to donate by credit card. Or you can donate by check to the PO BOX listed below. • For the support and advertising to promote the website of memphiswatchdog.org to continue to make public all relevant information about local government. Only by making government transparent can we hope to get a more honest and responsive government. Watchdog will make public all accounting and expenditures of money raised and will take no salary or benefits from this money. It will be strictly used for the above purposes. We will take contributions up to $1000.00 from individuals but no cash contributions (checks are OK) and no contributions from corporations. The law requires that any contribution over $100 (either in a single or a cumulative contribution) from an individual must be posted in a quarterly report with the name of the individual. To make a contribution, send a check to memphiswatchdog.org to PO Box 172301, Memphis, Tennessee 38187-6141 or you can make a contribution by credit card on the website. We also want your help and support during the campaign. Talk to your neighbors, your church, neighborhood and civic groups and if you want a speaker, contact us at 7540699 to make arrangement. With your help, we will make a permanent change for the better in Memphis and Shelby County. June 7, 2006 In a March 19th, 2006 Commercial Appeal article involving Reginald French’s contracts with the City of Memphis, French made the following statement, “This was strictly done by a fair process, who said he got no help from the mayor or anyone else in landing the city work.” Herenton was even quoted as saying about Carol Chumney, who made the inquiry, “I know what people are suggesting, who called Chumney's inquiry “crazy” and said he's never assisted French in any way to win city business. ‘This lady is a loose cannon.’” On Monday, Watchdog showed you just how much of a misstatement these two made with Carlee McCullough’s request to have Integrate Technologies’ minority application pushed through the process. Click here to read the fax from Carlee McCullough to Lillie Alford demanding immediate approval for Integrate Technologies (Reginald French) so he could get a contract that was already approved. Also there is the question of how qualified Mr. French was concerning the highly technical area of computers and programs. Click below to read parts of a deposition given by Mr. French concerning his technical qualifications. Click here to read about Reginald French's technical qualifications to handle a technical contract with the City of Memphis. Today we will show you just how much more help Integrate Technologies (among others) received. Below is page 440 of the SCT/ACS contract with the City of Memphis. In it, it shows the City of Memphis’ directive to assure purchases for minority procurement by SCT/ACS were limited to a handful of select vendors, namely: Thomas Consultants – owned by Darrell Thomas, candidate for the Charter Commission Mitchell Technologies – owned by Marvell Mitchell, director of minority development at the Regional Chamber of Commerce (the originator of the MidSouth Minority Business Council) and candidate for Harold Ford’s 9th District Congressional position. Integrate Technologies – owned by Reginald French, candidate for Shelby County Sheriff, former campaign manger for the mayor, and former city administrator. LeSure Computer Services Trinity Technologies Click here to see a provision of the City of Memphis contract with SCT (later becoming ACS) directing them to use certain minority vendors. Click here to see how successful certain minority vendors were under this City/ACS contract. Over 90% of all hardware and software purchased, over $13MM by SCT/ACS during the life of this seven year contract were made through the above vendors. The attorney who approved this contract was former city attorney Robert Spence, which a source has informed Watchdog now represents ACS regarding contracts with the City of Memphis. The City procurement code states that any monies spent in excess of $50,000 must be procured through competitive bid. In 2000, Herenton stated in a Memphis Flyer article that one reason why SCT was selected was because of their commitment of 50% of all monies spent be awarded to “certified minority vendors.” Is that the reason for French’s push for certification by Carlee McCullough? Was that also the reason why he was added to the list of the select few vendors? That seems like a considerable amount of help for someone who claims to have not been helped at all. June 5, 2006 Watchdog has been going through only a portion of the mountains of paper obtained in open records requests from the City of Memphis recently. Over the next several weeks we will be posting what we find on the website. We have been shocked by the extent of the effort to award minority contracts without bids. The question is “How do we know what these contracts are costing over and above the competitive market price if there are no competitive bids?” We post below two revealing items that shows the intensity of the effort to award these no bid contracts. • One is a memo from Carlee M. McCullough, Contract Compliance Officer for the City of Memphis, dated December 27, 2004 to the Mayor, Keith McGee and Sara Hall. In it she complains about Mel Scheuerman, BDC-Administrator but brags about the $8 million dollars doled out to Allan Wade, Ricky Wilkins, Banks, Finley & White, Marvell Mitchell (Mitchell Technology), Darrell K. Thomas (Thomas Consultants), Reginald French (Integrate Technologies) and others. More than half of the $8 million was through ACS and the other $4 million was through the City direct. • The other is a fax dated October 29, 2002 from Carlee McCullough to Lillie Alford of the Uniform Certification Agency (UCA) asking for an expedited review for Integrate Technologies (Reginald French) saying that they had a contract on the table and they needed the classification immediately to validate the contract. Mr. French started receiving contracts through ACS in July of 2003 and to date has received about $1.5 million total. Draw your own conclusions as to what this is costing the taxpayers and who is benefitting. Click here to read the memorandoum from Carlee McCulough to the Mayor about M/WBE Accomplishments FYE 2004. Click here to read the fax from Carlee McCullough to Lillie Alford demanding immediate approval for Integrate Technologies (Reginald French) so he could get a contract that was already approved. May 31, 2006 Watchdog has been investigating this subject in order to bring out the cost of the stated policies in the various ordinances. If these policies perform the stated function of teaching minority and women firms how to compete in the business world and then graduate into the normal competitive business world, that is good. However, if it is merely a means of rewarding friends and supporters, then that should also become public information along with the cost to the rate payers and taxpayers. Recently watchdog picked up a number of papers from the MLGW and the City of Memphis in response to several open records requests. At MLGW there were several large bids for computers. For years MLGW, being a large user of computers, has been buying direct from Dell and other suppliers. However on these two contracts a different method was used. One was a 36 month contract for Rackmount Servers in accordance with MLGW specifications dated January 12, 2004. Another was a 60 month contract for laptop and mini-tower personal computers also in 2004. The details are listed below and you can read about the results. Dell Marketing L. P. bid as did Thomas Consultants, Inc. (Darrell K. Thomas, owner). Dell was low at $1,356,357 with Thomas at $1,420,812. However Thomas Consultants was awarded the job for the same Dell computers at an additional cost of $64,455. The other contract was more interesting for 1725 computers. Trinity Technologies, Inc was awarded the contract at $2,468,215 whereas Dell was the lowest of the complete bids at $2,398,005. However in February 2006 Trinity Technology advised that there were unable to furnish the computers in accordance with MLGW specifications and the job was given to Thomas Consultants for $1,974,572. They in turn are furnishing Dell computers with apparently a 5% (about $100,000) markup for Thomas Consultants. The interesting thing here is that the MWBEC City Code states that if a minority subcontracts 50% or more of the work, the minority contractor shall be presumed not to be performing a commercially useful function. See the code below. Click here to read the part of the City Code concerning subcontracts. Click here to read about the Thomas and Dell bids on contract 122510. Click here to read about the Thomas and Dell bids on contract 127120. As the headline indicates, this is only the tip of the minority contracting iceberg. Click on the two items below and see what watchdog has received from the City of Memphis. We have the ACS (Affiliated Computer Services) Summary Reports for Minority/Women Enterprise Participation from July 2002 through March 2006. It reports on all the minority purchasing done through ACS during this period. We assume most if not all of these contracts were non competitive bids given to these firms. We have asked for the details of these contracts and are awaiting the information. Look at the spreadsheet shown below. We have concentrated on those firms whose owners are good friends of the Mayor and who ended up with a large amount of contracts. This is only the City of Memphis through ACS. The MLGW, MATA, The Airport Authority, the Memphis City Schools, Shelby County and others are also involved. On the spreadsheet we have concentrated on Lesure Computer Services, Integrate Technologies, Mitchell Technology Group, Thomas Consultants, Trinity Technologies and Small Planet Works. There are many others. Click here to see how much each of these firms received in contracts under the City of Memphis ACS program. Click here to see the full ACS monthly reports and how much each of these firms received in contracts under the City of Memphis ACS program. What is the cost to the taxpayers and rate payers. Frankly we do not know because there are no competitive free and open bidders. We need to make this process transparent and open so that we know what this process is costing.  May 30, 2006 It is good to look back on some watchdog articles which still apply. This week we were witness to the antics of the City council as they argued about which piece of pork they would get. Here are two comments from a Commercial Appeal editorial. "In my district, it looks like they cut everything out," Councilman Edmund Ford said. "We need to find some money -- I don't care where you get it from." Councilman Joe Brown, another of the malcontents, suggested that certain neighborhoods in his district were being targeted for cutbacks. Here are two comments from John Malmo, a lifelong Memphis resident and business leader. • Memphis is in dire financial condition. The primary reason is because all city council members are elected by district. No longer does any council member have to run city-wide. No longer does any councilman or woman have to answer to the entire city. • So we’ve had a couple decades of pork barrel spending. This year you get a community center, and I get a swimming pool. Next year your district gets a golf course, and I get a community center. That’s why the city’s so deep in debt. That’s why your taxes keep going up. That’s why people are fleeing Memphis. Here is a January 17, 2006 article concerning the results of this pork barrel attitude spending and budgeting. Add to these two, the recent closing of the Davy Crockett golf course. January 17, 2006 In view of the Mayor saying that the budget deficit of the last three years was an aberration, I decided to go out and look at two projects that the pork loving City Council did in the last few years, the Whitehaven golf course and the Riverside golf course. I have reprinted below an earlier article posted on the park department portion of this website along with the pictures taken last Friday. Both of these courses are closed and not likely to reopen and we have $6 million dollars down the drain due to the City Council, the Mayor and particularly Tajuan Stout Mitchell and Edmund Ford. City Council Pork Barrel Since no city council seats are elected city-wide any more, each council member concerns himself/herself primarily with what is good for the district in which each is elected. It makes it easier for them to get re-elected. As a result, council members divvy up pork barrel projects for each one’s district with little regard to real city needs. Here are some recent examples of poor use of taxpayer money to benefit individual council members. • Whitehaven Golf Center $4 million for a golf course nobody will play plus $700,000 a year to maintain it. When the city council eliminated the Memphis Park Commission they said it was because the citizen-board disregarded the council priority list for park projects. One such project was the board’s refusal to rebuild the recently purchased Whitehaven Country Club property into a city golf course, as desired by council woman Tajuan Stout Mitchell. The board refused to do so because the $200,000 master plan for Memphis parks submitted by the park board (and approved earlier by the city council) called for that property to be turned into a multi-use, neighborhood park to replace McKellar Park, which had been sold to the airport authority. Outside experts who prepared the master plan recommended against any new city-owned golf facilities. The council approved the golf center in Ms. Mitchell’s district and allocated more than $4 million for a nine-hole golf course and community building. The parks division has included $700,000 in next year’s operating budget for maintenance and operation of the facility. After revenue from operations, this new center should place an additional half-million dollars a year burden on the city’s operating budget. When one former councilman was asked why it was approved, he answered, “Oh, we just had to give Tajuan her four million dollars.” • Riverside Golf Clubhouse $1.5 million for a “Taj Mahal” at a little-played golf facility After Mitchell got “her $4 million” for Whitehaven Golf Center, Councilman Edmund Ford then demanded a new clubhouse for Riverside Golf Course in his district, and the council, of course, approved. A new $1.5 million, 5,000-square-foot club house and snack bar will open soon at Riverside.That is more than twice the size of the clubhouse at the 18-hole golf course of the most expensive private country club in Memphis. Maintenance and operating costs, which already exceed revenue at Riverside, will now go up annually for taxpayers.  May 25, 2006 As we approach Memorial day it is a good time to sit back and think about what is going on in the City of Memphis. • The City of Memphis is in bad financial shape with the bond ratings being lowered which raises our costs for capital improvement projects. • The City Council is going over the budget for 2007 and is fighting over park budgets but ignoring the funding of GASB 43 and 45 requirements choosing to put it off until after elections. • The only thing that is in relatively good financial shape is the MLGW. As of November 2005 they were sitting on $236 million in unrestricted cash and cash equivalents as shown below. To date they have not published the final 2005 financial report after almost 150 days from the end of the year. But you have to ask yourself why are they in such good shape? The obvious answer is that they are a monopoly and they can charge whatever they and the City Council choose. They always look good in their statements because they have ghost positions in their budget which they do not fill and therefore they come in under budget. If they make a mistake in gas purchases, they simply pass the mistake along in their purchased gas adjustment (PGA). According to the law they are supposed to operate at a break even position with any profits returned to the rate payers in lower rates. However at the end of November 2005, they showed an increase in net working capital in the electric division of $41 million, in the gas division of $15 million and in the water division of $3.3 million. Their unrestricted cash went from $126 million to $236 million. It is no wonder why Mayor Herenton has his eyes on the honeypot. He wants the honey. Click here to see the financial position of the MLGW at the end of November 2005. They have yet to publish their 2005 financial report and have never put on the website their annual budgets which the City and the County do. Why? May 22, 2006 In looking through the 2007 proposed budget, we looked to see if there was any money to meet the above standards which are required during this budget year. Here is the explanation and schedule for the implementation of these federal standards. From watchdog which we posted some time ago, here are the standards. The Government Accounting Standards Board (GASB) issued Statement No. 43 of the GASB (GASB 43) entitled "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans" in April, 2004. GASB issued GASB 45 entitled "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions" in June, 2004. GASB 43/45 Overview GASB 43/45 is the governmental sector counterpart of FAS 106. GASB has determined that “Other Post-Employment Benefits (OPEB) is accruing cost, similar to pensions that should be reflected in a governmental unit’s financial statements. Retiree health care benefits represent the largest component of OPEB and when promised in the form of a defined benefit , OPEB includes post employment health care benefits. According to a 1998 GFOA Study, the vast majority of state and local governments provide some form of retiree health care benefits. Governments with over 100 million in annual revenues are required to implement GASB 43 for the fiscal years beginning after December 15, 2005, and for governments with annual revenues of 10-100 million the deadline is December 15, 2006. GASB 45 must be implemented one year later. GASB 43: Describes financial reporting for OPEB Plans that are pre-funded or administered through a separate trust. In brief, the plan needs to calculate the Annual Required Contribution (ARC) and include a schedule in the financial report that shows whether or not it is receiving contributions at that level. GASB 45: Describes financial reporting for sponsors of OPEB Plans. In brief, the sponsor needs to report a record of the cumulative under funding or over funding with respect to the ARC in its financial statements. Governments that do not follow GASB standards will have this noted in the auditor’s opinion that is included with their annual financial reports. Impact of GASB 43/45 Of the governments that provide retiree health care benefits, the financial impact of GASB 43/45 is likely to be significant. No longer will a government entity be able to fund only the current year’s cost for retiree coverage without causing a negative effect on their financial statements. Bond rating agencies have already indicated that attention will be paid to the mismatch between liabilities and assets. This comes at a time when many local governments are experiencing difficulty in retaining their ratings. Few government employers have calculated their OPEB costs and have yet to determine the impact of GASB 43/45 on their financial operations. For many, the unfunded annual required contribution will pose additional stress for already strained budgets. The advent of GASB 43/45 will force government employers to re-evaluate how they are reserving, and more importantly, how they are funding their OPEB liabilities. Although the financial impact of GASB 43/45 will be a gradual one, advanced funding of retiree health care benefits will become critical in the future. Astute issuers will want to be in front of this curve. The purpose of GASB 43 and GASB 45 is to require the accrual of liabilities of other postemployment benefits (OPEB) generally over the working career of plan members rather than on a pay-as-you-go basis which is the current practice for most government sponsored plans. The purpose of GASB 45 is to require the accrual of the OPEB expense over the same period of time. Apparently the City of Memphis budget 2006 and 2007 did not account for this increased liability. They should be including money in the budget to account for the increased post retirement health care benefits rather than just the actual projected annual costs? If they do not start putting money aside to cover this future liability then they are violating the law and building in a future train wreck just as many other cities around the county. Click below to read a recent article from USA today and look at the example of Duluth versus Minneapolis. It is scary. Click here to read the USA Today article concerning the cost of future health care benefits for public employees. Also read a local very forward looking warning article by Andy Meek in the February 3, 2006 issue of the Daily News. Click here to read Andy Meek's article. The past MLGW administration did recognize this future liability and in 1995 set up the MLGW TRUST FOR RETIREE MEDICAL AND LIFE INSURANCE BENEFITS with a $48 million dollar fund. Watchdog posted this information in the past. Whether this is enough to cover future liabilities is for actuaries to figure out. However, the City of Memphis and the MLGW are not doing anything about this requirement. Click below to see what the City and the MLGW say about this subject. Note that the MLGW still has not published their 2005 annual financial report 140 days after the end of the 2005 year. Click here to see what the MLGW says about this situation. Click here to see what the City of Memphis says about this situation. Could it be because there is an election coming up in August 2006 and October 2007 and they do not want this information to come out sooner than necessary. The schedule clearly states "Governments with over 100 million in annual revenues are required to implement GASB 43 for the fiscal years beginning after December 15, 2005". May 16, 2006 In the 2006 City of Memphis CIP budget there was the below listed item for a $700,000 expenditure for imaging technology. Watchdog is all for this expenditure and it was in fact bought as shown below in City Council minutes dated August 2, 2005, item 19. This will allow many if not all paper records and computer records to be shared with the various divisions of local government. ALSO IT WILL ALLOW THIS INFORMATION TO BE SHARED WITH THE PEOPLE WHO PAID THIS $700,000, THE TAXPAYERS. The Tennessee open records laws are good but they have a defect. It does not require the information to be furnished in an electronic form. In most cases the information comes off a computer and is printed out and then given to the person requesting the information. That person has to come to the office and review the material. He then can have copies at generally 25 cents per copy. This is wasteful of the public servants time and the requester’s time. This information could have been sent in an email which would save both parties time and effort. Why do they not do this? The reason in most cases is that the public servants want to discourage open records requests. I will give you a recent example which shows how idiotic this process is. Watchdog asked the MLGW for a list of donation and contributions made to various organizations and events such as the Black Mayors Conference. When I showed up at the MLGW headquarters and went through security I went to a conference room with the person designated as the Coordinator of Access to Public Records. However for the first time there was another person there, Mr. Anderson Williams, executive analyst, and he sat there and read a book while I went through a large stack of documents picking out some that I wanted at 25 cents per copy. It took me one hour to decide what I wanted and this cost the MLGW one hour of Anderson Williams time at a rate of about $78/hour including benefits plus the time of the coordinator. And all of this could have been done electronically. The point of all this is that if a reform group of candidates are elected to the charter commission on August 3 of this year, then hopefully open records reform will be part of their agenda for proposed City of Memphis Charter changes. Click here to see what you as a taxpayer spent $700,000 on and then they won't even post the minutes of the City Council meetings on the City website. Click here to see the minutes of the City Council meeting (item 18) where they agreed to spend $700,000 on an imaging system and yet they do not even publish on their website the minutes of this meeting. May 10, 2006 Watchdog has sent the following open records letter to the Mid-South Minority Business Council. April 28, 2006 Mr. Luke Yancy III President & Chief Executive Officer Mid-South Minority Business Council 158 Madison Avenue, Suite 300 Memphis, TN 38103 Dear Mr. Yancey, Since the Mid-South Minority Business Council receives public rate payer and tax payer monies and as a taxpayer of the City of Memphis and Shelby County I would like to inspect the municipal documents and records in accordance with the Tennessee Open Records Law that contain the following specific information. 1. The records and documents that show the names, yearly salaries, birth dates, job titles, years of completed creditable service towards retirement for all employees of the Mid-South Minority Business Council including the Board Members. 2. The records and documents that show which of the above employees listed in item 1 receive car allowances and which receive cell phone services and the cost of car allowances and cell phone services (whether paid for by Memphis or Shelby County or by some third party other than the employee) for each person who receive these benefits. 3. The records and documents that show the benefits and perks, including life and medical insurance, that you and the employees and board members receive. 4. The records and documents that show the operating budget for the Mid-South Minority Business Council for the fiscal years 2004 and 2005. 5. The records and documents that show all legal fees paid for the above fiscal years showing who they were paid to and the purpose of the legal expense. 6. The records and documents that show how companies apply for certification, and that show for 2004 and 2005 those that applied and those that were approved and those that were not approved. Also I want to see the list of those currently approved for minority business participation. I trust that you will inform promptly whatever department and personnel are necessary to make these documents ready for my inspection. In accordance with the open records laws I may want copies of some or all of the documents after inspection. Since I assume also that the documents containing the information requested should be available readily in file or on a computer, I should like to inspect the documents on Monday, May 8, 2006 at a time on that date at your convenience. If you need additional information or have questions about this request, I am available during working hours at 754-0699. Sincerely yours, We received the following reply by courier within a few days.  May 18, 2006 Watchdog has become interested in this subject since the Mid-South Minority Business Council has claimed that they are not subject to the Tennessee Open Records laws even though they have received substantial public money as pointed out previously. Also they are sitting on over half a million dollars in cash as per their 990 tax report previously published on this website. We have asked for a lot of information on minority contracting from the City and the MLGW but to date we have not received any information per our requests. What are the rules for Minority contracting? If you will click below, you will see the details of the M/WBE (Minority and Women Business Enterprises) City Code from the City of Memphis Website. Click here to see the rules for the City Ordinance on Minority and women business enterprise procurement programs for the City's website. If you will go to page 6 you will see the initial annual M/WBE goals and the statement that “On individual contracts or projects, there is no requirement that the above annual M/WBE goals be met. Also on page 9, section (b) (1) [Regulations on Brokering Services] M/WBEs are required to perform a commercially useful function on contracts let or made pursuant to this chapter. Also in section (3), it states that if a M/WBE subcontracts 50% or more of the work, the M/WBE shall be presumed not to be performing a commercially useful function. Watchdog has been informed, for instance, that MLGW used to buy computers direct from Dell and Gateway in the past but that now there is a company in between these suppliers who makes a commission on these purchases. Watchdog has asked for information on these purchases but as of this date has not received any information. Two additional points. Click below and hear the City’s Chief Information Officer, Darryl D. Anderson, talk about his program and also about the Mayor’s requirement that 30% of procurement be minority purchases. The video piece is from the Oracle website.What watchdog wants to know is the details of this procurement and wants the process to be open and transparent and to know what this requirement is costing the taxpayers and who specifically is getting the benefits. Then we can judge whether the goals as stated in the City ordinance are being achieved. Also click below to see a posting from a Mr. Irv Brownstein posted on the Oracle Public Sector ROI (Return on Investment) IT Toolbox Groups where he apparently is asking for information on how to fulfill a request by the City of Memphis to determine their return on investment. Remember that the City of Memphis has $6.25 million in their 2007 CIP budget for the implementation of Phase III of the Oracle software. Also remember that Darryl D. Anderson is being paid $123,000 salary, the second highest paid appointee next to Keith McGee and a deputy CIO (Rodney Crenshaw) makes $94,000. If these two are qualified, why do they need to job out work that they should be able to do themselves. Are they not qualified? The City Council needs to be asking questions about Oracle and the IT department. Click here to see a posting from a Mr. Irv Brownstein posted on the Oracle Public Sector ROI (Return on Investment) IT Toolbox Groups Click here to read about Mr. Brownstein who apparently is working for the City of Memphis IT department. Click here to hear the City of Memphis policy concerning minority contracting. Through previous open records requests to the MLGW, watchdog has the following invoices (click below)showing that $75,000 had been paid to MMBC using taxpayer and ratepayer money. The Tennessee open records laws are quite clear on this subject that any organization receiving public money is subject to the sunshine laws. Also we show below the IRS form 990 (Return of Organization Exempt from Income Tax) for 2004 for the MMBC. In it you will see on page 2 the compensation of the officers and directors, salaries and other benefits and on page 3 the net assets of $684,301 (cash and cash equivalents) which increased by $59,318 in 2004. Click here to see the payments to MMBC from MLGW with rate payer money. Click here to see the IRS form 990 for 2004 for MMBC. Now watchdog has no objection to the stated purpose of minority contract assistance to help previously discriminated minority and women firms come up to speed in learning business practices and becoming able to compete in the business world for both public and private business contracts. What watchdog does object to is the lack of transparency and openness in the approval of certified minority and women firms and the contract bid process. The taxpayers and ratepayers have a right to know what this program for minority and women firm aid costs and to oversee the bid process to assure that all minority and women firms are treated fairly. Also they have a right to know the details of the successful bids, the names and associations of the successful bidders and the names and associations of the losing bidders. Also the names of the certified minority and women firms should be made public and also the names of those applicants for certified and women firms who were not approved as well as those firms that have graduated from the program and put on an independent basis. As an example of this hidden process, we show below a copy of an ACS (Affiliated Computer Services) report on Minority/Women Business Enterprise Participation for only the one month of January 2006. You can see from the scale of the money spent for this one month that we are talking about big numbers. Also take note of some familiar names and companies. • Integrate Technologies-Reginald French • Thomas Consultants-Darrell K. Thomas • Mitchell Technology Group-Marvell Mitchell • Ewing Moving Service-Charles Ewing • The City's phone bill and cellular phone bill are paid by ACS. Click here to see the ACS January 06 Summary Minority/Women Business Enterprise Participation Detail Report. In addition to asking MMBC to open its records, watchdog is asking the City of Memphis and the MLGW for information on these various contracts which were let under this minority contract arrangement. As we understand the rules, the Mayor has the right to give professional contracts without bids and without City Council approval. Therefore, the $1,074,689.40 in January 2006 should have been competitively bid since they were for non-professional services and goods. The balance for January ($124,711.00) is professional services which the Mayor can give out as he sees fit. We really do not know if these non-professional contracts were bid publicly with public requests for proposals but we feel the public has a right to know exactly what is going on and what is the bid and award process for these millions of tax and rate dollars being spent without public transparency. Watchdog intends to keep digging and make this process transparent, fair and open. May 5, 2006 I recently sent an open records request to the Shelby County Election Commission and got a reply fairly promptly. I must admit that dealing with Shelby County on open records request is much easier and nicer than MLGW. I requested salary, pension and benefit information and also the operating budget, legal expenses and contract information. This is basic information that should be posted for all government units but is not. There are several interesting things shown below. • The election commission budget was $3.03 M in 2003 and is projected to be $3.79 M in 2007. It varies with the number of elections in the budget cycle. • Monice Hagler Tate does the legal work for the election commission. • Two contracts with the election commission were interesting. One was with Watkins & Uiberall, PLLC and Banks, Finley, White & Co. for the examination and tabulation of votes for elections held in FY 05/06. This contract was for $49,000. • The other contract was for Small Planet Works, Inc run by Janice A. Banks, President and CEO. The scope of the work for $24,000 is shown below. • The salaries and pension dates are shown below. Benefits include life and medical insurance. The board members also receive life and medical insurance and they along with the employees pay 30% of the medical premiums. All five members of the board have life insurance but only O. C. Pleasant and Richard Holden have medical coverage. You have to ask yourself if our election process was well served by these two vendors in retrospect with the actual vetting, voting and verification problems we have had iin recent elections. Click here to see salaries and pension information on election commission staff and board. Click here to see waltkins uiberall invoice for election examinaion and tabulation of votes. Click here to see small planet's bid proposal for work at the election commission. May 2, 2006 Ah, there you are hiding in the City Attorney’s budget. A good friend of watchdog has been searching the 2007 Herenton budget to find out where the disastrous overpriced unnecessary Linebarger contract has been hidden and he thinks he has found it in the City Attorney’s 2007 budget. Remember this is the contract that pays 20% commission for the collection of unpaid property taxes rather than paying Bob Patterson 2% to do the same thing. Here is his analysis. After reviewing the 2007 proposed budgets for General Fund Revenues, the Finance Division and the City Attorney's office, it became very apparent the city is planning to continue the waste of taxpayer funds by utilizing the very high priced services of the Linebarger law firm to collect delinquent taxes. You can infer from the information shown below, obtained from the 2007 city Budget Proposals and the 2005 audited Financial report, that Linebarger does not perform as well as the "in house" collection effort the city utilized up till April 2004. The General Fund Revenue Projections for 2007 are for less delinquent tax collections than occurred in 2005, which was less than was collected in 2004 ... in spite of an increased tax rate! These reduced collections for 2007 are projected to cost an additional ~$6.4MM in "Linebarger" fees (see comment below). Looks to me, using Linebarger is actually costing the city money as opposed to how the collection operation was handled "pre Linebarger". HUH ... go figure??? Makes one wonder why there is this insistence by the mayor to continue using the Linebarger firm to collect delinquent taxes in spite of all the evidence indicating it is a very bad deal for the taxpayers. It's also a very bad deal for the "delinquent" taxpayers, as Linebarger dings them with a 20% collection fee as opposed to the pre Linebarger 10% collection fee assessment. Do not forget, the County Assessor has offered to collect these taxes for a small fraction of what Linebarger is charging. It should also be noted that there has been no staff reduction in the city Treasurer's Collection department as a result of using the Linebarger law firm as the collection agent??? Looks like the only winner in this situation is the Linebarger law firm, I think.   Take a look above. This is from the City of Memphis own website. It is absolutely amazing that the city Finance Department would include this nonsense in the 2007 Annual Budget. Do they not look at this stuff? The Court Clerk is showing a reduction in fines collected of $4.1MM from the 2005 actual collections. The Court Clerk had a 2006 Budget for fine collections of $10.3MM and is now forecasting collections of $7.5MM for 2006. All this going on while he is stating he is increasing the percentage collected from 70% to 75%. ... Also, he is projecting an increase in the number of traffic citations entered!!! In addition he is also projecting adding 11 employees to produce much less in results. Duh??? Will someone on the City Council please question some of these ridiculous numbers .... please! This is a classic example of incompetence in your Finance Division! I'm afraid to look at another department but I will. (PUBLIC WORKS DIVISION) Just as expected, the new Drainage Tax (in essence a property tax increase) is being used to reduce General fund expenses. $14MM increase in property taxes to reward the ongoing inefficiency of your city government. Looks like more cronies are headed for the city payrolls! Real easy to balance a budget when you just keep increasing taxes! As you can see below, again information taken from the City website, expenses that traditionally have been in the Public Works Division of the General Fund are now in the Storm Water Enterprise Fund ($10MM). In addition to that ... they have used $2.3MM of those revenues to contribute to the Debt Service Fund and are ending up with $1.7MM in "profits" (change in net assets). By the way, they couldn't even get the amount correct in the Debt Service Fund ... they only show $2.0MM being transferred in. Wonder if any of the financial "whiz kids" has found the $300k problem yet??? What a sham, or shell game, if you will! Just for a laugh ... please notice the "head count" is reduced by 68 employees in Public Works and increased by 130 employees in the Storm Water Enterprise Fund. I have to wonder what that is all about???? Next question, where did they hide the Linebarger deal in the budget. Also, what is the total IT cost after all the no bid contracts with friends of the Mayor? Please stay tuned for later in the week. We have the answers.  April 28, 2006 In the last two days there have been articles and an editorial about the shameful lobbying by the City Administration to defeat Senator Cohen’s bill to require a citizen referendum (both City and County voters) before MLGW could be sold. The Herenton Administration as usual speaks with forked tongue (they are good at that) and Sara Hall, the City Attorney, had to cook up a lame excuse that they simply wanted to preserve their independence and freedom of action although (speaking with the left fork) that they have no intention to sell MLGW. Well watchdog has found billing of $72,000 and a contract for lobbying that is being partially paid for by the very same MLGW rate payers. Click below to see the contract and bills for REJ & Associates (Rufus Jones) and Farris, Mathews, Branan, Bobango Hellen & Dunlap, PLC. This brings watchdog back to the honeypot that is the MLGW and why big bear Herenton is sniffing around. MLGW is sitting on(as of November 30, 2005) $236 million dollars in unrestricted cash and cash equivalents. Does this explain why Joe Lee and Mayor Herenton don’t want the voters and ratepayers in Memphis and Shelby County to have a say in whether they can sell MLGW in the future? There is a solution to this dilemma. The charter commission could propose a mandatory referendum before the sale of MLGW as part of proposed charter commission changes. However, people who want this provision need to be elected to the charter commission on August 3, 2006 and that excludes current politicians and people closely connected to the Herenton Administration. Click here to see how your MLGW rate money is being used to fight the senate bill that would give you the right to a referendum on whether to sell MLGW.  DID YOU SEE ANY OF THESE EXPENSES ON YOUR UTILITY BILL INCLUDING THE $20,000 FOR THE NATIONAL CONFERENCE OF BLACK MAYORS?
April 26, 2006 Watchdog sent an open records request to the MLGW on February 8, 2006 asking for the following information. 1. The records and documents that show the MLGW policy regarding contributions and donations showing what limits and types of contributions can be made without board approval and also with board approval. 2. The records and documents that show all checks payable to the City of Memphis, the Mayor’s office and/or City employees, charitable/Non-Profit organizations or to any party in support of a fundraiser, civic group or convention for the calendar years 2004, 2005 and 2006. You should provide name of payee, amount of payment and reasons for payment. Finally after more than two months I was told that the information was available and at 10 AM on April 21, I came to the MLGW building on Main and was presented with a huge stack of documents to inspect. As to the first request above, see the policy document below. Remember that the law governing Memphis public utilities says that “Any surplus remaining, after establishment of proper reserves, if any, shall be devoted solely to the reduction of rates.” Here are some interesting examples of where some of your rate money is going rather than for rate reduction for ratepayers who are struggling with their utility bills. • $20,000 for the National Conference of Black Mayors meeting in April 2006. • $422 paid to then MLGW Board member, Franketta Guinn, for membership in the YMCA of Memphis under the MLGW Healthy Executive program. • $7000 to the Black Business Directory • $25,000 to the Mid-South Minority Business Council after TVA cut their funding. This was approved by the MLGW board. • $2,500 for the Black Business Association • $13,000 Sisterhood Showcase sponsorship, check went to Birchett & Associates, Inc. • $6,500 for 2005 Freedom Award to the National Civil Rights Museum • $15,600 to Birchett & Associates, Inc for Diversity Issue in Grace Magazine • $48,000 to the City of Memphis for Lobbying Services under City Contract #20860. Specifically the contract calls for MLGW to reimburse the City the amount of $6,000 monthly for the services of REJ & Associates and in the amount of $2,000 monthly for the services of Farris, Mathews, Branan, Bobango Hellen & Dunlap, PLC. • $1,000 for the American Association of Blacks in Energy • $7,500 to AutoZone Liberty Bowl for Ad space to be used for “Wise Use of Energy” plus 250 employee tickets. • $5,500 Latino Memphis Fiesta sponsor • $3,000 to Playhouse on the Square for sponsorship of Peter Pan • $29,500 to the Corporate Executive Board for 2004 membership services for the procurement strategy council • $1,000 for the African-American Pastors Consortium, Inc. • $4,000 to the Memphis Area Home Builders Association • $1,000 to the LeMoyne-Owen Gala • $8,000 to the Memphis Business Journal for the Small Business Awards Banquet • $6,777.66 to the Chamber of Commerce for one month’s expenses for Economic Development Programs • $1407.56 to the City of Memphis for President Lee for July, August and September 2004 for Nextel charges including Blackberry email and web • $10,000 to Weekend Academy Inc • $7,500 for The 100 Black Men of Memphis, Inc • $1,000 Anointed Hearts Ministries, Minister Melvin Norman, CEO The above is just a sampling of monies that are being spent from the unrestricted cash that the MLGW is sitting on. Click here to see the $20,000 bill you are paying for in your utility bill. Click here to see the rules that the MLGW set up to allow contributions from MLGW rather than reduction of rates. April 24, 2006 If you want a good example of what is interesting about the Herenton Administration, you need to go no further than the contract awards given to companies represented by close associates of the Mayor, Reginald French and Darrell K. Thomas. By the way, both are running for public office in the August 3, 2006 elections, French for the job of Sheriff and Thomas for the Charter Commission. While all these contracts and dealings may be perfectly legal, the taxpayers need to know the facts of the cases. These kinds of contracts need to be posted on the internet before they are bid, then publicly bid, bids opened in public and awards made to the best and lowest without fear or favor. The charter commission, with the proper people elected, could institute just such a provision insuring public integrity. It all started in the fall of 2000 when the City decided to outsource their computer and telecommunications services. This could involve as much as $70 million or more so naturally the friends of the Mayor got interested. There were three companies chosen from an initial field of 17 which were • ACS (Affiliated Computer Services, Dallas Texas) • EDS (Electronic Data Systems, Dallas, Texas) • SCT (Systems and Computer Technology, Malvern, Pa.) The length of the contract was estimated to be from 5 to 7 years by Roland McElrath, then Director of Division of Finance and Administration. The story twists and turns due to a number of factors. • SCB Computer Technology, a Germantown Company, had a $468,000 contract to help choose the outsourcing firm but was involved in various legal problems such as its own admission of overstating earnings and lawsuits alleging stockholders were defrauded. • A new evaluation committee was selected including McElrath, CAO Rick Masson (now chairman of the MLGW board and the Riverfront Development Board), City Councilman Tom Marshall and several other current and former employees of the Mayor. Click here to read all about this in a Memphis Flyer article In late 2000, just prior to the City awarding the IT outsourcing contract, Reginald French purchased Associated Softworks (ASW) from Ronald Jung for roughly $100,000 and Jung is now suing French claiming French funneled company money to start a new IT firm called Integrate Technologies. • The City awarded Systems and Computer Technology (SCT) an IT outsourcing contract for $41 million in November 2000, which would be purchased by ACS six months later. • Four months after the contract award to SCT, ASW was awarded a subcontract to the City through SCT. Since then Associated Softworks has been changed to Integrate Technologies. • Reginald French’s company (ASW) landed the subcontract only six months after he originally purchased the company, not bad for a former City employee with little computer training. • Integrate Technologies currently does “professional services” business with the City of Memphis through ACS. Professional service contracts under the city procurement policy is not required to be bid. Another interesting fact is that recently, ACS was awarded a lucrative ambulance billing contract with the City, however the Company is currently under investigation for bribery charges regarding a traffic camera system in Canada. Click here to read the traffic camera story. While there have been several figures thrown out as to how much the City is truly spending on this contract, Watchdog has discovered an article where Harvey Braswell, ACS’s president of government outsourcing stated the contract is worth about $16 million annually over a period of 7 years for a grand total of $112 million. That is $50 million more than the most liberal estimate by the City. This was shortly after ACS purchased SCT in mid 2001. Click here to read the article. Another close associate of the Mayor is Darrell K. Thomas. Thomas, who is running for the Charter Commission, was recently the beneficiary of several contracts with the MLGW and the MLGW associated Memphis Networx. Click here to read about the $1.4 million MLGW contract for Thomas,item 21. Click here to read about the $1.9 million MLGW contract for Thomas, item 22. Click here to read about Thomas and MLGW associated Networx and Nextel products. Click here to read about the Thomas contract worth $1 million with Shelby County, item 11. These associations and dealings raise lots of questions and the voting public and the taxpaying public should be very wary of all these interconnected relationships where friends of the Mayor get very lucrative contracts. Our advice is hold on to your wallets and purses. April 19, 2006 Recently the Commercial Appeal has printed several article and editorials about the importance of open records. Watchdog is appreciative of the Commercial Appeal and their uncompromising stand for open records. However in an editorial today, they stated “So here's the rule: All public records must be available for inspection during normal business hours, unless the documents are exempt from open records rules.” Watchdog has filed a lot of open records requests with the City, the County, the MLGW, the Memphis City Schools and lots of boards. We have yet to walk in unannounced and say “I want to see all your records concerning how much you spent on an Oracle contract and was it competitively bid and who benefited and how much did they profit on the deal and by the way, I want to see it right now.” Perhaps that will work and I would like to try it soon but I want to have the writer of this editorial with me when I go. Please give me a call and we can try it together. In the meantime I am proceeding with the old method, writing open records letters and following up and when they refuse to answer, I file a suit. It may be the old fashion method and cumbersome but it seems to work against a political establishment that hates open records laws. I have listed below several open records requests that have yet to be answered. The one dated February 4, 2006 to the MLGW is particularly old and I am preparing court papers to file suit unless they answer this week. I admit it is hard work but someone has to do it. I have gotten lots of public response and help and for this help I am grateful but I could use some more. Click here to see what the MLGW does not want you to know about contributions with your rate money. Click here to see what the MLGW does not want you to know about contracts with your rate money. Click here to see what the MLGW does not want you to know about contracts with your rate money. Click here to see what it takes to get an answer to an open records letter to the Shelby County Election Commission.  April 17, 2006 Welcome to April 17, tax day. There is a story this morning in the CA about an argument between the Shelby County School System and the Shelby County Board of Commissioners. They are arguing about who should pay for a new County School to the tune of over $10 million dollars. As we taxpayers struggle to pay our Federal and State taxes we need to consider how to get out from under our mountain of local debt. Consider that the CA and Mayor Wharton have been saying that the county debt is $1.7 BILLION dollars. In fact it is $2.09 BILLION as of February 28, 2006. The City of Memphis debt is over $1 BILLION. Consider that this is over $3 BILLION for Memphis and Shelby County. The long term debt for the state of Tennessee is $1.2 BILLION. Enough to make you cry. What must be done? 1) Bring spending under control by changing the City Charter first and then the County Charter later. 2) Work out a school financing plan that only costs the taxpayers $1 for each $1 spent on a new County school, not an extra $3 to the City Schools for each $1 spent on new County Schools. This is the main factor in the huge county debt. 3) Independent audits of major expenditures as oversight and public exposure is lacking in both the City and the County. Many other steps need to be taken to bring this huge debt under control. Click below to see the County debt problem. Click here to see how much you owe as a resident of Shelby County. APRIL 13, 2006 As tax day approaches, it is a good time to consider your income and expenses. One of those expenses that you cannot take off your tax return is your MLGW bills. A friend of watchdog, a CPA, recently looked at his utility bills and here are his comments. I took a look at the gas costs included on my utility bills for 6 months. I used December 2004 as my base to look at the % increase in just the cost of the purchased gas for January & December of 2005, and January, February & March of 2006. I used the MLGW methodology worksheet, you procured, as the basis for verifying my bills. I then fetched the Henry Hub gas index for that period (that's what the Federal Reserve uses) and computed their % price increases for the same months, still using December 2004 as the base month. They publish an average of prices for each month ... to be fair (due to MLGW billing cycles), I averaged their months involved, eg - Nov & Dec for "my December". You can see what I did on the worksheet below. The website for the Henry Gas Price index is shown next. http://research.stlouisfed.org/fred2/data/GASPRICE.txt There appears to be no relationship between what MLGW bills as the "raw gas costs" and what is considered to be the "standard index". Look at my worksheet and see if you don't think something is amiss. MLGW is way "off the scale" in the % changes, as compared to an "industry standard index"???? Always to the upside???? Either they are gaming the ratepayers, or, just as bad, they are terribly incompetent purchasers of natural gas. I wonder which applies? Looks to me like it all started when they implemented their new "base gas cost" in Dec / Jan of 2005. They keep adding on to that very high number. Bear in mind, I'm not looking at absolutes ... just the percentage increase over a base. You have to wonder how much the lack of a "commodity specialist" is costing us ratepayers???? Nice to have monopoly pricing power, isn't it?   April 10, 2006 Watchdog has been reading the financial statements of the MLGW up to November 2005 (the latest they have published) and we find the following facts as shown above as taken from their financial statements. • The unrestricted cash has increased from $126 million in December 2004 to $236 million in November 2005. • The net working capital has increased from $140 million to $199 million. Net working capital is current assets minus current liabilities. • The retained earnings has increased by $85 million. Remember that the MLGW is a non profit public utility and a monopoly and should be operating as close to zero profit as is possible. In reviewing the MLGW financial statements from 2001 through November 2005, the MLGW has overpaid its PILOT payments to the City and County by over 12 million dollars in 2001 and another 12 million dollars in 2004, taking the money from the reserves of the MLGW. The financial statements state that these payments are in accordance with the 1987 Gas Tax Equivalent law and that law states that the payments are made for each year only from the new operating income of the gas division. Please note two important points in the law. • No public works shall operate for gain or profit or as a source of revenue to a government entity, but shall operate solely for the use and benefit of the consumers. • Any surplus remaining after establishment of proper reserves, if any, shall be devoted solely to the reduction of rates. Click below to see the facts on this overpayment and the supporting law. The MLGW needs to answer these questions. Click here to read how the MLGW overpaid their PILOT payments to the City and County in 2001 and 2004 to the tune of $24 million dollars, taking the money from the MLGW reserves.  April 5, 2006 We have been pursuing an investigation of why the City of Memphis has not received one cent from John Elkington and Performa Entertainment since 1982 to today. We have received all the financial reports that the City admits to having and they make interesting reading. Shown above is a spreadsheet we made from the various reports. You will see that the net profit went from $170 thousand in 1998 to $343 thousand in 2000. Then starting in 2001 they went from a loss of $68 thousand to a loss of $283 thousand in 2004. In those reports was the introduction of a new expense never before seen in the reports called CAM (we believe this stands for Common Area Maintenance). Also there were large expenses designated as Legal, Salaries, Management Fee, Commissions, Professional Services-Rental and Tenant Improvement Credits. The most interesting anomaly was that the parking profits came out to zero several years in a row during the construction of the FedEx Arena. As taxpayers it makes us furious to see such UNAUDITED reports like this submitted to support the results of operations. The fault lies with the City Administration and their failure to internally an independently audit Mr. Elkington each and every year right down to bank confirmations, account reconciliations and tenant rent confirmations. If we remember correctly, Mr. Joseph Lee, now heading the MLGW, was in the City Audit department for quite a while before becoming the City financial director. One other point. Look who is still making money on this deal (Ricky Wilkins) and look at the 1992 letter on Beale Street shown below. Click here to see the Ricky Wilkins letter and hand written notes about the beale street profit and how it will be used. Click here to see how Ricky Wilkins is still making money on the beale street problems and is being paid with our tax money. Click here to see the unaudited 1998-1999-2000 Performa financial statements that the City of Memphis is accepting. Click here to see the unaudited 2001 Performa financial statements that the City of Memphis is accepting. Click here to see the unaudited 2002 Performa financial statements that the City of Memphis is accepting. Click here to see the unaudited 2003 Performa financial statements that the City of Memphis is accepting. Click here to see the unaudited 2004 Performa financial statements that the City of Memphis is accepting. April 4, 2006 In a recent open records request, we asked for and received information on the salaries and benefits of the part time and full time lawyers working for the Shelby County Attorney’s office. In that request we also asked for the years of creditable service for these attorneys and we finally received the information as shown on the attached file. The attorneys working for Brian Kuhn are designed in the first column as “COATTY”, county attorney. The others work for various divisions of county government. The job title column shows those that are full time and part time. Note that the full time attorneys theoretically work 37.5 hours per week. The last column shows the years of creditable service towards their pensions. There is a national movement to change public pension systems to a defined contribution system and away from a defined benefit system. This is in fairness to the hardworking taxpayers who mostly work in the private sector where a defined benefit system is almost unknown. Some local candidates for the county commission are calling for this change and they are right. We can no longer afford the current system. Click here to see which attorneys are on the county pension system and how many years of creditable service they have. March 31, 2006 In a recent open records request, we asked for information on Shelby County Attorneys, their salaries, retainers, per diem pay (hourly rate), whether they were on the pension system and whether they were receiving health care and other benefits. After some back and forth with Brian Kuhn, we were grudgingly given most of the information. We have posted a spreadsheet below to show what we obtained. Some of it is interesting due to the political connections apparently necessary to get one of these part time jobs while still getting county regular county business. Kathy Kirk is Cleo Kirk's daughter. Cleo Kirk is a sitting county commissioner. Gordon Olswing is in Charlie Perkins' firm. Charles Perkins is a past county commissioner. Dedrick Brittenum replaced Janet Hooks on the City Council and is in the firm with John Farris and John Bobango. Farris and Bobango are prominent representatives of Time Warner and are opposed to competition from Networx at MLGW. Mark Beutelschies is Tommy Hart's son-in-law. Tommy Hart is a former county commissioner. I'll never get the logic of why the county pays part time attorneys on a retainer basis, nor why they give them pension and health care benefits. Do all part time county employees get retirement and health care? Click here to see the full time and part time county attorneys and what they make in salaries and benefits. Click here to see what Shelby County paid to outside attorneys some of whom are part time employees. Click here to see what Shelby County paid to outside attorneys some of whom are part time employees. March 29, 2005 Here is a recent letter to the editor published in the Commercial Appeal. MARCH 20, 2006 From the letters to the editor: Traffic circle isn't an RDC project It seems to have become the trend to assert erroneous information about the Riverfront Development Corporation. A case in point is a recent TV news report about the Mud Island traffic circle. The traffic circle is not an RDC project. It is a project deemed necessary by the City of Memphis to help alleviate an impending traffic problem on Mud Island. The City asked the RDC to oversee construction of the project to help save time and money. The RDC has done both. Second, the RDC has saved the City of Memphis more than $2 million in the past five years. It is not a drain on City funds. It saves the City money by operating and maintaining the riverfront for the same money the City was spending in 1999. Without the RDC, costs to provide basic maintenance of the riverfront parks would explode. RDC also operates Mud Island River Park for the same amount the City did in 1999 -- and eliminated admission fees. Rick C. Masson Chairman, Riverfront Development Corporation Memphis Shown below is the recent Form 990, Return of Organization Exempt From Income Tax, that the Riverfront Development Corporation filed. Look on line 19, page 1 and you will see that the RDC added $2.5 million to their net assets for the year. Also note on page 7 that one of the employees is Dorchelle Spence, wife of Robert Spence, and she makes $90020 plus $13142 in benefits. Her title is RDC Communications Director. Robert Spence is a close associate of Mayor Herenton and has made huge legal fees from the City. Also note on page 17 that Benny Lenderman III made $183,907 plus $17923 in benefits. Enough said in answer to Mr. Masson excep that it looks like the the $2 million he claims the City saved went right into the saving account of RDC. Click here to see what the RDC bank is doing with your tax money. Click here to go to the RDC page and learn what other boondoogles the RDC has cooked up with your tax money. March 27, 2006 Recently I posted a letter from all the Memphis Area Career Center staff complaining about deviant workplace behavior and work ethics of the Executive Director. This was on March 1 of this year. I asked through an open records request for the cost of this program and for a list of the salaries and job titles. I have posted the salaries and job titles below. The cost is startling. For FY2004 it was $7.6 million. For FY2005 it was $6.8 million and for FY2006 it is $8.9 million. In its response, the City pointed out that there is no cost to the city of Memphis for Workforce Investment Network or Memphis Area Career Center as the funding source is the United States Department of Labor. Am I the only person who realizes that this is my tax money as I pay city, county, state and federal taxes. As far as I can see, all this money is doing is providing employment for the bureaucrats listed in the report below. This is the whole problem with programs of this type, Federal, State and Local, THERE IS NO INDEPENDENT OVERSIGHT AND NO CLEAR STANDARD FOR PERFORMANCE IN ORDER TO JUDGE HOW WELL THE MONEY IS BEING SPENT AND WHAT IS THE VALUE OF THE RESULTS. Also, these people are City of Memphis employees and are on the pension system and the health care system. We will be paying for their pensions and health care long after these programs are gone. Click here to see what your tax dollars are paying for. Click here to see the complaint concerning deviant workplace behavior and work ethics of the executive director. March 21, 2006 My name is Joe Saino and I have been active in open records requests in Memphis and Shelby County. After filing a suit in Chancery Court in February of 2005 as a result of a refusal to open the records of the City of Memphis, I have been able to get many records that needed to be reported to the public. I have been regularly reporting the results of these open records requests on memphiswatchdog.org. In my opinion, nothing is more important in keeping politicians and governmental bodies honest than good ethics laws and open records laws. I hope that local and state governments will propose strong ethics laws that apply statewide and also apply to local governments such as Memphis and Shelby County. However politicians hate tough ethics standards and tough sunshine laws. Concerning open records laws I have some proposals based on real world experience that I think should be part of any ethics and open records proposals. a) Local government units and boards should be required to post on the internet the following basic information and be required to keep it up to date. These postings will cut down on the number of open records requests. • Names, job titles, salaries, benefits, job descriptions, pension information such as years of completed pension service. • All contracts and bidding results on those contracts should be posted and payments based on those contracts should be posted. This would include HCD and MHA contracts and personal service contracts. • Audits of governmental units and pension plans should be posted. • Personnel policies, pension rules and job postings should be posted. • Pilots granted should be posted and all active Pilots and dates that they end should be posted. • All studies and outside governmental recommendations should be posted. • All agendas, minutes and ordinances should be posted. b) The person requesting the information should have the option to get the information in an electronic form (on a disc or email) if the documents that are presented to be reviewed came from a computer. If the documents are not in an electronic form, then the cost of the copy should be the same as any office supply shop (currently 6 to 8 cents per copy for an 8-1/2 x 11 black single sided copy) and the governmental unit should not be able to set any price they choose. (They are currently charging 25 cents to 1.25 per copy). They currently refuse to furnish it in an electronic form even though it is obvious that the offered copies come from a computer printout. The disc cost, if offered, should be the raw cost of the disc and not include labor and research. (See a recent email from Brian Kuhn, the Shelby County Attorney to see their attitude concerning this subject). c) Email records are increasingly important and should be made available on a disc with the same cost provision as above. Rules should be set to prevent destruction of email. d) Police records are a problem in Memphis and Shelby County as the police department is very hostile to records requests and require a front end fee before they will do anything. They should be subject to the same rules as any other unit of government. e) The requested records should be provided in a timely manner and this should be made specific with a maximum of one month from the date of request. f) Penalties should be harsh for a refusal to provide the records if the refusal requires the person asking for the records to file suit. It is apparent today that newspapers and TV media do not have the resources to do the research necessary to turn up governmental waste and fraud and it is up to the citizens through strong open records laws to take up the slack and to prevent further Tennessee Waltz type incidents. Governments generally like to operate in darkness. Taxpaying citizens want sunshine and transparency. Click here to read emails back and forth in order to get public records from Shelby County Government and they are one of the best in this regard. March 17, 2006 There is a new hotel and parking garage going in between Beale Street and the FedEx Arena and guess who is in the middle of the deal. You guessed it, John Elkington. And the taxpayers and the City of Memphis still have not received one cent from Performa (Elkington’s company) and we still have not received one complete quarterly or annual report since the original contract (1982) or one cent in revenue from Beale Street. Also no copies of independent audits on Performa. Elkington obviously continues to prosper as shown by these contracts. We post below parts of two contracts covering the hotel and the garage. The hotel contract is between Performa Entertainment Real Estate Inc, a Tennessee corporation (“Performa”), Senate Hotel Partners Memphis, LLC, a Delaware limited liability company (“Senate”), and the City of Memphis, Tennessee (the “City”. Beale Street Development Corporation (“Beale”) joins in this Sublease for the purposes set forth in the contract. The hotel is to be a Westin Hotel. The garage contract is between Performa Entertainment Real Estate, Inc, a Tennessee corporation (“Performa”), Lee’s Landing Garage, LLC, a Tennessee limited liability company (“Garage Owner”), and the City of Memphis, Tennessee (the “City”). We have on file the full contracts on these deals but to recap here are the essential parts. On the Hotel contract, Performa/Elkington will receive a brokerage commission as set forth in the contract in section 68 shown below. They get a cut of the monthly gross sales. On the garage contract Performa/Elkington will receive a Developer’s Fee that is contractual in nature exclusively between Performa/Elkington and the owner of the leasehold interest in the garage. Presumably Elkington will be a developer and co-owner of the garage. All of this flows from the 1982 sublease agreement between Beale Street Development Corporation and Elkington. Some deal for the taxpayers. Also shown below are two interesting documents uncovered by watchdog. One is an internal audit by the City’s internal auditor in 1992. It points out the many failings of BSDC. Nothing was done about these failings. The other document is a 1993 letter from a law firm to the Accounting Department of the City of Memphis and two accounting firms hired by the City of Memphis. Note the hand written memos on the covering letter to Ricky Wilkins. Also note that it includes a financial report dated 12/31/92 showing a profit of $235,000 but still no payment to the City. The only recent financial report we have seen shows a loss after nine months in 2005 after Elkington said that things were going very well on Beale Street. They are going well, for Elkington. Click here to see parts of the terms of the hotel agreement. Click here to see parts of the terms of the garage agreement. Click here to see the internal City of Memphis audit about beale street development corp. Click here to see the Ricky Wilkins letter and hand written notes about the beale street profit and how it will be used. March 13, 2006 As a former member of the MLGW board and a former chairman of the MLGW board I have been following with some trepidation the operation of the MLGW since July 2004 when Joseph Lee replaced Herman Morris at the instigation of Mayor Herenton and the City Council. Joseph Lee was the former director of finance for the City of Memphis and was responsible for the depletion of the reserve fund, the lowering of our bond ratings and for three straight years of unbalanced budgets for the City of Memphis. Since coming to the MLGW we have seen a series of situations involving hiring of cronies of Mayor Herenton without the traditional and long standing posting and hiring procedures which have traditionally allowed the internal promotions to come from currently employed experienced qualified people. This has damaged employee morale as they see patronage employees replacing long time well qualified people. The MLGW is facing a series of problems that will require well qualified people in management and being run by a person who failed at the City of Memphis does not give great confidence for the outlook. Some of the problems need to be mentioned. • The MLGW customer growth in the last five years is less than 1% annually. • The total labor cost have increased 36% over 6 years • The total medical benefit costs have doubled in 6 years • The payments to the city of Memphis for in lieu of tax payment have increase by 54% over 6 years and remember that $2.5 million from the water division is now going to pay for the FedEx arena. Part of the reason they are overpaying PILOTS is that they have paid $24 million more in the last four years than the 1987 law envisions. • MLGW pension costs have increased by 74% over the last six years. • The net write offs for unpaid bills are projected to increase by $5 million dollars this year. MLGW’s plan to overcome these problems is interesting. They plan to reduce vacant positions by 185 from 320. In other words in their budget they have had 320 ghost positions and now they are going to cut them by 185. Why not cut them all? By having the salary of ghost positions in the budget, they hope to make themselves look good when and if they come in under budget. They also are reducing the medical benefit costs by 5% from 80% to 75% paid by the Division when the city and the county are already at 70%. The problems at the MLGW are so severe that only a major reorganization can possibly turn it around. To address huge increases in utility bills we need new management with changes in overhead, salaries and benefits to make the Division more closely resemble a private sector utility company. This can only come about with charter commission changes and a new mayor and city council. March 7, 2006 Recently in looking over my utility bill I noted the charges that are on the bill over and above my electric, gas and water charges. I pulled a bill from my records for January 12, 2005 and compared them to the most recent bill dated February 13, 2006. Here are the results. Non-MLGW charges Sewer charges 2005-$8.80 2006-$6.18 (this is based on volume of water used) Solid Waster Fee 2005-$7.50 2006-$19.00 Mosquito/Rodent Control Fee 2005-Nothing 2006-$0.75 Now the drainage fee is up for a second reading today at the City Council. This is to charge $2.18 per month starting in May and rising over time to $4.02 per month. These fees are in fact property taxes and the question must be asked how much in property taxes do they amount to over and above the property taxes we now pay. Remeber that a property tax increase was voted last year by the City Council. Well the sewer fee brought in $35 million in 2004 and is projected to bring in $50 million in 2006. The garbage fee is projected to bring in $43 million in 2006. We do not have a figure for the mosquito/rodent control fee or the new drainage fee but figure 250,000 households times the fees times 12 months or a least $10 million per year. This is a total of $95 million over and above your property taxes. Your property taxes are projected to bring in $189 million in 2006 to the operating budget, $66.5 million to the capital improvement budget and $85 million to the Memphis City Schools. This is a total of $340.5 million. So these fees add about 28% on average to your property taxes. Surprised? Me too. March 1, 2006 Recently I was sent a copy of a memo from the Memphis Area Career Center Staff that was addressed to just about everybody including Harold Ford Jr., the Memphis City Council, the Mayor and everybody else they could think of. It was a very confusing complaint about the management of WIN/MACC. Confused? Me too. It took me awhile to figure out what WIN/MACC was. Workforce Investment Network/Memphis Area Career Center. I am just getting into this bureaucratic mess but I want to know what it costs and what are the results. It sounds like a typical scheme to create jobs for bureaucrats and cronies but lets give them the benefit of doubt. I will ask for the information in an open records request. In the meantime, look at the complaint shown below and if you can understand what is going on, you are better than I am. And what are we paying these people? • Isaac Garrett, Director Executive/WIN $91,729.04 • Alice Poston, Mgr-Career Ctr Systems/WIN 64,252.24 Listed right next to Mr. Garrett on the City of Memphis salary sheet we obtained earlier last year is Marie Milan, at $91,729.04. She is Director-Executive/YO (youth opportunity) Now we know where some of the workforce development specialists are working. YOUR TAX DOLLARS AT WORK. Here is what their website says. It sounds like remedial services for stuff that should have been taught in our failed school system. The center was established as a result of the Workforce Investment Act of 1998 passed by Congress. Previously, customers wanting services from programs such as Unemployment Insurance, Title1, Job Service, Veteran Services, Adult Basic Education, Vocational Rehab, Department of Human Services, and Title V had to seek those services from several providers at multiple locations. The Memphis Area Career Center integrates the resources and activities of these programs into a streamlined system. The Center is a way of reinventing government services so that employers and job seekers an get better, more comprehensive service in one place, without having to navigate a bureaucratic maze of programs and services. The purpose of MACC is to provide a comprehensive Career Center system that offers a variety of services to individuals and employers throughout the greater Memphis area and Fayette County. Customers who benefit are employers seeking employees and anyone interested in finding a job or upgrading to another job. Click here to see the complaint concerning deviant workplace behavior and work ethics of the executive director. Click here to go to the Memphis Area Career Center website and look at the board. Click here to see the bureaucratic plan to justify this activity. February 21, 2006 I thought that the MLGW policies were bad before Max Williams left but I ascribed that to Joe Lee and his penchant for secrecy. What would you expect from someone who came with his training obtained from City Hall. However, Odell Horton Jr. is now personally taking a hand in the obstruction of the public’s right to know about the company that all of the taxpayers and ratepayers own. I show below an open records request that I sent on December 21, 2005 to the MLGW. On item 3, I asked for the records and documents that shows all legal and other fees paid by MLGW in the case of the TVA electric bonds. The documents should show to whom the fees were paid and the dates of the payments and for what services. His answer lists 1 payment of $24,961,21. Also with the one sheet shown, I received a letter from Mr. Horton saying that was all that was paid. I guess I did not word my request exactly right and he took the opportunity to not tell the full story. However look at the answers obtained by City Councilman E. C. Jones from the MLGW to a very similar request, $8.244 million dollars. I suppose Mr. Horton would contend that the money was not paid directly from the MLGW but as a fee from the bonds. However in a letter dated July 24, 2002, the Memphis Light Gas and Water Division agreed to pay a fee of $7.5 million to J.P. Morgan and more to other participants. Mr. Horton takes every opportunity to tell less than the whole story. Included in the file is a number of interesting letters detailing how the Mayor worked to get a percentage of the pie for his buddies. Read and prepare to vote Willie out of office in 2007. Click here to see my open record request and the answer that was not a forthcoming answer. Click here to see who got the bacon on the mlgw 1.5 billion dollar electric bond issue. February 17, 2006 Here is a statement that I made to the MLGW board yesterday. My name is Joe Saino and I am here to ask some questions and to make some recommendations. Your 2004 financial statement shows that you are sitting on $110 million in unrestricted cash and short term investments. For a company that is supposed to be non profit, this seems like a lot of money and should be cut down by rate reductions and returned to the ratepayers. Also in looking at the 2004 financial statement, on page F-3 you show a loss in the gas division of $7.8 million after a payment to the City of Memphis and other Shelby County cities of $14.5 million. The November 4, 1980 MLGW charter says concerning payments in lieu of taxes that “in no event shall the aforesaid payment to the Municipality for any year exceed one-half of the net profits realized by the gas division during that year, unless the board of light, gas and water commissioners shall by resolution, consent thereto. This charter provision has been superseded by the Municipal Gas System Tax Equivalent Law of 1987. This law which is shown below provides for the calculation of the Payment in Lieu of Taxes mainly to the City of Memphis but it has a provision that reads (2) Such tax equivalent payments shall be made only from gas system revenues remaining after payment of, or making reasonable provision for payment of: (A) Current gas system operating expenses, including salaries, wages, cost of materials and supplies, power at wholesale, and insurance; (B) Current payments of interest on indebtedness incurred or assumed by a municipality for the acquisition, extension, or improvement of the gas system, and the payment of principal amounts of such indebtedness, including sinking fund payments, when due; (C) Reasonable reserves for renewals, replacements, and contingencies; and (D) Cash working capital adequate to cover operating expenses for a reasonable number of weeks; Looking at the MLGW gas division statements for 2001, 2002, 2003 and 2004 and taking out the PILOT payments made during those years, the MLGW gas division shows a profit of $36.8 million but they paid a total of $55.3 million in PILOT payments. Clearly they are in violation of the 1987 law and are overpaying the PILOT payments. This needs to be investigated. This company belongs to the rate payers and to the citizens of Memphis and Shelby County. The employees should remember the term, public servant. The arrogance shown by City Hall and the MLGW grates on the overburdened taxpayers and ratepayers. I recently sent in an open records request to question why my utility bill from December 2004 compared to December 2005 was up 104% per hundred cubic feet. Nationally, residential gas prices are up 43% for that same time period. Eventually I received a rate chart for the two months showing that the customer charge was changed from $3.40 to $7.00 per month and that the 31% discount over the first 15 ccf usage was deleted. Also the gas rate was increased by 11%. I asked a board member to explain this change to me and how it compared with the statement in the 2004 MLGW financial report on Page N-26 that claimed a gas rate increase of 6.2% and a total revenue increase of 19.1 million. I received a detailed analysis from the rate department which I appreciated. It is very complicated and shows that the MLGW margin increased by 20 to 25% and that the gas rate per ccf increased by 132%. Naturally I wanted to ask some questions and I called the rate department to talk to the person who prepared the analysis. He was out until next Monday so I asked for Dana Jeanes to call me so I could get some answers. The next call I got was from Odell Horton Jr. the new general council who told me to put my questions in writing and they would eventually be answered. This really made me furious. Do they not understand that we own this company. We will not be treated as children who must stand in line to get some simple answers. There is such a storm building due to the arrogance of the City and the MLGW that it will make hurricane Elvis look like a summer breeze. The taxpayers and the ratepayers will sweep these people out of here soon, as we are mad as hell. To win back the confidence and support of the MLGW customers my suggestions are these. Put the following things on the MLGW website. Your budgets, your minutes of your preliminary and formal meeting, copies of your important contracts, your salaries and benefits, your pension plan, all data that you distribute to your board members and most importantly a detailed explanation of how your customers bills are computed showing for instance the overhead and the gas costs separately on the bill. Release your preliminary results of fiscal year 2005 so we can see the profit or loss of the gas division and that will settle whether you are overcharging the public or not. Many suspect you are but the figures will state the case. Change your rules of sunshine requests so that a person can go directly to the person who has the answers and let that person reply directly by electronic communication. If you want to win back the trust of the public, you must embrace transparency and not hid behind Odell Horton Jr. with his asinine request to put any questions in writing and then wait for the answer. Click here to see the Municipal Gas System Tax Equivalent Law of 1987 which shows how much is supposed to be paid to the City of Memphis and other Shelby County cities. Click here to see how the MLGW figures your gas bills including their overhead.  In a recent open records request to the MLGW I asked why my December 2005 gas bill was 104% higher than my December 2004 gas bill. I asked because nationally gas rates had gone up somewhere between 25% and 46% depending on location and time of year. As usual it took weeks for the answer to come back and I got a rate schedule as shown above. At first glance I did not understand what I was looking at but then it dawned on me. I calculated the two bills from the G-1 schedule and they were correct. I looked it over and noticed that in the December 2004 you paid 0.6458 for the first 15 ccf and then 0.4439 for the rest of what you used. However, the December 2005 schedule left the Second Block Consumption blank. In other words you paid 0.7192 for all you used. Who gave them the right to change this method of rate charge? Also they upped the customer charge from $3.40 to $7.00. Here are the calculations. December 2004 Customer charge $3.40 plus 15 ccf x .6458 plus 170 ccf x .4439 plus 185 x .2416 equals $133.25 December 2005 Customer charge $7.00 plus 268 ccf x .7192 plus 268 x .7269 equals $394.56 If my December 2005 bill had been figured by the same method as the December 2004 method (with the first 15 ccf at .7192) and 253 ccf at .494 [68.7% of the rate at the first 15 ccf]), then my bill would have been $337.67, not $394.56, or about 15% less. We are talking millions of dollars (I roughly calculate $36 million extra charges in the12 months of 2005) that the MLGW has charged by this simple change in the method of calculating the bill. I have contacted MLGW board members and asked them about this change and they were not aware of it but said that they would check. I have not heard from them yet. It seems that there are three possibilities. • It was a mistake and the MLGW owes the public a rebate. • It was done knowingly with the hope that it would slip through without anyone noticing. • It was presented to the MLGW board and the City Council and no one realized the significance of the change. Take your choice but we need answers. February 6, 2006 Having a close connection to Willie Herenton and Joe Lee pays off very well if your name is Allan Wade. He not only is the lawyer for the City Council and is on the City’s pension system with health benefits but he also gets legal work at the MLGW in addition to City work, the lottery commission and others. In the past two years he was paid $258,557.54 for legal work at the MLGW. This information was discovered with an open records request to the MLGW. Listed below is the total for 2004 and 2005 of $3.48 million dollars paid to a number of Memphis law firms. Click here to read about how your utility dollars are funding local law firms. February 2, 2006 There was an editorial this morning in the Commercial Appeal concerning the need for a prompt Tennessee Supreme Court decision concerning the Shelby County term limit case. We need the Supreme Court to overrule the appellate court decision which ruled against the 81% vote for term limits. This is the year that we can show these judges that we need judges that listen to the people on issues like term limits. Tennessee Supreme Court Judges and Court of Appeals judges are elected on a “yes-no” ballot every eight years in accordance with the Missouri plan. When a vacancy occurs on the intermediate appellate court, the 15-member Judicial Selection Commission interviews applicants and recommends three candidates to the governor, who appoints a new judge to serve until the next August general election. As with judges on the Supreme Court and the Court of Criminal Appeals, the 12 members of the Court of Appeals must, by state law, be evaluated every eight years. Results of the evaluations are published in newspapers across the state to help voters decide whether the judges should be retained. It so happens that in August 2006 is the year to say yes or no to the Tennessee Supreme Court justices and those judges on the Appellate Court. The recent term limit decision by two of the three Appellate Court judges (David R. Farmer and Alan E. Highers) gives Tennessee voters an opportunity to decide whether they deserve to be continued in light of their decision to overrule 81% of the voters in Shelby County who voted for term limits in 1994. Judge Frank Crawford voted to uphold the lower court decision in favor of term limits. We have read through the decision which is posted below and we find no convincing argument for their decision. This is the same court that ruled against the Charter Commission being on the 2004 ballot. In the ruling in November 2004, the judges were Frank Crawford, David R. Farmer and Holly M. Kirby. Even though the decision was unanimous, Judge Crawford due to the nature of his questions seemed to favor not overruling the lower court decision. In the recent term limits decision, David Farmer and Alan Highers ruled against term limits. The voters of Tennessee need to send a message to these appellate court judges and the Supreme Court judges that the will of the people in trying to reign in runaway politicians with a charter commission and setting term limits needs to be listened to. We recommend a NO vote for Judge Farmer, Highers and Kirby in 2006. And if the Supreme Court fails to hear the case or rules against term limits, those who voted against term limits should get our NO vote in 2006. January 30, 2006 There is a new document from the MLGW that the public needs to know about. I have attached a MLGW cost containment plan update. It contains some startling information. I think this should be reviewed in light of upcoming high salary jobs that are due to come before the City Council for approval. Also some basic questions need to be asked about MLGW’s hiring practices and their benefits. Look over the report. 1. Page 3, customer growth is less than 1% annually. I guess the Mayor’s statements inviting residents to leave are having an effect. 2. Page 4, total labor costs have gone up 36% over 6 years. The CPI is up 13%. 3. Page 5 Medical benefits have doubled over 6 years. Most private companies do not pay more than 50% of the cost of medical insurance. MLGW is only proposing to reduce the portion of the premiums that they pay from 80% to 75%. 4. Page 6 Pilots have gone up 54% over 6 years. It is my understanding that the gas and electric divisions pilots are controlled by state law. I know about the water division and the money that ws diverted from the City budget to the fedex forum bonds. 5. Page 7, pension costs have gone up 74% over 6 years. Why do the president and the vice presidents of MLGW have their pension contribution paid by the division? 6. Page 9, net write offs will jump 5 million in 2006. What are the rules for cutoffs and collections. Those that pay are subsidizing those that do not pay. 7. Page 14, they show 320 vacant positions and on page 16 they show $5.4 million cash flow enhancement by eliminating 185 vacant positions. This shows that the budget is phony with a lot of vacant positions with salaries for vacant positions. We need information comparing budgets and actual expenditures for the past years. They like to keep the vacant positions in the budgets so that when the actual numbers come in they can say that they are under budget. This is phony. PFM has got their nose in the trough again for two studies that are probably not needed. Much of this information is available on line. Also you need to ask now what will be the future effect of GASB 43 and 45 on the City and the Division. The Government Accounting Standards Board (GASB) issued Statement No. 43 of the GASB (GASB 43) entitled "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans" in April, 2004. GASB issued GASB 45 entitled "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions" in June, 2004. The purpose of GASB 43 is to require the accrual of liabilities of other postemployment benefits (OPEB) generally over the working career of plan members rather than on a pay-as-you-go basis which is the current practice for most government sponsored plans. The purpose of GASB 45 is to require the accrual of the OPEB expense over the same period of time. Notice on terminology: The term "postretirement" is sometimes used instead of "postemployment". While somewhat confusing, it is understandable, given the generally different approaches given to such benefits by FASB and GASB. For the purposes of defining the effective date of the standards, GASB 43 and 45 use the terms phase 1 government, phase 2 government and phase 3 government where such terms are defined in GASB 34, paragraph 143. The following table shows the definitions of these three phases and their respective GASB 43 and 45 effective dates: Phase Total Annual Revenues (1) GASB 43 applies for periods beginning after the following dates: GASB 45 applies for periods beginning after the following dates: 1 $100,000,000 or more 12/15/05 12/15/06 2 $10,000,000 - $100,000,000 12/15/06 12/15/07 3 Less than $10,000,000 12/15/07 12/15/08 Note 1 - Based on a government's total annual revenues in the first year ending after 6/15/99. Click here to read about high increases in MLGW overhead cost over the past 6 years. January 26, 2006 Have you ever wondered who hit the jackpot on the startup of the Tennessee lottery. The odds on winning if you or I play the lottery is 1 in millions. But if you are close to the Herenton administration or a favored Nashville firm, the odds are good that you will get a prize. We have been reporting for some time the sweet deals that Allan Wade, Robert Spence and Ricky Wilkins have been getting. Allan Wade not only is the attorney for the City Council and gets a hefty salary and health benefits and is on the City pension system, he gets deals like this. Read the numbers and don't waste your money on any more lottery tickets as your odds of getting a payout like this are slim.  January 24, 2006 Here is another email from our financial guru commenting on the recent proclamation from Roland McElrath (the director of finance for Memphis) that he has a solution for our financial problems. Thanks,Bill, for this incisive analysis. There was a recent CA article headlined “City reveals plan to cut debt”. This shows how inept and incapable they are in addressing financial matters. The City should have been constantly monitoring their debt, and "swapping" it out as rates and conditions indicate. I have no idea why this was considered "newsworthy"??? It is, or should be, "business as usual" balance sheet management. This has absolutely nothing to do with "balancing the budget" and the budget deficits, excepting of course any (relatively minor) interest expense savings. The budget deficits are the result of the continuing mismanagement of the City's financial affairs which causes operating expenses to regularly exceed revenues. The only way to balance the budget is to increase revenues or reduce expenses. This "event" qualifies as neither. I notice the article touted a $521,000 "savings" to the city as a result of the refinancing. Although a relatively minor point, I doubt if that is the case ... maybe interest expense will be lower next year, BUT they also extended the life of the debt from six to nine years. Total interest for the bonds likely increased. I like the term "cash flow relief" .... just indicates a financial crisis, and a temporary deferral of principal payments. Again, has nothing to do with the recurring operating budget deficits. I have no idea why the City Council doesn't push hard for some answers to the many outstanding issues that memphiswatchdog.org has raised that would easily eliminate the deficit situation. (400 appointed, underpowered cronies in "make work" jobs; Linebarger contract; PILOT program; Elkington / Performa contract; etc, ... etc). The inaction is absolutely disgusting! Watchdog has provided the Mayor and the City Council with a "punchlist" on the website, on how to eliminate the budget problem ... and, they continue to sit around scratching their heads wondering what to do. WFF January 23, 2006 Recently I heard the Mayor present his state of the City speech at the Rotary Club. It excelled in platitudes and promises but this it what you have come to expect the year before an election. Remember 2002? What he did not touch on and no one asked in the two allowed questions were the following subjects. • The lunch was held in the Cannon Center, part of the new Convention Center which was supposed to cost $47 million and which ended up costing $106.5 million. $59.5 million down the drain. • Memphis Area Transportation Authority built the three trolley systems with $10.9 million in City money (plus federal and state money) and loses $3.4 million per year. $3.4 million down the drain. • Herenton gave his buddies at Linebarger law firm the contract to collect unpaid taxes at 20% commission when Bob Patterson offered to do it for 2%. $5 million down the drain. • Herenton and the City Council are currently building the Beale Street Landing Project which is completely unneeded and unwanted (except by downtown and beale street interests). The City portion of this is $19 million, down the drain. • The City Council with Herenton’s approval spent $6.5 million on the Whitehaven and Riverside golf courses and club houses (at the insistence of Tajuan Stout Mitchell and Edmund Ford) and now these two courses are closed and not likely to reopen. $6.5 million down the drain. • Herenton has 281 appointed positions more than is allowed by the City Charter but the City Council has approved this excess. 112 of these people make a total of $5 million per year and have 8 years or less of service. By laying them off, we could save the $5 million and keep them for getting on the January 2001 pension retirement program for elected and appointed positions, saving over time another $43 million. • The Herenton Administration has not collected 1 cent from John Elkington and Performa Entertainment (Beale Street Development Corporation) since 1982 and no satisfactory explanation or audits have been done and no required full quarterly and annual reports have been made public. Add another $10 to $20 million down the drain. We could go on and on with the failures of the Herenton Administration but I think you get the point. We desperately need a change starting with the Charter Commission in August of 2006 and voting the Mayor and the majority of the City Council out in October of 2007. Don’t believe the Mayor’s phony promises given just before elections. January 19, 2006 Here is an excellent informed comment on the current employment situation at the MLGW. The situation is becoming critical as talented people leave and/or retire and are replaced by Herenton cronies. EROSION OF TALENT AT MLGW Industry spends a great deal of time and money on Human Resource processes used in the recruitment and retention of highly skilled employees. All Employee Compensation systems are designed with at least one of three basic principles in mind: Attract Retain and Motivate necessary talent. The ability to get ‘em, keep ‘em and make them productive is crucial to the success of any business. MLGW’s current practices are eroding its ability to attract, retain and motivate the highly skilled individuals necessary to operate a very complex three service utility. The factors contributing to this negative trend are as follows: MLGW’s Elimination of Compa-ratio Pay New, inexperienced employees should be paid at or near the minimum of a competitive salary range. As experience increases so should the employee’s pay until that individual reaches the competitive pay rate defined by the salary mid-point. Thus, a compa-ratio pay adjustment is a type of predetermined “step” adjustment given in addition to the annual pay adjustments until that individual reaches the competitive rate (midpoint). These step or compa-ratio pay adjustments are necessary to bring new employees’ pay in line with others, in like positions within the organization, over a reasonable period of time. The cost of these pay adjustments are funded by what is called, salary slippage. Salary slippage is where a high paying employee leaves the organization and is replaced with a much lower paid individual. Those savings can be later used to fund the increased salary for that new employee as he or she progresses. Thus, there is no increased cost to payroll as long as the workforce numbers are not expanding. The current administration has eliminated compa-ratio adjustments for the employees not covered by the union agreement. However, the union employees are still eligible for their “step” increases. This unfair practice will contribute to the turnover of young, promising professionals and ultimately hinder the recruiting effort. Inconsistent Promotion/Hiring Practices MLGW was known as an employer that strived to attract the best talent in the community and to retain much of that talent until retirement. This is evidenced by the many years of low employee turnover prior to the current administration. The current administration has not perpetuated the long established practice of “promoting from within” even though there is an internal bid system still in use. The inconsistent use of that system, by the current administration, will cause concern for existing employees about future upward mobility potentials. This atmosphere of uncertainty and inconsistency will lead to increased turnover of employees with 10 years or less experience. Ultimately, MLGW’s reputation will be such that promising new engineers or other professionals will not even consider coming to MLGW due to lack of opportunities after coming on board. Thus, MLGW will erode its ability to recruit. The turnover numbers are already beginning to increase for the professionals with less than 10 years service. The question must be asked, “Why are they leaving?” Most will point to inconsistent hiring/promotion practices for jobs to which they had aspired. The ole, “if they passed over him, they might pass over me when I obtain that level of experience”----“I better look for other opportunities elsewhere, now!” Cronyism erodes MLGW’s ability to attract, retain and motivate the best talent available and may even be the source of employment lawsuits. Artificial Recruitment Restrictions The current administration has followed the City’s mandate that all new employees must be a resident of the City of Memphis. This restriction does just that----restricts MLGW from recruiting the brightest and best from wherever they live or desire to live. MLGW serves more than just the City of Memphis; it serves Shelby County and even occasionally crosses the Fayette County line. What positive purpose is served by such a restriction? Already, City managers are asking for exemptions to the mandate in order to fill critical positions. MLGW will not be far behind---but the damage will already be done. MemphisWatchdog.org has reported the MLGW employee turnover numbers secured by several public records requests and found the trend to be alarming! It takes MLGW so long to respond to these requests for information that it appears that no one at 220 S. Main Street is keeping up with the numbers. Measuring turnover and assessing its cause/effect is a basic management chore-----HELLO!!!! Watchdog will continue to follow these very important issues. A concerned MLGW retiree  January 11, 2006 THIS MUST BE THE YEAR BEFORE AN ELECTION AS THE MAYOR IS PROMISING NO TAX INCREASE Yesterday I heard the Mayor present his state of the City speech at the Rotary Club. It excelled in platitudes and promises but this it what you have come to expect the year before an election. Remember 2002? What he did not touch on and no one asked in the two allowed questions were the following subjects. • The lunch was held in the Cannon Center, part of the new Convention Center which was supposed to cost $47 million and which ended up costing $106.5 million. $59.5 million down the drain. • Memphis Area Transportation Authority (MATA) built the three trolley systems with $10.9 million in City money (plus federal and state money) and loses $3.4 million per year. $3.4 million down the drain. • Herenton gave his buddies at Linebarger law firm the contract to collect unpaid taxes at 20% commission when Bob Patterson offered to do it for 2%. $5 million down the drain. • Herenton and the City Council are currently building the Beale Street Landing Project which is completely unneeded and unwanted (except by downtown and beale street interests). The City portion of this is $19 million, down the drain. • The City Council with Herenton’s approval spent $6.5 million on the Whitehaven and Riverside golf courses and club houses (at the insistence of Tajuan Stout Mitchell and Edmund Ford) and now these two courses are closed and not likely to reopen. $6.5 million down the drain. • Herenton has 281 appointed positions more than is allowed by the City Charter but the City Council has approved this excess. 112 of these people make a total of $5 million per year and have 8 years or less of service. By laying them off we could save the $5 million and keep them for getting on the January 2001 pension retirement program for elected and appointed officials, saving over time another $43 million. • The Herenton Administration has not collected 1 cent from John Elkington and Performa Entertainment (Beale Street Development Corporation) since 1982 and no satisfactory explanation or audits have been done and no required full quarterly and annual reports have been made public. Add another $10 to $20 million loss as a guess since they will not pursue this lease. We could go on and on with the failures of the Herenton Administration but I think you get the point. We desperately need a change starting with the Charter Commission in August of 2006 and voting the Mayor and the majority of the City Council out in October of 2007. Don’t believe these phony promises given just before elections. January 5, 2006 Yesterday, the Mayor gave his state of the City speech and he pledged to get the city's finances back on track by the end of June, ending a series of budget shortfalls he described as an "aberration.” The Mayor’s history has been so full of canards that no one can take seriously his latest assertion in his quest for a 5th four year term. Memphiswatchdog was only yesterday picking up information in an open records request which will illustrate the mendacity of the Mayor. The Mayor told the citizens of Memphis and Shelby County that he had to sign the FedEx ARENA agreement and that it was a good deal for Memphis because the Grizzlies (Hoops L.P.) had agreed to pay all operating expenses as expressed in the section 7(b)(see below)of the operating agreement. This section says (b) Operating Expenses. In addition to the rent (rent consists of $1.15 per ticket, no ticket sales, no rent) required to be paid by HOOPS, HOOPS shall be responsible during the entire Term for all costs and expenses of every kind and nature related to the use, occupancy, possession and operation of the Arena Complex, including without limitation all operating loses. In addition, HOOPS shall be obligated to reimburse CITY/COUNTY in the amount of any deductible related to insurance coverage maintained by CITY/COUNTY in accordance with Section 9(a)(i) hereof. However the hooker here is the next section, Section 8, Arena Repairs and Maintenance. Section (a) states that during the term of the agreement, the City and County will be responsible for and, at its cost, shall make all Capital Repairs as shown in Exhibit B. In other words, the big ticket items are to be paid by the tax payers, not HOOPS. HOOPS is responsible for (1) making all minor repairs, (2) undertake normal and routine maintenance, (3) provide adequately trained janitorial, maintenance and support staff and keep the Arena in a safe, uncluttered, clean, sanitary and sightly condition and (4) provide security for the Arena Complex 24 hours a day, 365 days a year. In addition the City and County have to pay for all fire insurance policies and other perils. And for this, we gave up the right to have events in the unpaid for Pyramid and the Coliseum. [See section 21, 29 and 30(b)]. Also HOOPS has a way to get out of the agreement if Memphians do not buy enough seats under Section 31, EARLY TERMINATION RELATING TO SHORTFALLS. This terrible, stupid agreement was signed by Mayor Herenton and Mayor Rout on June 29, 2001. Click here to see the section 7(b) of the operating agreement. Click here to see what the taxpayers got hooked for in the operating agreement negotiated by Herenton and Rout. Click here to see the section that prevents us from having events in the Pyramid and the Coliseum. Click here to see the early termination section. January 3, 2006 Buried at the end of today's City Council agenda is an admission by the City Council that they made a huge mistake on May 21, 2002 when they approved unanimously the master plan to remake the riverfront. The resolution which is shown below reads "RESOLUTION supporting the removal of the Land Bridge component from the Memphis Riverfront Master Plan originally endorsed on May 21, 2002, as recommended by the Riverfront Development Corporation." It is interesting that the vote in favor of the hugely expensive and stupid plan was unanimous (11-0) and Tom Marshall and Myron Lowery were absent from the City Council meeting in 2002. Ricky Peete, who voted for it, is presenting the request today to kill it. He is a member of the RDC board. Lowery is the chairman of the CIP budget committee of which Marshall is a member. Both are responsible for the huge CIP budget and have refused to get rid of a lot of unneeded but expensive projects such as the light rail and the beale street landing projects. If they really want to cut the CIP budget and improve the City's financial situation, they should move to kill the current $28 million dollar beale street landiing project which is proceeding and is completely unneeded. Click here to see the Agenda item for January 3, 2006 which kills a project on which millions have already been spent in planning and are now wasted. November 28, 2005 We seem to be ahead of the curve on many of the issues that face the City. Today the Commercial Appeal published a story about a review of the light rail system that has been in the City of Memphis Capital Improvement Budget for some time and which they refuse to kill. Now there will be a review according to the CA as they stated in today's article "The Memphis Metropolitan Planning Organization is commissioning a study of the role of light rail in the area's long-range transportation plan. The move comes as the Memphis Area Transit Authority continues evaluating a possible $400 million rail link extending to Memphis International Airport." Shown below is a comment that we published on October 4, 2005. October 4, 2005 There was a recent editorial in the Commercial Appeal (September 20, 2005) which asked questions about the proposed light rail system which has been proposed by the Herenton Administration and the current City Council. The 2006 Capital Improvement Budget has $280 million dollars between 2007 and 2010 already listed for the light rail system. Whether a light rail system is right for Memphis and Shelby County is something that needs to be discussed in light of the high gas prices that the USA is currently experiencing and is likely to continue in the future. But there can be little doubt that a light rail system between the airport and downtown Memphis makes no sense at all. A light rail system between Germantown and/or Collierville and downtown might or might not make sense. But no one could make a reasonable case for a system between the airport and downtown except the downtown interests who own property there. I would make a guess that 80% or more of the people going to and from the airport do not come to or from downtown. And then there is the question of the cost of running and maintaining the system after it is installed and we have gotten all those Federal and State dollars that the City Council loves to tout. Well just look at the MATA trolley system which cost the City over $10 million dollars (and an overall cost of $104.5 million dollars) and is currently losing $3.5 million dollars each year. It is time we take the Herenton Administration and the current City Council to task and make them see the light of day and where their CIP projects are leading this financially strapped City. Joseph N. Saino November 7, 2005 The story of Ricky Wilkins get more bizarre and the irresponsibility of our political leadership become more apparent as we get more information due to open records requests. We just received a correction letter from Sara Hall, the City Attorney, as shown below. In the letter she states that Ricky Wilkins, a close political associate of Mayor Herenton and a favorite lawyer used by the City, has received over $1 million dollars to represent the City and the County concerning the law suit about the Cook Convention Center. In addition to this, Less, Getz and Lipman, another Herenton favorite law firm, received at least $390,000 from September 1, 2004 to October 2005 in the Cook Convention Center matter. At the end of this the City and County agreed to pay Clark Construction over $10 million to settle. What a deal. Click here to see how much it pays to know and help support Mayor Herenton and what it is costing you in taxes. November 4, 2005 We received the following copy of a letter from Bob Patterson, the Shelby County Trustee, to Brian Kuhn, the Shelby County Attorney. It is the story of how difficult it is to get rid of a government employee who is not performing their job in a satisfactory manner. For some unexplained reason, Shelby County Mayor A. C. Wharton is continuing to pay Ms. Scott. We need an explanation as to why. To: Brian Kuhn County Attorney Disputed employee on the county trustee's payroll Gloria Scott 1796 Edmondson Memphis, Tennessee 38114 1-901-573-2264 Dear Mr. Brian Kuhn Starting June 30, 2003 Gloria's annual review came in under a 3 or unsatisfactory. She was counseled on the things she needed to do to correct her evaluation in six months. The semi-annual evaluation was completed on December 31, 2003 and it was under a 3 or unsatisfactory. At this time she was counseled and given three months to correct any unsatisfactory items or be dismissed . At the end of three months she had grown worse in her work habits and was dismissed. After a loudermill hearing was conducted with an attorney present to make sure that all parties were fairly represented and correct procedures were followed, the appointing authority upheld the dismissal. She applied to the State Department of Employment Security for unemployment benefits. The State Department of Employment Security reviewed her employment record, as well as interviewing the applicant, and unemployment payments were denied. She hired an attorney and requested a civil service review. The Civil Service Board returned her to work subject to a 30 day forfeiture of pay through June 30, 2004, the end of the fiscal year. The Civil Service Board is by law an independent body elected by the Mayor, County Commission, Sheriff, Assessor, Trustee, Clerks, and other County Wide elected Officials. Each official has one vote including the chairman of the county commission. During the budget preparation, Shelby County Trustee Bob Patterson met with Mayor A C Wharton to see if he had an interest or a position for Gloria Scott. His comment was that he was laying off several hundred people and he did not have the money to pay her. The Trustee agreed with the Mayor to transfer both the position and funds from the Trustee's budget to the Mayor's salary budget. During the budget process, the trustee's office lost 5 positions and funds, as well as the Sheriff, Penal Farm, Oakville Hospital and other elected officials. Ms. Gloria Scott's position was not funded by the County Commissioners or the County Trustee's Office in the 2004 -2005 fiscal years budget. The Trustee was working with Ms Scott's Attorney to complete the pay out through June 30,2004. On the October Payroll summary, the Mayor had Mr. Jim Huntzicker back pay Ms. Gloria Scott including the 30 day forfeiture of pay. Thinking that this must surely be a mistake, the County Trustee met with Mayor A C Wharton to have the mistake corrected. The Mayor under the home rule charter does not have the authority to put anyone on the Shelby county payroll except the departments under his administration. Mayor A C Wharton had sworn to uphold the home rule charter and blasted the prior administration for playing with taxpayer money. Mayor A C Wharton referred the Trustee to Jim Huntzicker. Jim Huntzicker said he could not touch Gloria Scott’s pay period for any reason, and he did not want her on his payroll. The Trustee suggested to Mr. Huntsicker and the County Attorney that all of the hundreds of people, positions and funds that were eliminated by the County Commission, have the same rights as Gloria Scott which is 18 months pay plus all benefits including retirement. The County Trustee went to court to get Gloria removed from his payroll. Her attorney delayed the hearing until April. The Judge ruled that Gloria Scott must work to be paid. The sheriff let her work in the filing department until she fell down and bumped her knees and had to take family leave to have both of her feet operated on. This required twelve weeks of family leave with pay, and she brought in a doctor’s release which the judge required in late June 2005. The Judge remanded the case back to the civil service board as Gloria Scott did not have a position nor funds to pay her salary in the trustee's office budget nor does the civil service board have taxing authority. Only Mayor A C Wharton knows why he picked this person, Gloria Scott, and continues to pay her full pay and benefits including retirement out of the hundreds of employees laid off by the County and Other Elected Officials. The next civil service hearing is scheduled for December 8, 2005. To add to the confusion, the county attorney has appealed the 2004-2005 Wage petition which has been completed and agreed to by the Trustee, the Administration and the Judge. Sincerely Bob Patterson County Trustee October 27, 2005 Are you aware of GASB No. 43 and 45? You can look up the definitions by clicking on the link below. Click here to see the definition of GASB No. 43 & 45 If you will look at the 2004 MLGW financial statement you will see the following statement on page N-2. which states that in April and June 2004, GASB issued Statement No. 43 Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement No. 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pension, which is referred to as other postemployment benefits (OPEB) respectively. OPEB are benefits, other than a pension, received by employees (i.e. life insurance) that should be reported as employee compensation. GASB 45 attempts to match the cost of OPEB with the period in which service is rendered and report such benefit. MLGW is required to adopt GASB Statements No. 43 and 45 for financial statements beginning after December 15, 2005 and 2006, respectively. MLGW has not elected early implementation of these statements nor has the financial impact been evaluated. I recently sent the following open records request which seems to be covered by Statement No. 45. In accordance with instructions and as a taxpayer of the City of Memphis I would like to inspect the municipal documents in accordance with the Tennessee Open Records Law that contain the following specific information. 1. The records and documents that show all of the following records and documents concerning the post retirement fund for the health benefits of retirees. I am requesting the trust document, the present and past board members of the trust and all annual financial statements since the inception of this fund. I want to know the present and past annual balances of this fund and the documentation of what the annual income was and the purposes of the expenditures from the fund. Here are some comments from a former Auditor at the MLGW. Both of these GASB pronouncements deal with a subject--the liability for post retirement benefits--that has been addressed by the for profit sector over a decade ago. When I was at MLGW early on, I was arguing that MLGW needed to start accruing for this cost. We had an actuarial valuation study done back in the early 1990's that indicated back then--that the liability was in excess of $300 MILLION dollars. Since it was not a mandatory accounting standard, nothing was done, except to set up what is now the Post Retirement Benefit Fund, an off balance sheet trust whose assets are protected from corporate raiders, and dedicated to the payment of insurance liabilities for retirees and employees. The problem is that this trust fund is woefully under funded. I can tell you that MLGW is seriously under prepared for the accounting impact of these pronouncements, and that when they are implemented they will have a serious impact on rate structures. It may well be the driving force behind why Joe Lee had Marlin Mosby prepare the benefit analysis that was recently published on this website, the one that recommends the possibility that all the retirees be cut loose from an insurance benefit that they were promised their entire career. MLGW and all public municipalities have some really interesting accounting issues coming up, and I'm not sure who is left with the expertise to answer them. This standard and its implementation will also apply to the City, County and other government agencies including the school districts. I have been told that the MLGW fund has been run down to zero but I do not know that for sure which is why I sent the above open records request to the MLGW. Recent financial decisions by the City do not give much hope for the actions necessary to address the current fiscal crisis. October 31, 2005 With the budget deficits up and the bond ratings down, Memphis is in terrible shape due to Mayor Herenton and the majority of this City Council. We will attempt to explain here the reasons for this situation. Each day we will post an example of why Memphis and Shelby County are in this shape. It did not happen overnight and we will not get out of this situation overnight. But it can be done with new faces and basic structural changes in the City charter. We have just received an update on the PILOT (payment in lieu of taxes) situation. Take a look at the current amounts of taxes not being paid, who is getting the benefit of these pilots and who is getting them for the longest time period and make your own judgement as to why certain people and certain groups support the local current politicians. Click here to see highest to lowest non payment of taxes granted by PILOTS. Click here to see who gets the longest time to pay little or no taxes due to PILOTS. Click here to see the PILOTS owners organized alphabetically. October 25, 2005 We keep harping on why the City has received not one cent from Beale Street and John Elkington since 1982 when the lease was signed. Where are the quarterly and annual reports and where is the $265,000 City authorized audit that the Mayor does not think we should see? Here is what we know to date. Two open records requests have been filed, one by Mr. Will Gotten to Sara Hall, the City Attorney, and one by memphiswatchdog.org to Mr. John Elkington. Mr. Gotten has heard from Ms. Hall that some of the reports were in the hands of an attorney, Ricky Wilkins and he was out of town. Mr. Saino first heard from Mr. Elkington that he filed all the reports required with the City and that I was free to come down to his office and see the reports even though he said that he was not subject to the open records law. I took him up on his invitation to visit and he said that he needed a few days to get the information from his accountant. Within a few days I got a letter from his attorney which is shown in an attached pdf file. There can be no doubt that since Beale has received millions of public dollars, that they are subject to the open records law. Also the City is dragging its feet on responding to Mr. Gotten’s requests. The question is WHY? What are they hiding? Here is a sample of past statements from articles in the Commercial Appeal concerning Beale Street and Elkington and Keltner (now Performa Entertainment Real Estate, Inc.). In a 1985 article in the CA, it was reported that some restaurants and shops in the Beale Street Historic District have been unable to repay loans from a special fund set up with public money. Six businesses have received loans totaling $490,000. A seventh loan for $150,000 has been approved for a company that isn’t sure yet what kind of business it will have on Beale Street or who will operate it. The loan fund is administered by the Tennessee Valley Center for Minority Economic Development which got $1 million in deferral money. Also in a 1985 article it was reported that the $12 million Phase I development is nearing completion. In 1986 John Willingham said that he will open a World’s Champion Bar-B-Que restaurant on Beale Street. Willingham is now a county commissioner. In a 1988 article in the CA, here are some of the financial dealings that were listed. Leader Federal sued the company for defaulting on a $75,000 promissory note. It has been paid off. Citibank was seeking $369,000 it claims was unpaid on a $1.35 million loan. The suit was still pending at the time of the article. The Department of Housing and Urban Development helped Elkington get a $2.89 million loan in 1986 for development of Hidden Woods, a 98-acre tract on Covington Pike. Advertising executive John Malmo sued for $81,642 filing in 1986. A countersuit was filed. And there were many other actions at that time. In March of 1992, Herenton hired Ricky Wilkins, attorney Charles Newman and two accounting firms to review Beale Street operations and suggest strategies for its future. In October of 1994 Herenton said that he had no audit to share after the City spent $276,123.00 dollars and 2-1/2 years on audits. Herenton said he was satisfied that nothing was amiss financially. Relations are said to be cordial on both sides now, and Elkington says he informs the mayor directly about the Beale Street plans and operation. In a 1993 Ca article, the following was stated. “Elkington’s company, Beale Street Management, has a 52 year contract to manage the city owned district and lease space to tenants. The management company is entitled to 10.5% of the gross rental income, 5% leasing commission, a fee to administer the common area maintenance and a portion of the parking revenue. According to the 1992 budget submitted by the management company to the city, those fees amounted to $113,606. After 19 years, Beale Street manager John Elkington is ready to pay the city its share of profits from clubs, shops and restaurants in the popular downtown entertainment district. The amount for 2001 could reach $400,000, Elkington said, based on the $240,000 collected so far this year. Despite the long wait for income from Beale Street, city officials have let Elkington hold onto the dough for six months while matters remain unsettled with the third party owed money - the Beale Street Development Corp. On Wednesday, General Services deputy director Darrell Eldred said he will be instructing Elkington by letter to put money into an escrow account, where it will wait until BSDC's future is clear. "Funds he has identified as the excess profits from the street will be transferred to that account pending our resolution of the Beale Street Development leadership dispute," Eldred said. Private developer John Elkington, who sublet the management rights from Beale Street Development Corp., keeps the profits once he pays expenses connected to his company's management of the district. Last year, the profits totaled $131,486. We demand that the missing reports and the withheld audit be made public and we demand that the City collect the money due the taxpayers of the City of Memphis. Click here to see Will Gotten's open records request to the City concerning Beale Street information. Click here to see the letter from Elkington's lawyer in response to an open records request. October 21, 2005 With the big election coming next August, 2006 for the County Mayor, the County Commission and many other positions including, hopefully, the City of Memphis Charter Commission, it is time that we consider how to limit or avoid fraud in the election. In a recent article, John Harvey, a Shelby County sheriff's department lieutenant and Republican who has announced he'll run for sheriff next year, pointed out that during the recent election between Ophelia Ford and Terry Roland, he discovered that five felons voted, though felons are barred by law from voting; 53 voters appeared to be at least 120 years old, and one voter had a birth date that would make him more than 200 years old. Click here to go to johnharveysheriff.com. to get further details. We need to tighten up voting identification and make sure that everyone qualified gets to vote once but only once. We need a paper trail and we hope that the Shelby County Election Commission will do the right thing concerning the new voting machines for the upcoming August 2006 election. Following is an article written by Steven Mulroy concerning voting machine integrity. Paper trail from voting booth is a necessity By Steven J. Mulroy October 6, 2005 Bio info: Steven J. Mulroy is an assistant professor of law at the University of Memphis and a former voting rights litigator for the U.S. Justice Department. Welcome to the brave new world of voting machine technology, where the same type of touch-screen technology you use at your ATM helps record your choices in the voting booth, with the votes automatically tabulated by computer. But while we reap computer-age benefits at the polls, we might want to hold on to one old-fashioned backup system: paper records. We're about to spend millions of dollars in Shelby County to buy a new generation of voting machines -- about 1,500 of them for use in the almost 300 voting precincts in the county. The purchases are necessary to meet federal and state requirements. Of more immediate concern, the 20-year-old Shouptronic voting machines now in use cannot handle the large ballot for the August 2006 county election, which includes judicial positions that open up every eight years. The Shelby County Election Commission will decide by the end of the year what kind of machines to buy. Because of the requirements noted above, they almost certainly will be state-of-the-art direct-recording electronic (DRE) machines with touch-screen technology. But the DRE machines have one problem: If they are hacked, tampered with by election officials or voting machine personnel, or just plain malfunction, there's no way to tell for sure whether the vote totals they spit out accurately reflect what the voters put in. And neither the DRE machines' advertised electronic "audit" function nor the paper record some models produce reliably solves that problem; those functions just reflect the results from the machine's computer, without regard to whether they match votes cast or result from tampering or malfunction. That's why experts across the country, and advocates such as the Democracy Project, a coalition of local citizens' groups, are pushing for machines that use a "voter-verified paper audit trail" (VVPAT). With VVPAT, voters are shown a paper record of their vote choices before they finish casting their ballots; if this accurately reflects their intentions, they approve it and cast their vote. The physical record is stored in the machine and can be used in case a recount becomes necessary. VVPAT is a technology that enjoys wide support across party lines. The national commission on election reform led by Jimmy Carter and James Baker has endorsed it, and Congress is considering making VVPAT a condition for local governments' receipt of federal election assistance funds. Ten states already require VVPATs for all new voting machines, and similar laws are being considered by dozens of others, including Tennessee, Mississippi and Arkansas. VVPAT has its critics, including some (but by no means all) election officials in Shelby County and in Nashville. The main criticism comes from those who question whether VVPAT is necessary. But studies by such authorities as Cal Tech/MIT, the Congressional Research Service, and the California Secretary of State's Office have concluded that DREs are vulnerable to hacking and tampering, and that without VVPATs there is no way to know that each vote is counted properly. VVPAT is also criticized as being expensive and hard to administer because of all the paper that's required. But affordable VVPAT elections have been held in Nevada without any problems, and the other states that have adopted the technology have concluded it is manageable. The companies that manufacture these machines have the technical expertise to make them work properly. The most significant issue with VVPAT is that it could theoretically threaten voter confidentiality, if each machine contains a sequential record of votes that corrupt election officials could match with voter sign-in sheets to determine how an individual voted. But many affordable VVPAT models exist with technical features that prevent such abuse. At any rate, that kind of abuse would be more likely to occur in rural counties with one or two voting machines per precinct; it would not be as significant a concern in Shelby County precincts that have multiple machines. The bottom line is that without VVPAT, an increasingly cynical and alienated public simply will not trust the accuracy of election results, particularly in close elections. Just consider the dispute over last month's state Senate race in Shelby County between Ophelia Ford and Terry Roland or the controversies in Ohio and Florida last November to get a taste of the public's credibility gap. VVPAT would not only ensure accuracy and reliability in our voting system; it also would bolster public confidence in the system. The county Election Commission should buy machines that are either VVPAT-equipped or can have VVPAT features added later -- say, in time for the 2008 elections. And since state certification of a VVPAT-equipped machine is required before a county can use such a machine, the Tennessee Election Commission should facilitate timely certification of VVPAT-type machines. It should not stand in the way of Shelby County's decision to move forward with this reform. A purchase of this magnitude gives us a once-in-a-generation opportunity to ensure reliability and trustworthiness in our elections. If we don't take advantage of it, we may sacrifice voter confidence in our elections for years to come. Asst. Prof. Steven J. Mulroy Univ. of Memphis Law School 207 Humphreys Univ. of Memphis/Memphis, TN 38152 Ofc: 901-678-4494 Fax: 901-678-5210 October 17, 2005 Recently in an open records request to the City Attorney we asked for the following information. I want to inspect the documents and records that show the amount of payments from 1992 to the present time from the City of Memphis for legal services or for other services to Mr. Ricky Wilkins and Mr. Robert Spence. This would include but not necessarily be limited to the Lottery, the Convention Center, MLGW bonds or FedEx bonds and other matters. The answer gives great encouragement to struggling young lawyers. The partial answer I received is Spence received $310,912.44 from 4/1/04 to 7/1/05. Ricky Wilkins received $472,703.03 from 9/16/03 to 8/31/05. They are still compiling what was paid to the law firm of Burch, Porter when he worked there. In addition to this, look at what he got on the convention center dispute. Here is a portion of a letter from Sara Hall, the City Attorney. “Beginning July 1, 2004, the City and County entered into a flat monthly legal fee arrangement as to defense of the City in the Cook Convention Center litigation and all payments were made to Less, Getz & Lipman. Under this arrangement, Ricky Wilkins received $30,000 monthly from the flat amount paid to Less, Getz & Lipman for his representation of the City and County in this case.” Do the math. $30,000/month times 12 months equals $360,000/year. What a deal. Mr. Spence was the former City Attorney. Let us not forget that Spence, in his capacity as city attorney, signed off on the FedExForum deal, non-compete clause and all. Wilkins has close ties to the Mayor as his former campaign manager. We have earlier reported on Allan Wade, the attorney for the City Council and his additional private practice. They are all doing very well at the tax payer’s expense. Click here to see what legal services are costing the tax payers and who gets the benefits.Also check out the sweet deal Robert Lipscomb is getting in his dual jobs. October 18, 2005 At last reality has begun to dawn on the Riverfront Development Corporation and they have temporarily killed the expensive, unwanted land bridge. Whether the current City Council will back this decision is unknown at this time as they continue to insist on their expensive, unneeded capital improvement projects. Memphiswatchdog.org has just obtained all the inside information on the riverfront Development Corporation and we publish it below for the general taxpaying public to study. Here are the important points. • As of June 30, 2005, RDC had a net worth of about $1 million • During the year ended June 30, 2005 RDC received a little over $6 million from the City. • RDC (really the City of Memphis) lost a little over $2 million in the last year on the parks, mainly Mud Island. • In July 2001, RDC signed a contract with the City of Memphis giving them management of all City of Memphis riverfront property paying them over $10 million to date. • Benny Lendermon, the President of RDC makes a salary of $172,050 per year plus a bonus of $25,000. Also he and other employees get vacations, sick leave, health insurance, life insurance, short and long term disability insurance, and a retirement plan, all as shown on the attached information. • Bounds & Gillespie, Architects, received a three month contract in 2004 for a Beale Street Landing design contract for $3,137,266.00. • Hnedak Bobo Groups, Inc have a monthy Beale Street Landing Management contract of $34,000/month since 11/27/01. that is nearly $2 million to date. The public needs to consider that the City debt has nearly tripled in the last ten years to over $1 billion. We do not need to spend money on these kinds of projects until we get our finances under control in the City and the County. Click here to see the audited financial statement of the Riverfront Development Corporation. Click here to see the salaries and benefits of the RDC employees. Click here to see the projects and associated contracts of the RDC. October 14, 2005 The PFM report to the MLGW is very interesting but the heart of it is on pages 18 to 22 which we have presented below in an attachment. This is a list of a summary of possible initiatives and in some cases the 5 year fiscal impact is listed. For instance item 1-a lists a savings of $48.3 million dollars where MLGW pays 100% of health care coverage for employee only and the employee pays for his family’s coverage. Item 1-d is where MLGW pays for 60% of single and dependent coverage whereas now they pay 80%. This saves $33.2 million over 5 years. Item 3-d is very interesting and plans a defined contribution plan rather than a defined benefit plan. A defined contribution plan is what most of the real world private companies have. Only government institutions have defined benefit plan anymore. No cost savings are listed for this but it would be substantial depending on the contribution level. Whatever is done, particularly some of the above, should be done across the board not just for the MLGW but for all City and County governments. It is time they come into the real world and get out of their fantasy world. Click here to see the PFM recommendations on changing the MLGW. October 13, 2005 As you pick up your morning paper or possibly you heard it on the news last night, Janet Hooks has resigned from the City Council and is taking the position of Director of Multicultural and Religious Affairs. Talk about a useless high paid job, this is the posterboy of jobs that goes throughout the Herenton administration. Narquenta Sims used to have this job and we have not heard where she is now going. The Mayor raised this job substantially last year and it is currently paying $74,263 annually. To this you can add 40 to 50 percent benefits. Please note that Ms. Sims, since she is in an appointed position, can retire based on the current salary under the January 2001 pension resolution and so can Ms. Hooks if she serves a year in the slot. This is what you current City Council voted for and it is costing millions, millions that we do not have. Ms. Hooks can be long remembered for her saying in City Council meetings that we do not have a spending problem, we have a revenue problem. This is further evidence that we need to replace the Mayor and the majority of the City Council before we can bring any semblance of fiscal discipline to this City. Also read below a recent article written by Carol Chumney. Click here to see what Carol Chumney has to say about the fiscal incompetence of the Herenton administration. October 10, 2005 We have obtained copies of agreements, contracts and other data between the City of Memphis and Riverfront Development Corporation (RDC). We have attached them in two pdf files for the public's review. This information gives a clear picture of the millions of dollars spent by the City of Memphis for planning for a project that is not needed or wanted by the tax paying public but which provides a nice income for RDC employees and the prospect of future development projects for downtown developers using public money for a large share of the cost. The picture of the relationship between the City and RDC is there to see. Some guidance and overviews are necessary in looking at these documents. The first file is City Contract #N17090 which is a Master Development Agreement dated January 29, 2004. The reason given by the City for the contract is that the Riverfront is under utilized and blighted and that it requires sound re-planning and redevelopment under a plan that will eliminate blight and decay and will accomplish the modernization and general improvement of the City of Memphis downtown area. The City will pay the bulk of development with some money coming from the State and Federal sources. The City also will pay the cost of management by RDC. Concerning this, the most recent information from the RDC website shows that for the year ended June 2004, out of $4.19 million in operating expenses, salaries, wages and benefits cost $2.2 million or 52.7%. Sources of revenue were $3.5 million in contract revenue, $250,000 from City grants and $1.3 million to take care of various City parks. $1.1 million was spent on Capital projects. The rest of the paperwork is interesting. It goes back to the year 2000. Pages 1-4 is the restated charter of the RDC. Pages 5-8 are two ordinances (4751 and 4763) to modify the jurisdiction of the Memphis Park Commission over certain parks and other facilities and to create a new Division of Park Services, thereby killing the old effective well run Park Commission. Pages 9-12 is a management agreement as amended for RDC to manage Mud Island River Park and other various parks. Pages 13-20 is a list of various properties of the City and County giving information as to location, size and annual rental and other data. Pages 21-23 is a management agreement dated June 29, 2001. The City agreed to Pay RDC $2.9 million dollars the first year as a management fee and starting July 15, 2006, that annual fee would reduce as shown. Pages 24-28 is a master plan agreement where the City agreed to pay RDC $761,000 for a master plan. Page 29 is a RDC routine maintenance schedule for various parks. Pages 30-31 are bid and contract agenda sheets from the General Services Division of the City. Pages 32-34 are contract amendments and extensions for contract N16404 for $3.9 million from the CIP project GA-055 for Land Bridge Planning and Design. Pages 35-39 is a Planning Agreement date January 23, 2003 for $3.27 million dollars for Engineering-Architecture. Pages 40-41 is an agreement between the State of Tennessee and the City of Memphis for a $7 million dollar appropriation for Riverfront Development. Attachment A (page 41) shows what it is for and that the estimated project cost is $15 million dollars. We do not know if this was ever received by the City of Memphis. Page 42 is a bid and contract sheet for RDC for $125,000 dollars. Pages 43-46 is a RDC agreement for Urban Land Institute Advisory Services for $3.08 million dollars. Pages 47-49 is a resolution from the City Council for $1.8 million dollars, most in G. O. Bonds for improvements. Pages 50-51 are bid and contract sheets for $1.8 million and $3.92 million dollars. Page 52 is an inter-office memo from Jerry Collins, Director of the Public Works Division, to Keith McGee, CAO saying that the $3 million is entirely for the design contract for Beale Street Landing and that the actual project is estimated to cost $20-25 million. Pages 53-55 is an agreement for pedestrian park improvements for $1.8 million. Click here to see the agreement that the City of Memphis made with the Riverfront Development Corporation. Click here to see what the City has spent and the Riverfront Development Corporation has cost you so far.  October 6, 2005 Many people have asked us to keep them informed on the construction of the house for the Grandmother of Ricky Peete. A current picture is shown above. This house, built under the H.A.R.P. program of the Housing and Community Development Department of the City of Memphis, is coming along well. We checked with the HCD department last Tuesday, October 4, 2005 and got some answers to our open records request questions. We did not get to look at the file concerning this house as it was not available but hopefully we will get a look at it soon. We were furnished a log of projects in progress and we have shown below a page from that log. The house in question is at 500 N. Sixth St and you will note that under comments it states "IN PROGRESS/empty boxes information not provided by finance". This is the only entry with such a note. No doubt many of our readers noted the political cartoon today in the CA. Click here to see the housing tracking log for the H.A.R.P. program of the Housing and Community Development Department of the City of Memphis. October 5, 2005 Recently we sent an open records request to the Riverfront Development Corporation which is shown in a pdf file below. We received an answer also as shown below. In that answer Mr. Lendermon claims that RDC is not subject to the Tennessee Public Records Act, this in spite of the fact that on their website under financial highlights, they show a City Grant of $250,000 and receive City Money for Park Operations of $1,311,463. Also they show Contract Revenue of $3,557,996 which is undefined as to source. Sure sounds like taxpayer money to us. However, Mr. Lendermon graciously offered to sell us some information at 40 to 50 cents per page which we accepted. The RDC plans for our riverfront can be seen on their very nice website. Click here to see what RDC has planned for your riverfront. The history here is that the RDC had meetings on proposals and the overwhelming sentiment of the public is that the excessive taxpayer cost of public money (General Obligation Bonds) and the loss of public property does not justify the proposed projects. The City Council has approved the RDC plan and the Capital Improvement Budget from 2006 to 2010 has $52 million dollars scheduled, $39 million of which is financed by City of Memphis General Obligation Bonds. And furthermore, just this morning the Commecial Appeal said that the RDC is moving ahead on the $27 million riverboat landing at Beale Street (if the city council OKs $500,000 next week for dredging). No mention, of course, of operating costs vs. revenue or the bound-to-be-extraordinary maintenance costs of the sophisticated dock designs for river fluctuations. This is another example of an out of control Herenton Administration and a City Council that has a majority that goes along with these financially unsound schemes. Click here to see our open records request to the Riverfront Development Corporation. Click here to see RDC's answer to our open records request. Click here to see RDC financial highlights. Click here to see the CIP budget for the City of Memphis for the Riverfront. October 3, 2005 There is an interesting editorial this morning in the CA concerning secrets at the Industrial Development Board. They are withholding the name of a potential PILOT recipient until the full board gets ready to approve or deny the PILOT. The whole subject of PILOTS and their effect on our local tax situation has been a consistent subject of this website. The evidence is that they are grossly overused and that certain local interests get most of the benefits and that the tax burden is being carried by the homeowners in higher and higher property taxes. We have posted below some additional information on current PILOTS and we have listed them by the date that they are supposedly returning to the tax rolls listing them at the longest date to closer dates. The longest date is 2040, 35 years from now. If you study these listings, you will note that most of them are downtown properties and interests. Also in another list we have, we note extensions of time that were granted by the IDB before the property returns to the tax rolls. Here is a listing of a few of the extensions. JPI Apartment Development, LP was the original Lessee. The current Lessee is Knickerbocker Properties, Inc XXXIX, Levee Road, (North Mud Island). The project cost is $27 million. The date of board approval was 4/13/99 for 25 years. It was then extended to 40 years terminating in 1/14/40. The parcel number is 069-077-00042. Peabody Place LP is the original Lessee. The Building address is Peabody Place, Hampton Inn. It was originally approved for 25 years but was extended to 40 years and will end on 12/31/38. It is appraised at $10,870,000 and pays zero taxes. Forty years is ridiculous for a PILOT but that is what these special interests are getting from an unelected board. Click here to see part of the 2005 County Trustee PILOT contract aging report. September 30, 2005 We like to publish comments from knowledeable people as we receive them and this one is particularly appropriate and timely considering the lack of oversight of the taxpayers money evidenced by the City of Memphis and the Herenton administration. I read with great interest your recent information about the lack of funds flow from Beale Street to the City of Memphis, and your question about the existence of external audits. I will virtually guarantee that no independent, external review has been made on this situation, and its attendant lack of cash flow, and I can further guarantee that it won't be done by the City Internal Audit staff either. Remember, it was Liz Moore--she of no professional audit certification--a WWH/Joe Lee appointee--who was brought into MLGW to drive the now infamous and ficticious "A&L Contractor Audit". It is simply amazing to me that WWH/Joe Lee can free up the City Auditor to do work at MLGW, where there was already a recognized, seasoned, credentialed audit team, when there was a target rich environment like this around. Why do the City Auditors not look into and catch these things? How is it that City budgets, and area known to be fraught with error get no scrutiny. If the City Internal Audit department is not looking into items like the Beale Street contract, nor into the errors in City finances, what are they doing? There is a whole floor of them in City Hall? What are the taxpayers paying them to do? Mike Whitten, CPA, CIA, Former General Auditor of MLGW September 28, 2005 Pilots (payments in lieu of taxes) are much in the news these days. Finally they are coming under a lot of study. Today, there was a very biased article in the Commercial Appeal written by Amos Maki of the CA. Here are some examples of the bias of this article. “Memphis and Shelby County have had strong success with the local tax break program -- payment-in-lieu-of-taxes, or PILOTS. In fact, that program along with state tax incentives played a large role in International Paper's recent decision to move its corporate headquarters from Stamford, Conn., to Memphis. In August, the Memphis and Shelby County Industrial Development Board, the agency that administers PILOTs, granted IP a 15-year property tax freeze that could save the company $15 million, a crucial step in the city's successful effort to win the company's corporate office. ECD officials also said IP could qualify for job training grants for new hires, the jobs tax credit and sales tax credits.” Many people feel that IP would have moved here with or without the giveaway as they were in one of the highest tax states in the USA, Connecticut. Also they have said that they are going to sell off some divisions which probably means job losses in Memphis. But the unelected officials on the IDB gave away our tax money. This has to stop. Another example from this article is shown below. “Brad Kornegay, president of the Memphis-based real estate firm Colliers Management Services, said the PILOT program enables Memphis and Shelby County to compete for jobs. "This isn't pork barrel, this is necessity," Kornegay said. "Without it, these companies are not here." Besides creating jobs, supporters of the PILOT program argue that it produces a return on investment as well. "A 2000 study sponsored by the Memphis Regional Chamber and conducted by Jackson, Tenn.-based Younger Associates found that the PILOT program created $2.47 for every $1 the city and county didn't collect.” Well, the reason we cannot compete is that we have the highest tax rate in the state and one of the major reasons we do is that we gave away $54.5 millions dollars in Pilots in 2004 and the annual giveaway is increasing each year. Nashville and Davidson County gave away $675,000 dollars in 2004. Then the article goes on to cite a study done by Younger Associates claiming that $2.47 is created for every dollar the city and county did not collect. If you believe that, I have some oceanfront property in Phoenix, Arizona I want to sell you. I suggest you go to the following report paid for by the State of Tennessee which concludes: As a general rule throughout the U.S., no one knows • the actual magnitude of tax abatements; • whether abatements are cost effective in creating jobs and promoting economic development; • the total cost of tax abatements; • how much revenue schools are losing because of abatements; and • there is very little in the way of audits or legislative oversight. Click here to read this State report to the General Assembly September 27, 2005 We received a call from the City Attorney last Thursday and we appreciate the call. The City Attorney is honest and competent and is following the law to the best of her ability. She has been courteous and prompt in reply to our open records requests. She called to inform memphiswatchdog about the new revision to the Linebarger contract for the collection of delinquent taxes. We initially got a copy of the Linebarger contract and published it. We published the fact that the City of Memphis paid or owed Linebarger $5.5 million dollars in commissions (19% to 20% of the money collected) whereas Bob Patterson, the County Trustee, was willing to do the job for 2% or about $500,000 on the same amount collected. Then Ms. Hall, the City Attorney, renegotiated the contract and got Linebarger to kick back $1.5 million and make some other concessions. She tried to explain to us that is was a win/win situation. Frankly I listened politely but we were not convinced. She said that it is still possible that Mr. Patterson may be given the contract in the future. But then we went on to question her about the Beale Street Development Contract and the supposedly missing quarterly and annual reports. As you may remember her words in item 4 to Mr. Will Gotten’s open records request were as follows. 4. Question. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property. Answer: Since the City has not received any funds, there are no accountings of funds received. We assumed that that answer meant that they had not received any quarterly or annual reports. WRONG!! The City has received some, if not all of the reports, and she is checking to see if they have all of them and also the Audit that the Mayor has withheld and will provide them ASAP. But that still begs the question of why the City has not received any money and have all of these reports been audited by an independent auditor. The biggest failing of the Herenton administration is the lack of oversight and independent auditing of the millions of dollars flowing through their sticky hands. There are still many answers to come. September 22, 2005 Pilots and Exempt Property in Memphis Mayor Herenton has come up with yet another financial plan to save Memphis. He has brought in some of his financial wizards, Robert Lipscomb from Housing and Community Development and Roland McElrath from the Memphis Housing Authority. Mr. Lipscomb heads a department that somehow put Councilman Ricky Peete's Grandmother at the head of a very crowded H.A.R.P. program and is building her a new house at the taxpayers expense. Mr. McElrath retired from the City finance department under the January 2001 pension resolution and went to the Memphis School System where he participated in the infamous SchoolTran contract and then left there after several years and went to the Memphis Housing Authority. Now the Mayor has come up with a familiar basket of solutions, one of which is to establish committees to review the payment-in-lieu-of-taxes (PILOT) program. Well we have plenty of information on this program and we will show you below everything you need to know about this outrageous and unfair program. What it amounts to is this. The homeowners pay and almost everyone else gets a pass. We have done extensive investigations and we show below the facts on this program. We list below four spreadsheets. The first one is from the Tennessee Comptroller of the Treasurer, State Board of Equalization of the State of Tennessee. The report is called IDB/H&ED Report, 2004 Summary. This shows the PILOTS for each county in Tennessee for 2004. What it shows for Shelby is that we gave away in 2004 $54.5 millions dollars in PILOTS in Memphis and Shelby County. Nashville and Davidson County gave away $675,000 dollars. When you look at the list you will see who is getting the benefit of this largess. Maybe some of it is justified but not this huge giveaway to the well connected and the powerful who back the current local politicians. We have also posted information from 2003 supplied by Bob Patterson, the Shelby County Trustee. One shows the Shelby County PILOTS listed alphabetically and the other shows the same information listed from those receiving the highest tax exemption to those receiving lesser amounts. This only shows the tax payments and taxes not paid for Shelby County. If the property is in the City of Memphis, then there are similar but somewhat smaller figures based on the City property tax rate. Then finally we have posted all the exempt properties for 2003. These pay zero taxes and there are over 15000 pieces totaling $3.5 billion dollars in appraised value. We need to consider why Shelby County is giving away over $54 million dollars each year in tax money we desperately need whereas Nashville and Davidson County gives away less than $1 million. Click here to see the 2004 Memphis and Shelby County tax giveaways under the PILOT program. Click here to see the 2003 Shelby County PILOT giveaways from top receipts to bottom. Click here to see the 2003 Shelby County PILOT giveaways listed alphabetically. Click here to see the over 15000 tax exempt(zero taxes)properties in Memphis and Shelby County. September 21, 2005 There are some interesting developments in the wake of Will Gotten's open records request and answer shown below and shown on Channel 3 Monday night, September 19, 2005, at 10 PM. Mr. Gotten has obtained a letter from the City of Memphis to Mr. Elkington dated October 26, 2001 asking Mr. Elkington to deposit all net revenues generated from Beale Street Operation to an escrow account in Chase Manhattan Bank. This letter is shown in a pdf file below. Was this done and where is the money? Mr. Elkington says he owes at lease $4 million to the City. These are part of the questions asked by Mr. Gotten in the attached new open records request. Date: Tue, 20 Sep 2005 13:20:26 -0500 > Dear Ms. Hall and Mr. Jefferson: > >This is to acknowledge receipt of Ms. Hall's letter of September 14, 2005. >Unfortunately, this response raises more questions than it answers about the >funds due the City of Memphis and the accountings that have not been filed >as required by the Lease Agreement and Sublease Agreement of November 29, >1982. > >Since you now know that I am very serious about getting answers to my >questions, and that I will not stand for a public records request to go >ignored or pushed aside by your office, I trust that I may receive a prompt >response from your office to the following requests: > >As a taxpayer and citizen of Memphis, I would like to inspect all municipal >documents, records, letters and communications, in written or electronic >form, that contain information relevant to the following subjects: > >1. The amount of money that has been paid to all attorneys representing the >City of Memphis in Chancery, Circuit or General Sessions lawsuits, either as >a plaintiff or a defendant (including as a third party), which included as >other parties to the litigation, Beale Street Development Corp., Elkington >and Keltner Properties, Inc., Beale Street Productions, Inc., Beale Street >Management, Inc., Performa, Inc., Performa Entertainment, Inc., Performa >Entertainment Real Estate, Inc., John Elkington, George Miller and Randal >Catron, from 1982 to present. > > The above request includes, but is not limited to, the following > lawsuits: > > Chancery Court of Shelby County, Tennessee, Case No. 99-0612-2, City of > Memphis, Plaintiff vs George Miller, et al. > > Chancery Court of Shelby County, Tennessee, Case No. CH -03-0574, Sherry > Jeffries Compton vs City of Memphis, et al, > > And including, but not limited to, attorneys Ricky Wilkins, Kathy Kirk, > Alan Wade, Charles Newman, and the law firms of Burch, Porter & Johnson > and Baker, Donelson, et al > > >2. The amount of money that has been paid by the City of Memphis to all >attorneys, accountants, certified public accountants or, other privately >employed city personnel, to review, examine or audit any records, books of >account, checks, payroll records or other records of any kind that were the >records of Beale Street Development Corp., Performa, Inc., Performa >Entertainment, Inc., Performa Entertainment Real Estate, Inc., Beale Street >Management, Elkington and Keltner Properties, Inc., or its successors in >interest, from 1982 to present. > > The above request includes, but is not limited to, the law firm of >Burch, Porter & Johnson, and attorneys, Ricky Wilkins and Charles Newman. > > >3. Copies of the accountings and other reports delivered to the City of >Memphis as a result of charges incurred and fees paid by the City of Memphis >to those attorneys, accountants, certified public accountants or privately >employed city personnel for the reviews, examinations or audits performed on >the records of those entities listed as stated in Request # 2 above. > > >4. The amount of money that has been paid by the City of Memphis from >November 29, 1982 to the present date, to settle, dispose of, or resolve >litigation, or threatened litigation, or a dispute of any nature, to any >person, corporation or entity, involving properties belonging to the City of >Memphis leased to Beale Street Development Corporation as identified in a >certain Memorandum of Lease dated November 29, 1982, and recorded on >November 30, 1982, under Register's No. T7 3771, in the Register's Office of >Shelby County, Tennessee. > > >5. Copies of any written requests or instructions made by, or on behalf of, >the City of Memphis from November 29, 1982, to the present date, directed to >John Elkington, Elkington and Keltner Properties, Inc., Beale Street >Development Corp., Beale Street Management, or any successsors in interest >of these entities, including, but not limited to, Performa, Inc., Performa >Entertainment, Inc., Performa Entertainment Real Estate, Inc., with regard >to monies received, or to be received, or held by such person or entities, >resulting from the leasing of the properties identified in Request # 4 >above. > > >6. The names of all persons employed by the City of Memphis whose direct >responsibility it was, or is now, to monitor receipts for rent to be >received by the City of Memphis from the leasing of the properties >identified in Request # 4 above, from November 29, 1982 to the present date. > > > Please provide promptly a date, time and place for the inspection of >documents and personnel for making copies if desired. The reasonable cost >of such copies will be paid at that time in accordance with City of Memphis >policy concerning furnishing copies of city documents. > >Sincerely yours, > > >William M. Gotten Click here to see a letter from the City of Memphis to John Elkington requesting that he deposit Beale Street money into an excrow account. September 19, 2005 Recently an outstanding Memphis citizen sent an open records request to Ms. Sara Hall, the City Attorney, asking for information about Beale Street Development Corporation. His name is Will Gotten and he is a retired lawyer. Here is his request. From: William Gotten >To: >Subject: Beale Street Development Corp. >Date: Wed, 22 Jun 2005 10:52:28 -0500 > >Dear Mr. Jefferson: In November, 1982, the City of Memphis entered into a >lease of Beale Street property to Beale Street Development Corp. (BSDC), a >non-profit corporation, which then, with the approval and knowledge of the >City, subleased to Elkington & Keltner and its successor in interest, >Performa, Inc. The lease and sublease provide that rental payments are to >be made to the city based on rental income received from the demised >property during its term. > >As a taxpayer and citizen of Memphis, I would like to inspect the municipal >documents, records, letters and communications, both written and in >electronic form, that contain information relevant to the following >subjects: > > >1. The amount of money that the City of Memphis has received each year as >rent of the demised property directly from BSDC since 1982 to the present >date. > >2. Any written agreements that provide for payment of rent for the demised >premises to be made directly to the City of Memphis by an entity or person >other than BSDC. > >3. The amount of money that the City of Memphis has received or is receiving >currently by an entity or person other than BSDC, since the inception of >such payments to the present date. > >4. All annual, semi-annual or quarterly accountings of gross funds received >and/or expenses deducted, which is determinative of the rent the city has >received or is currently receiving for the rental of the demised property. > > >Please provide promptly a date, time and place for the inspection of >documents and personnel for making copies if desired. The reasonable cost >of such copies will be paid at that time in accordance with City of Memphis >policy concerning furnishing copies of city documents. > >Thanking you for your cooperation, I remain > >Sincerely yours, > > > >William M. Gotten After almost three months and repeated requests for an answer he finally sent a communication saying that he was filing suit to obtain the information. The next day he got a call and an answer. Here is the answer from Ms. Hall. VIA E-MAIL AND U.S. MAIL September 14, 2005 Mr. William Gotten 6426 Kirby Oaks Drive Memphis, TN 38119 Re: Open Records Request Dear Mr. Gotten: I am writing in response to your August 31, 2005 letter to me and as a follow-up to our telephone conversation this morning. As I stated at the outset of my call, I called you this morning to personally apologize for the amount of time it has taken to answer your open records request. Also, during that telephone conversation, I gave you the answers to the questions you asked in your open records request and stated that I would follow-up with a letter to you, which I am doing now. Your inquiries and the City's preliminary responses are as follows: 1. The amount of money that the City of Memphis has received each year as rent of the demised property directly from BSDC since 1982 to the present date. Answer: I have checked with the General Services and Finance Divisions and have been advised that the City has not received rent from BSDC since 1982 to the present date. 2. Any written agreements that provide for payment of rent for the demised premises to be made directly to the City of Memphis by an entity or person other than BSDC. Answer: I have checked with the General Services and Finance Divisions and have been advised that there are no written agreements that provide for the payment of rent to be made directly to the City of Memphis by an entity or person other than BSDC -- that is, other than the documents that we have already produced to you which include the lease between the City and BSDC and the sublease between BSDC and Elkington and Keltner Properties. In as much as you indicated that you already had these documents in your possession, I have requested a check in the amount of $8.25 be made payable to you as reimbursement for those copy costs. 3. The amount of money that the City of Memphis has received or is receiving currently by an entity or person other than BSDC, since the inception of such payments to the present date. Answer: I have checked with the General Services and Finance Divisions and have been advised that the City has not received rent or other money related to these agreements or premises from any entity or person other than BSDC. 4. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property. Answer: Since the City has not received any funds, there are no accountings of funds received. Mr. William Gotten September 14, 2005 Page 2 Again, I apologize for the delay in responding to your request. As you are probably aware, the City has been involved in lengthy litigation with a number of parties over the operation of Beale Street for a number of years. Also, there have been various City officials assigned the responsibility of overseeing activities on Beale Street over the years, many of whom are no longer employed by the City. I appreciate your understanding. Sincerely, Sara L. Hall City Attorney xc: Keith McGee, Chief Administrative Officer A little history is necessary here. We have attached below the two leases in question, the lease between the City of Memphis and Beale Street Development Corporation (BSDC) and the lease between Beale Street Development Corporation and Elkington and Keltner Properties, Inc. (lessee) and its successor in interest, Performa, Inc. Both leases are dated November 29th, 1982. The lease between the City and BSDC is signed by interim Mayor Wallace Madewell who succeeded Mayor Wyatt Chandler when he resigned. In that year the FBI and the IRS investigated BSDC records and BSDC signed a 32 year lease with the City and contracted with Elkington and Keltner Properties to co-develop and manage the properties. (Later Elkington and Keltner renamed Beale Street Management as Performa Entertainment Real Estate Inc.) In 1994 an option was signed to extend the contract to 2034. In March of 1992 Mayor Herenton ordered an investigation of BSDC and Elkington’s Company. In October of 1994 Herenton said that he had no audit to share after the City spent $276,123.00 dollars and 2-1/2 years on audits. In a Commercial Appeal article dated October 25, 2001 there was the following quote by Elkington.[Elkington said he wrote city officials in May, and again in the months since, about his readiness to transfer funds. "I've been repaid now. I'm happy," Elkington said. Elkington, chief executive officer of Performa Entertainment Real Estate, the district's management company, said he was finished repaying Performa for money loaned to the district's operation during lean, early years.] The real point here is shown in item #4 of Sara Hall’s answer to Mr. Gotten. 4. All annual, semi-annual or quarterly accountings of gross funds received and/or expenses deducted, which is determinative of the rent the city has received or is currently receiving for the rental of the demised property. Answer: Since the City has not received any funds, there are no accountings of funds received. In the BSDC/Elkington and Keltner Properties, Inc. lease, Section 5 it says “Lessee shall furnish Lessor and the City quarterly reports in writing, not later than the 15th day of each following quarter, showing the amount of Gross Rental, as hereinafter defined, from the premises during the preceding quarter. Lessee further agrees that it will submit to the Lessor and the City within one hundred and twenty (120) days after the expiration of each full lease year a complete statement certified by Lessee or an independent CPA if the Mayor so requires in writing, showing in reasonable detail the amount of Gross Rental Income from the premises during said period. Therefore there should be 92 quarterly reports and 23 annual reports. But Ms. Hall says that there are no reports and zero funds received by the City. As a citizen of the City of Memphis and a taxpayer, I demand an investigation of this situation and call on the Mayor, the City Council and the FBI and the IRS (as was done in 1982)to immediately investigate this situation and audit the books and determine how much money is owed to the City from Beale Street. Federal, State and City money has been invested in Beale Street and taxpayers need an explanation. Click here to see the City of Memphis/Beale Street Development Corporation lease. Click here to see the Beale Street Development Corporation/Elkington lease. September 14, 2005 The recent decisions by the Memphis City Council and the Shelby County Commission to accept the settlement offer by Clark Construction Company concerning the claim by Clark on construction of the Cook Convention Center and the Cannon Center is another example of poor management and construction documents by both the City and the County. Why is it that the project cost twice what it was originally estimated to cost? Why does this type of poor construction management happen again and again on public projects. This one will cost $10.3 million plus another $46 million over and above the original estimate. One explanation is that the politician’s always low ball the project estimate so that they can get the project approved knowing all the time that there will be changes to expand and gild the lily down the road. The contractors low ball the initial price to get the job knowing that they will get up and catch up on the change orders. John Willingham and George Flinn called it blackmail by Clark Construction calling them “masters of change orders”. We need to change most of the City and County elected officials so that we can get experienced business people into these critical jobs and bring this City’s and County’s financial problems under control. In 1996 this project was supposed to cost $47 million dollars. It ended up costing $106.5 million. How is that for leadership? September 13, 2005 Recently Mayor Herenton said that he no longer had faith in his finance team. Well he has good reason for this lack of faith. He previously had Joseph Lee as his financial guru who left the City with a multi million dollar short fall. As a reward for this incompetence the Mayor sent him to the MLGW, the financial jewel of the City. Now after a tax increase which the Mayor said would solve our problems until the next election in 2007, the Mayor has again announced an embarrassing $10.3 million dollar shortfall. So what does he do, he announces the appointment of Robert Lipscomb and Roland McElrath as his new financial team. What is the record of these two wizards. Robert Lipscomb has run his own fiefdom at the Housing and Community Development Department and the Memphis Housing Authority spending millions of taxpayers dollars without any oversight and involving such suspicious actions as building a house for the grandmother of Councilman Ricky Peete who somehow moved to the first of a crowded list of applicants. And then there is the much traveled Roland McElrath who retired on a short term pension from the City under the infamous January 2001 pension resolution and then went to the Memphis School System where he was involved in the School Trans contract which is shown below. The internal audit found that John Britt left the board out of the loop when he increased SchoolTrans Inc.'s contract by $4.5 million in September 2002.” We investigated and got a copy of the Internal Audit Report mentioned above. Here are some of the pertinent facts. • In 2001-02 Memphis City Schools (MCS) began using SchoolTrans for medically fragile students because Laidlaw did not have air conditioned buses. • In July 2002, Mr. Roland McElrath (remember him, he resigned from the City and took a job with the MCS and also took with him a $32,000 immediate pension under the January 2001 pension resolution) negotiated a two year contract with School Trans along with Mr. John Britt of MCS. All buses by SchoolTrans were to be air conditioned and were to have basic medical staff in transit. Ten exceptional children were assigned to six buses at a contract amount of $652,428. • 34 days after the original contract was signed, Mr. Britt signed Addendum #2 which was written by Mr. Michael Jones of SchoolTrans and signed by both him and Mr. Britt but was not brought before the board as was previously agreed. This addendum specified that SchoolTrans had been directed to transport additional Specialized Exceptional Students increasing the minimum July 1, 2002 agreement by 15 additional buses. In addition, as also requested by MCS, SchoolTrans will be responsible for hiring nursing staff for all students requiring nursing at no more than $42.50 per hour (2 hour minimum) per bus per day. The terms of Addendum 2 would increase the benchmark amount of the original contract by $4,569,539. • Finding #1- Clearly, Addendum #2 required Board approval but it did not get its approval. Addendum #2 was invalid. • Finding #2- In February 2003, SchoolTrans was operating nine bus routes and carrying 21 students. On 2-16-03 SchoolTrans began invoicing the District for 21 buses and 21 CNA’s (Certified Nursing Assistants) per the agreement set forth in Addendum #2 which was never brought before the School board for approval. During an interview with Mr. Jones on 12-8-04, he was asked why MCS was being charged for routes not being operated. He stated SchoolTrans was contracted by buses, not routes. Mr. Jones contended that Addendum #2 gave SchoolTrans the authority to make buses available. He stated that SchoolTrans always billed by the benchmark number of the contract which he maintains was increases to 21 by Addendum #2. • According to the Audit, MCS should request $529,703 from SchoolTrans for buses charged but not actually operated and for all CNAs charges but not supplied since February 2003. • The cost per child was $207 a day in 2002-03. In 2004 the cost has dropped to $115 per day. And this is the team that is going to straighten out our city finances. Fat chance. Click here to go to a website to get a comprehensive timeline on Mayor Herenton's past financial decisions and his lies about the city's financial condition. September 2, 2005 The key to understanding the Memphis and Shelby County financial situation is an understanding of the extent of PAYMENTS IN LIEU OF TAXES (PILOTS). Watchdog is investigating this situation and reporting as we gather information. We reported last week on the PILOTS of the Shelby County Health, Education and Housing Facility Board. This week we are reporting on the Center City Commission (CCC) and their various PILOTS. First I want to credit Jeff Sanford and his staff for being the most open and receptive organization that we have dealt with. They have nothing to hide, they have been quick and complete in giving us what we asked for and they are honest. They believe in their programs and believe that they are good for Memphis and the downtown area that they encompass. But are their programs good for Memphis and Shelby County as a whole or are they especially good for those with downtown properties and holdings at the expense of the rest of the taxpayers. I don’t think anyone can prove that they are good for the taxpayers but it is undeniable that they have been good for the recipients of the PILOTS. In looking over the lists of the PILOTS, (current PILOTS, expired PILOTS that have been returned to the tax rolls and pending PILOTS) there are some points that stand out. • Look at the properties that started with a 25 year PILOT and then had a 15 year extension given to them to make 40 years with little or no taxes. • Look carefully at the beneficiaries of the PILOTS. Forty years seems a bit much. Even 25 years seems a lot. 10 to 15 years should be the norm and then only with conditions that make financial sense based on the benefits to be received in terms of wages, employment and taxes to flow from the development versus no development or a different development. We have shown below the various PILOT reports from the CCC and several pictures of properties receiving these PILOTS. Cleck here to see active PILOTS given by the Center City Commission. Click here to see what PILOTS have been returned to the tax rolls. Click here to see what PILOTS are pending and waiting for approval.   August 29, 2005 On Friday, August 27, 2005 Bob Patterson, the Shelby County Trustee, presented information that every Memphis and Shelby County resident should be aware of and be concerned about. It shows what is on the Shelby County credit card (read how much bonded debt we have). The figures should frighten every resident and make the voters of Shelby County want to change their political leadership in the City of Memphis and Shelby County. Elections of County Officials are next year (2006) and City Officials are the year after (2007). The figures shown below show that the bonded indebtedness of Shelby County is $3.1 billion dollars (not million but billion). Put on top of this that the bonded indebtedness of the City of Memphis is over $1 billion and growing. You, as a taxpayer, have a debt that you are legally responsible for of over $4 billion dollars. The bonded debt of the state of Tennessee is $1.2 billion dollars. Yes, Memphis and Shelby County has four times more debt than the state of Tennessee. What should we do? Vote most of these people out of office and replace them with smart and experienced business people who know how to run a business efficiently. Cut spending and particularly cut unnecessary capital improvement projects such as the light rail system and the riverfront development projects of the City of Memphis, cut PILOTS and tax abatements and lay off unnecessary public employees. Click here to see what your owe due to the spending habits of local City and County elected officials. August 24, 2005 Yesterday I got the definitive information on the contract between the City of Memphis and the Linebarger, Goggan, Blair and Sampson LLP contract to collect delinquent taxes for the City of Memphis. From April 1, 2004 to June 30, 2005 LGBS collected $29.2 million dollars and has been paid or is owed $5.58 million dollars, 19% of the collection. Keep in mind that Bob Patterson, the Shelby County Trustee, offered to collect these delinquent taxes for 2% or $586,000 dollars. Therefore, the City just blew $5 million dollars just when they announced that they were $10.3 million dollars short on the 2006 budget. This just after they raised taxes and told us everything was fine. What is going on here? Are they incompetent, stupid or is it another example of who you know is more important than the interests of the taxpayer. Gwen Hewitt, works in the Memphis Office of LGBS in Suite 2250 at #1 Commerce Square and she previously worked in Bob Patterson’s office and left and worked for the City under Sara Hall, the City Attorney, and then went to work for LGBS. I have attached a copy of the LGBS contract for your review and also a copy of the payment report from the City to LGBS. Click here to see where your tax money went instead of paying for cutting the grass and picking up the garbage. Click here to the contract that was hand delivered to Joe Lee before he left to do similar things to the MLGW. August 17, 2005 It has just come to our attention that not only do MLGW executives get car allowances but some of them also get their pension contributions paid by MLGW rather than contributing 8% from their salary like the rest of the MLGW employees. Yes , President Joe Lee (that is a $17,200 contribution for him) and all the Vice Presidents get this additional perk. And now Joe Lee has hired an additional Communications person (Janas Jackson) at $98,500 to tell the rate payers what a great job he is doing. She will be like Alice in Wonderland. Did you wonder about the 8 page insert in the Sunday edition of the Commercial Appeal from the MLGW? This bit of communications fluff cost $8100 plus the cost of labor and printing of the nearly 200,000 copies. In it were 7 pictures of Joe Lee III. What valuable information. They forgot to tell you that their JD Powers performance rating for the electric division was the lowest in the country whereas in the year 2000 it was the highest. Click here to see what you got for your money in the 8 page commercial appeal insert done by MLGW on July 24, 2005. August 16, 2005 Do you know what these acronyms represent? HCD, MHA, DPA, HARP, MHR, VHR, CHDO, BFF, RFL, ML, 108, SCG, RBC, HCV, RISE, SCIF, SHAPE, HOPE VI!!! The above acronyms are used by the Housing and Community Development Department of the City of Memphis and the Memphis Housing Authority. In short they represent your tax money (lots of it) being spent with little oversight and with little understanding of what they do. We are starting to investigate this whole area and will report to you on the results. We have already reported to you on the home that Ricky Peete’s grandmother is having built for her under the HARP program. Also 108 loans were used in the building of Peabody Place Development downtown. There is a lot of money being spread around but is it going where it is supposed to go and is it being accounted for? Click here to see some of the hcd/mha programs that you are paying for! August 22, 2005 I have figured out part of the reason why we depend almost entirely on residential property taxes in Shelby County. One good reason is the Shelby County Health, Education and Housing Facility Board. This board and a similar one for the City of Memphis can grant tax freezes to apartments in return for a promise to have some of the apartments available for low income residents. But is this in fact what happens? What is a fact is that millions of dollars in tax money has stopped flowing in to the City and County. Here are some examples. Trezevant Manor/Allen Morgan Health Center, 177 N. Highland. They pay zero taxes. St. Peter Manor, 108 N. Auburndale. In 2004 they paid $6,792 in taxes. Eastwood Apartments, 3007 Getwell. Sponsored by the CME Church. They pay zero taxes Raleigh Forest Apartments, 4183 Troost. Sponsored by the CME Church.They paid $35.15 taxes Sherwood Apartment, 3647 Rhodes. Sponsored by the CME Church. In 1995 they paid $22,908 to the County. In 1996 they paid $11,046 to the county. Thereafter they paid nothing. The Corners Apartments, 4150 Winchester. Sponsored by the CME Church. In 1996 they paid $30,616 to the County. Thereafter they paid nothing. Spring Creek Apartments, 2046 and 2020 Winchester. Sponsored by Cornerstone Housing Corporation. In 1996 they paid $12,700 to the County. Thereafter they paid nothing. Raleigh Woods Apartments, 4168 The Plac. Sponsored by the Foundation for Social Resources. In 2004 they paid $41.21 to the County. Cameron at Kirby Parkway Apartments, 3119 Kirby Parkway. Sponsored by the Cornerstone Housing Corporation. In 1996 they paid $106,479 to the County. Thereafter they paid nothing. Stonegate Apartments, 2791 Coleman. Sponsored by the Cornerstone Housing Corporation. In 1996 they paid $60,404 to the County. In 1997 they paid $31,739 to the County. Thereafter they paid nothing. Kirby Pines Estates, 3535 Kirby. Sponsored by Psalms, Inc. Currently appraised at $28,350,600.Currently paying $23,530 to the County. Countryside North Apartments, 6920 Reese Road. In 1998 they paid $61,692 to the County. Thereafter they paid nothing. Knightway Apartments, 4365, 4449, 4505, 4252 Knight Arnold. Sponsored by the CME Church. In 1998 they paid $59, 874 to the County. Thereafter they paid nothing. Charter Oaks Apartments, 4585 VAndergreen. Sponsored by the CME Church was acquired in 1998 and is subject to a PILOT. Parcel is currently appraised at $1,642,000 which would result in current Memphis taxes of $18,193 and County taxes of $23,251. Because the PILOT is based upon 50% of the actual 1997 taxes, Memphis will receive an annual PILOT of $7989 and Shelby County will receive $7939. Danville Apartments, 4427 Knight Arnold Road. Sponsored by the CME Church. In 1997 they paid $28,622 to the County. Thereafter they paid nothing. Lexington Apartments, 1654 Harbert. Sponsored by the CME Church. In 1997 they paid $5523 to the County. Thereafter they paid nothing. Hedgerow Apartments, 6905 Shelby. Currently appraised at $6.89 million. They would currently be paying Memphis taxes of $76,375 and County taxes of $97,606. Because the PILOT is based upon 50% of the actual 1998 taxes (prior to annexation by Memphis, they will be paying County taxes of $38,876. August 12, 2005 Take a look at this interesting story of how a parking garage and office space for the Grizzlies got built with Federal and State taxpayer money under the guise of a Memphis Area Transit Authority (MATA) intermodal transfer facility. And on top of that, the Grizzlies ended up with the profits on the parking facility. Two investigations are going on to try to figure out who was responsible for this scam. Click here to go to channel 24 website to see information on the FedEx parking facility scam that you paid for. August 5, 2005 Today I went to the MLGW board meeting at the Fogelman Executive Center at the University of Memphis. Very nice facility and I congratulate the MLGW board for moving it out of the downtown fortress and into the City where the ordinary folks can attend without a strip search to get into the building. I attended because on the agenda were the following two items. 13. Approval of Salary S-75542 (Requires City Council Approval) 14. Approval of Salary S-76804 (Requires City Council Approval) Item 13 had appeared on a February 2005 agenda but it was deleted at the last minute. At that time I asked the MLGW board who was S-75542. They refused to give me the information. This time I asked the board why the MLGW chooses to hide the names, salaries, job title and job description until the last minute. The public is entitled to know in advance. They gave no answer to that question but finally they did reveal that S-75542 was Janas Jackson to be hired as a Senior Communications Strategist and Advisor at $98,500.80 per year plus all the usual lush perks and benefits that amount to close to 50% of the base salary. Also S-76804 is the new general counsel and Vice President, Odell Horton Jr. at $159,500 per year plus, plus, plus. He is to replace J. Maxwell Williams who makes $185,549.28. You must remember that at the MLGW, there is a salary range for each job and that Mr. Horton, if his hiring is approved by the City Council, will no doubt be moving up without any increase in salary coming before the City Council or the MLGW board. The very competent City Attorney, Ms. Sara Hall, makes $115,706 per year. I question the need for another communication person as Ms. Jackson will assist Mark Heuberger ($116,802.72 plus car allowance of $11,570.00). Upon questioning by the board as to how many hours he works per week he, after some thought, said about 60 hours. He said that he is overworked and needed Ms. Jackson in addition to his present staff. It is curious because at the first of the meeting there was a presentation by Howard Robertson of Trust Marketing (hired by Mr. Heuberger) whose Company did a 500 person telephone survey of customers about their feeling about MLGW. The most significant result was that the most important factor in customer attitudes was actual performance, service and reliability, not advertising such as the recent expensive Sunday MLGW brochure in the Commercial Appeal. In other words, what you do is more important than what you say. Actions speak louder than words. I have no doubt that Ms. Jackson and Mr. Horton are well qualified but they both are coming in from outside and were selected over internal candidates, some with long experience and knowledge of the utility business. Mr. Lee has a big job ahead of him in correcting the independent and respected J. D. Power and Associates survey that shows the electric division score going from top of the heap in 2000 to the bottom of the heap in 2005. Mr. Heuberger can loosen his load by opening up the open records process and posting on the internet such things as salary, benefits, pension data, contract data, personnel policies, minutes of board meetings (they post the agenda but not the minutes) and other closely held information. The public has a right to know and they would not get so many open records requests if they opened up and became transparent. Then maybe he would not need another assistant. When the Mayor complained that he had to hire two extra lawyers to process all the open records requests, someone said that the answer was blindingly obvious, LAY OFF THE TWO LAWYERS AND GET OUT THE WAY OF THE PUBLIC’S RIGHT TO KNOW. DOUBLE DIPPING AT THE PENSION HOG TROUGH
August 11, 2005 As you remember in February of 2004, the Mayor vetoed a proposed ordinance (Ordinance 5038) that would have put restraints on his ability to load up the City with his appointees. The City Charter specifies some appointees and the figure of 102 is supposed to be the Charter approved figure. The Mayor and the City Council compromised and some of the over 400 appointees were given civil service status. That still left 281 eligible to retire under the January 2001 pension resolution allowing elected and appointed officials to retire after 12 years regardless of age and start receiving their pensions and health care benefits. In looking over the list in November 2004 of those who had already retired under the 2001 pension deal and were at that time costing $675,000 per year and would cost many millions in the future, some interesting names and retirement amounts jump out. Roland McElrath $33,110.16/year age 44, Danny Wray 28,844.40/year age 55, Mark Brown 32,212.56/year age 48, John Conroy 35,850.24/year age 59, Rick Masson 64,665.12/year age 51, Roland Wyatt 26,013.60/year age 51, Richard Eldred 39,389.52/year age 60, Robert L. Spence Jr 32,927.52/year age 47, Debra Brown 29,506.08/year age 50, Robert Bishop Jr 39230.64/year age 57. We have been following one of the above, Mr. Roland McElrath, since we found out when he retired from the City of Memphis he went to a six figure job with the Memphis City School System. There he was involved in the SchoolTran Contract which you can read about in an article date May 3, 2005 on memphiswatchdog.org website under todays news and mail. Then in 2003 he went to a new six figure job ($119,975.16) at the Memphis Housing Authority. In an open records request we asked if Mr. McElrath was still receiving his January 2001 pension payment and if he was working on a new pension. The answer was finally received on August 10, 2005 in a letter from Sara Hall, the City Attorney. It is shown below. Keep in mind that the Memphis Housing Authority is not supposed to be part of the City of Memphis but Robert Lipscomb, head of Housing and Community Development, is also head of MHA and receives part of his dual salary from MHA and the rest of it from HCD. But MHA is not part of the Memphis Pension System which allows Mr. McElrath to start dipping into another pension system and continue to receive his City of Memphis pension. August 10, 2005 Mr. Joseph Saino 6560 Kirby Forest Cove Memphis, Tennessee 38119 Dear Mr. Saino: Pursuant to your Open Records Request, regarding Roland McElrath's pension. Mr. McElrath is still receiving his City pension under the January 2001 Pension Resolution. As you are aware, Roland McElrath is employed by the Memphis Housing Authority, a separate legal entity from the City and their pension is not a part of the City's pension plan. It is my understanding that the MHA is a participant in the Tennessee Consolidated Retirement Systems(TCRS) and all MHA employees are enrolled as non-contributory participants. It is also my understanding that MHA employees do not contribute to the plan; however, MHA contributes 7.17% of the employee's salary to the plan for the employee's benefit. Our office has been informed that Mr. McElrath became a participant in TCRS in May 2003 and started out with zero (0) years of credible service. Finally, it has also been brought to our attention that Mr. McElrath was a participant in TCRS during his employment with Memphis City Schools, in which this plan was a contributory plan. When Mr. McElrath left MCS, he withdrew his contribution and this resulted in zero(0) years of credible service within the State pension plan. When he was hired by the MHA, he re-entered TCRS with zero (0) years of credible service. Sincerely, Sara L. Hall City Attorney  August 10, 2005 This letter shown above is particularly appropriate and timely as this new hire and salary will come before the City Council next week for a vote. It is hard to justify an additional $98,000 salary for another communications person when you see what is already in place. Remember that in the Sunday edition of the Commercial Appeal (July 24th, 2005) there was an 8 page insert (puff piece) with lots of pictures of Joe Lee and very little real needed information. I have asked for the cost of this piece and will publish the information when I receive it. The same information could have been conveyed in a billing insert. Also click below to go to Channel 13's news report to see two items about the MLGW concerning the hiring of Odell Horton Jr. as general counsel and the near riot concerning utility assistance. Click here to go to channel 13's website to see information on utility assistance and Lee's choice for general counsel. August 8, 2005 Here is an executive summary of the 1/2 million dollar study done by Marlin Mosby for the County Government. According to Mr. James Huntzicker "I don't believe there are any additional copies still available, but you could review a copy in our offices. If you would like to do this, please give Paula Lewis a call to schedule an appointment. Thank you. Jim Huntzicker Director Division of Administration & Finance" I plan to do this but I read through the executive report and on page 3 it is evident that more revenues will be needed over and above what is currently being collected. Mosby promised a savings of $385 million over 5 years whereas he has only promised a $50 million savings for the City. I do not think the City is more efficient than the county. Makes you wonder why more savings are not available from the City. Click here to see the Marlin Mosby PFM executive summary that cost the County $500,000. July 28, 2005 Memphis is world famous for barbequed pork. We have an event called the World Championship Barbeque Cooking Contest during our Memphis in May festival. But we also are the home of a lot of political pork and I recently got the facts on another championship piece of pork called the downtown rail system or trolley. I judged this to be first place based on the criteria of spending a lot of taxpayer money (over 100 million) with the least return, 1/2 million, and with a continuing stomachache of 4 million annual operating cost. Through an open records request I got the following facts about the investment in the three trolley systems (Main Street, Riverfront and Madison) and the continuing operating costs for these systems. • Main Street 34.9 Million City Portion 4 Million • Riverfront 9.4 Million City Portion 0.9 Million • Madison 60.0 Million City Portion 6 Million • Total City Investment in the three trolley systems 10.9 Million • Total Investment in the three trolley systems 104.5 Million • Yearly Operating Costs Paid by the City 3.9 Million • Yearly Revenue from the trolleys systems Not shown on financial statements but reported by MATA to be $553,136 for 2005. The problem here is that the City is unable or unwilling to turn down Federal and State Money and does not seem to care about the continuing annual operating costs as long as they get the Federal and State bucks. Barbara Swearengen Holt, a City Council member, said that if we turned down this federal money, we would probably never get any more. Well, with a deal like the one above, I would turn it down every time. But Ms. Holt is not alone, as the great majority of our current city council voted for this bad idea and has refused to cut out the even worse idea of the coming light rail system (it is currently in our CIP budget) which will make this one look like peanuts. Politicians don’t seem to care about bonded indebtedness as they will be long gone by the time the debt payments come due. How much more Federal and State largess can we stand? Below you can click on the City of Memphis 2006 CIP budget and see that the City intends to spend $280 million dollars through 2010 for the regional rail plan to run a light rail system from downtown to the airport. $70 million of this is City of Memphis GO bonds. There is no information on how much it will cost to run the system and what the projected P&L will be. This is another stupid idea in the name of getting Federal and State dollars. Click here to see what the Mayor and City Council have planned for you to spend on the light rail system.  August 1, 2005 During the dog days of summer, Joe Lee had nothing better to do then order the blocking of memphiswatchdog.org website from MLGW computers. What will be next? Control the media and control the world. See the blocking order and reply above.   July 27, 2005 We have been aware for some time that the Grandmother of City Council member Ricky Peete is having a house built for her as part of a government program that assists citizens to repair or rebuild their homes. As you can imagine, many people are interested in obtaining money through these programs and the waiting list is very long. Ms. Lizzie Jones, the Grandmother of Ricky Peete, used to live at 268 Bethel. Now she is having a house worth around $70,000 built for her at 500 N. 6th. Ms. Jones's old house was repaired under this program which would ordinarily disqualify her for further assistance. However, she somehow moved to the head of the line and is now having a completely new house built for her with her moving costs and storage costs paid in the meantime. We have showed above the old site at 268 Bethel and the new site under construction at 500 N. 6th. Also we have put a link from channel 24 with a video story of how Ms. Jones moved to the top of the list. Ricky denies any influence in this matter. Click here to see Jenny DiPrizio's great story on abc24,com July 11, 2005 We have been reporting for some time about the great salaries and benefits of City, County and MLGW employees. We have already published a preliminary salary and benefit comparison spreadsheet and this week we will publish the final sheet with all information filled in. We have given all political entities a chance to review and correct the information. The recent news reports about car allowances are not a surprise but it is typical of the way the City Council picks on one item and ignores the real problem which is the lush overall compensation and benefits that City employees enjoy as compared to the rest of the world (aka taypayers)that pays for these benefits. Another point that has been overlooked is that this car allowance as well as the salary is used to figure the pensions. Yes, I said car allowances are used to figure the pensions. I do not agree with the car allowance. What they are saying is that this is salary but they just called it a car allowance. If these people are worth $$$,$$$ as a salary plus a car allowance, then they should be paid the total as a salary. I think the best way to reimburse for car usage is to pay them by the mile and it would be up to them to keep the records and turn in their bills. Incidental car usage for top executive should be out of their pocket at their own expense. Managers and other people who are required to be out in the field a lot should be reimbursed on a mileage basis. Precipitous actions usually have unanticipated consequences. Here, if they take away the car allowances, we may have good experienced people with good technical skills (especially at the MLGW) retire and be replaced by inexperienced political cronies of the Mayor and Joe Lee. This will be because their pensions will be reduced if the car allowances are taken away thereby reducing their pensions. What needs to be done is to reduce the overall salary and benefit structure to make it more like the real world in Memphis, hire a few top notch people (and pay them appropriately) and let them manage this huge enterprise like a business, firing those that are incompetent and rewarding those who do a measurably great job. You could make a great start by laying off most of those appointed people who could qualify for the January 2001 pension retirement plan. July 21, 2005 In today’s Commercial Appeal (July 21, 2005) there is an article concerning the granting of yet more PILOTS (tax freezes) to companies promising all sorts of good things that they are going to do for Memphis. The biggest was for Jabil Circuit Inc.'s distribution facility in Southeast Memphis at 4880 Tuggle Road. The new jobs will pay a median annual salary of $21,340. The tax freeze will save the company 1.6 million dollars over six years. The other, American Coaster, will save the company $150,571 over seven years and will pay a median annual salary of $28,080. Have you wondered what is the average salary of City employees including benefits? According to the latest City of Memphis operating budget, it is designated as personal services and is $63,152.00 average for 5794 employees including fringe benefits. Benefits, over and above salary for the City generally run from 40 to 50 percent of salary. You can be sure that the two companies listed above do not pay benefits worth 40 to 50 percent. The contrast here is typical of private sector workers and taxpayers and public sector workers and politicians. July 25, 2005 There was an article in the Sunday, July 24th 2005, issue of the CA with the heading “Retirees get sweet deal on insurance, government jobs pay off in premiums”. This article pointed out things that we have been talking about on this website for some time, the fact that local government jobs are great jobs with better salaries and benefits than are normally available in the local private sector jobs. The article pointed out many problems ahead and mentioned a new government accounting requirement that will soon require governments to report their long term obligations associated with post employment benefits. The reason for the problem seems obvious as does the solution. Local governments generally allow retirement after 25 years regardless of age. This allows people to retire at age 50 to 55 and then start receiving their health care benefits with most of the premium cost paid by taxpayers. This should be changed to require those not eligible for medicare to pay a much higher percentage of this premium, if not all of it, to encourage them to not retire early and work on to a medicare eligible age like the general taxpaying public. This will keep experienced people working and hold down the numbers in the retiree population. This early retirement benefit is generally only available in the public employment sector and should be changed to make the public employee benefits more like the taxpaying private sector. July 18, 2005 I have finished my salary and benefit comparison spreadsheet and have given the City, The County, the MLGW and the two school systems a chance to review and correct any errors. I think it can be useful in trimming back some of the costs of government. Basically these are great jobs compared to private sector jobs. The real problem with the City is that it is run as a patronage job factory and not as a business. I think it could be run much more efficiently with the top jobs being filled with real professionals and with the Mayor’s job filled with someone who cares more about the taxpayers than he does about his supporters, his cronies and his business contributors. For the future, I think the pension system should be changed for future employees from a defined benefit plan to a defined contribution plan and more restraints should be put on PILOTS and other tax giveaways which mainly benefit the Mayor’s contributors. Another key problem is oversight or lack thereof. There is currently very little oversight on how and for what money is spent, particularly at HCD and MHA and when there is an audit it is generally done by someone who knows the outcome the Mayor wants in advance. Looking at the spreadsheet, the following are areas that could be looked at. Some MLGW salaries are too high but those jobs requiring high technical skills may be are worth it. If you start filling the MLGW with City Hall patronage types, they will certainly be too high. But then lookout, when the lights go out and no one knows how to turn them back on. The health care costs seem somewhat high compared to private companies considering the huge numbers in the groups. Vacations (5 to 6 weeks) are 1 to 2 weeks longer than private companies. Sick days for the City and County (30 days) should be cut back to 12 days like the others. Car allowances should be discontinued as they are really salary. If they are required to get and keep great employees, then they should be rolled into salary. All the various life and disability insurance benefits should be reviewed to see what they are actually costing and who is selling these policies. And finally, the appointed people, over and above what is authorized by the Charter, should be laid off. This, of course, does not touch the CIP budget items which desperately need to be removed before the bankruptcy notice is posted at City Hall and at the County. What can you, the taxpayer, do about the situation? You have the power to replace the Mayor and the City Council in October 2007. Replace them with people who care about this City and who want this City to return to its former beauty and safety. Look carefully at what they say and compare it with their public record. Most taxpayers want low taxes, good safe schools, their garbage picked up, the public parks cut and maintained, the public roads repaired and the parkways planted with flowers and the grass cut and the criminals taken off the streets. They do not care about trolleys, light rail dreams, basketball forums that few can afford or grandiose riverfront fantasies. Throw out the long serving, self serving politicians and replace them with good people who want what you want. Click here to see what great jobs these public service jobs are. July 15, 2005 Yesterday I sent a email to Carol Chumney and received a reply as shown below. The question is integral to the lawsuit recently announced by Larry Thompson. These questions must be answered. What ever happened to the City Council investigating MLGW Bond deal where the Mayor forced use of certain lawyers/finance people? I think Tom Marshall was to “lead”. Can you provide an update? Joe Saino They closed it down last fall without getting the answers to many of the questions. Here's a copy of my letter to Tom Marshall sent prior to the decision by his Committee to again shut the investigation down. Carol Chumney See below her letter to Mr. Tom Marshall. Click here to see Carol Chumney's letter to Tom Marshall asking questions about the Herentons, father and son.   July 8, 2005 Congratulation to Carol Chumney and to our website visitors. We have been harping for some time about City and MLGW car allowances and Joe Lee and his use of a Division car and his driver/bodyguard. Now, finally maybe something will be done. We show above two pictures of Joe Lee and his Division car used to drive him to the Racquet Club earlier in the year. In addition to his large car allowance, he is using a Division SUV and driver with no reimbursement to the Division for their use. July 6, 2005 Last night (July 5, 2005) I gave a speech to the SouthEast Memphis Betterment Association (SEMBA) which is a group of local neighborhood associations which are coming together to get a better hearing from the local politicians due to their increased numbers of members. My speech concerned my experiences since I filed an open records suit in Chancery Court to open up the public records in the City and subsequently in many other divisions of local government. Also it concerned my starting a local news website (www.memphiswatchdog.org) to publish the information that I have obtained from my open records requests. At the meeting was County Commissioner Mr. John Willingham. Mr. Willingham is the author of a proposal to create a 2.5% payroll tax, roll back other taxes, and create a gambling Casino at the Pyramid and other proposals. While I admit that I have not studied the proposals in detail, I certainly agree with Mr. Willingham about some aspects of his thoughts. He is for putting severe controls on the out of control PILOT program which favors those who are already rich and in least need of additional tax favors. He is for putting a damper on the out of control Capitol Projects that are driving the City and County towards bankruptcy. We both agree on more oversight and controls on many of the boards and commissions which are run by people such as Ricky Peete, Robert Lipscomb and John Elkington. He gave me a package of correspondence and proposals and I thought them important enough to publish them below. One very interesting one is his letter to Stan Meadows of the Grizzlies. Note particularly paragraph 1 of page 2. These are important proposals and worthy of a public debate. Click here to read Commissioner Willingham's letter to the Grizzlies to ask them to not oppose a solution to the Pyramid problem. Click here to read Commissioner Willingham's letter to the Memphis Flyer about his various tax proposals. July 5, 2005 Politicians have not shame. You probably read in the Commercial Appeal this morning about three Shelby County Commissioners begging for more money to pay Allan Wade to take their appeal to the higher courts to try to overturn a decision by 81% of Shelby County voters to put term limits on their offices. What a nerve. What a great deal for Allan Wade. Here is the information that we requested and found out about Allan Wade, a private attorney who is also the attorney for the City Council and also a City employee. We requested total payments for 2004 and 2005 to Mr. Allan Wade, an attorney in private practice who is also the attorney for the City Council and in addition does work for the City Administration. His salary at the beginning of 2004 was $65,000 which the Mayor raised to $80,000. In addition to that, he was paid $250,913.75 in 2004 and has received $165,446.93 in 2005 and we have three months to go yet. Don’t forget that in addition to his salary, he receives health benefits and is on the pension system. Hopefully the courts will turn down this outrageous appeal and in the future we can put term limits on our City Council which is badly in need of change. June 30, 2005 We received the following emails from some active and retired MLGW employees and it points out the sad reality at MLGW. We have never encouraged people to surf the internet when they are supposed to be working. However we see nothing wrong with doing that before or after work or during lunchtime. But be careful, BIG BROTHER IS WATCHING. MLGW has blocked your website from the computers at the company. Mr. Lee has some more folks he wants to bring over from the City but he has to get the company's nepotism policy changed. The City will have fewer employees but MLGW payroll will increase. And here is another email message we just received confirming the above message. "Just thought you'd like to know that your webpage has been blocked on the MLGW computers." July 1, 2005 We understand that next week there is to be a media blitz celebrating one year of the Joe Lee (aka Mayor Herenton's man) administration. There will be lots of propaganda and stories of the achievements of Mr. Lee and it will culminate at a food and drink party from 4 to 6 PM on Friday, July 8th at the Pyramid with all employees invited. The real question is what is there to celebrate? Some of the most experienced and well qualified people have left or been forced out and others are preparing to leave. The Mayor has not given up on his plans to integrate MLGW with the City Administration and this can only mean bad things for the MLGW. The atmosphere at the MLGW is bad due to Joe Lee's plans to do away with the anti-nepotism policy and his policy of hiring and creating jobs without the traditional job posting and testing procedures. And of course there is the question of what all this media blitz and party is costing? Maybe the Mayor is picking up the tab. June 28, 2005 Remember Mr. Roland McElrath. He is one of the many people who retired in March of 2001 with 12 years of service due to the stupid January 2001 pension resolution allowing elected and appointed officials to retire after 12 years regardless of age. Remember that 11 of the 13 current City Council members voted for that resolution. Well Mr. McElrath went to work for the City of Memphis School System as the finance and administration director at $116,000 per year plus the $33,110 pension mentioned above. At the City of Memphis School system he helped negotiate the infamous SchoolTrans contract shown on this website. On Today’s News and Mail read the article entitled “The Incredible Story of the SchoolTrans Contract”. Well Mr. McElrath is no longer with the Memphis School System but he landed on his feet again as the new Chief Financial Officer for the Memphis Housing Authority. We have written the following open records letter to the MHA asking about Mr. McElrath and other matters at the MHA and the HCD. When we get the answers we will publish them. June 27, 2005 Mr. Robert Lipscomb Memphis Housing Authority 700 Adams Avenue Memphis, Tennessee 38105 Dear Mr. Lipscomb, As a taxpayer of the City of Memphis I would like to inspect the municipal documents, records, letters and communications, both written and in electronic form, that contain information relevant to the following subjects. 1) Specifically I want to inspect the documents, records and communications that contain the names, job titles, salaries and car allowances of all the regular and appointed employees of the Memphis Housing Authority. Also I want to inspect the documents and records that show the years of creditable service towards retirement of the above employees. 2) Also I want to inspect the documents, records and communications that show the situation concerning Mr. Roland McElrath, who I understand is employed by the MHA as Chief Financial Officer/Deputy Executive of MHA. I want to inspect the records and documents that show if he is continuing to receive his pension under the January 2001 pension resolution while he is working at the MHA. I assume his salary will be shown in item 1, but if not, then I want this information. Also I want to know what his years of creditable service are at this point in his new employment and if he is entitled to a City of Memphis pension or some other pension system. Did his receipt of the January 2001 pension cancel his years of creditable service and is he starting out at zero in this new job? Did his time at the Memphis School System count on this new job? 3) I want to inspect the documents and records that show the source of revenues for the Memphis Housing Authority and the Division of Housing and Community Development for the fiscal years 2003, 2004 and 2005. Also I want to inspect the documents and records that show the projects for those years and how the money was spent and what contractors and individuals received the benefits of these expenditures. I trust that you will inform promptly whatever department and personnel are necessary to prepare these documents for my inspection. In accordance with your policy concerning copies and cost of copies, I may want copies of some or all of the documents. Since I assume also that the documents containing the information requested should be available readily on a computer, I should like to inspect the documents on July 5, 2005 at a time on that date which is convenient. If you need additional information or have questions about this request, I am available during working hours at 754-0699. Sincerely yours, Joe Saino 6560 Kirby Forest Cove Memphis, Tennessee 38119 June 27 Many people have emailed information to us on this website about situations in their City, County, MLGW, Memphis School System, County School System, HCD, MHA, IDB and other public jobs. They had information about things that should be investigated, things that were not fair in their employment situation such as promotions and job discrimination and things that were illegal. We have tried to investigate these situations through various means and verify the information. In many cases we have been successful and have published the information on the website. Now people have asked us to provide a way to communicate this type of information without revealing their names. We prefer to know who we are dealing with and we can assure everyone that we will hold the source of the information in absolute confidence. However people are afraid of losing their jobs if their names become public and we understand that fear. Certain organizations are paranoid about covering up what they do and will retaliate against a whistle blower if they know who it is. Therefore we have been asked to provide a way for you to send us information so that the sender’s identity is not known to us. This can be done in two ways. 1) From your personal computer or a public library computer go to our website (www.memphiswatchdog.org) and go to the CONTACT US button and then to the E-MAIL FORM. On this form you only need to fill in the first name, last name, city, state, zip and e-mail slots. None of this information needs to be your actual information in order for the email to come through to us. So if you want to conceal your real name, address and email address just fill in false ones. Do not use your work computer as the bosses might be checking. Then put your information in the comment section of the email form and send it. However we would like for you to use the same name each time so we can tell if it is from the same person more than once. If we need to get more information from you we will post a message to you on the website under E-Mail answers. Check this message board from time to time to see if we need a further communication. Also you can give us your private cell phone number and we can call after working hours. 2) Another way is the old faithful snail mail method. You can write an anonymous letter to Webmaster, P. O. Box 172301, Memphis, Tn 38187 and we will get your message. If you have a private P.O. box, let us know and we can respond if necessary or if you have a private cell phone number that you will share with us, we can call after working hours. The honest hardworking people who work for the various government entities deserve good honest government but they are not always getting it. We need to expose those that are not fulfilling the highest ethical standards. You can help in that effort. June 24, 2005 The US Supreme Court yesterday ruled on a case from New London, Conn that it was OK to use eminent domain for private purposes as long as it would increase tax revenues. This decision could have an effect on the plans of the Riverfront Development Corporation to spend millions in public money for their riverfront plans. The Friends for our Riverfront group will certainly oppose any such efforts. The opinion of most taxpayers in Memphis is that the Riverfront Development Corporation plans benefit mainly the downtown interests and that any development should be 100% private money if it is such a good idea. Take a look at what has already been spent and what the future plans are for using our tax money. Click here to see part of the future scheduled capital improvement budget expenditures on this riverfront development boondoogle. Click here to see the past and current approved spending of your tax money on the riverfront development plan. June 23, 2005 My name is Joe Saino and I was a member of the MLGW board from 1977 to 1983. I had the priviledge of serving with Jack Morris, George Cates, Pat Shaw and Eliot Whittington. Pat and Eliot have passed on but Jack and George are still very active and interested. I talked to Jack and George yesterday and asked them about the proposed merger of four departments of the City with MLGW as proposed by Mayor Herenton. They both agreed with me that this is a very bad idea and what needs to be done is to further separate the MLGW and the City and to make it a totally independent body like the Airport Authority which has operated very successfully, free of political influence, and with the best interests of the City and the taxpayers in mind. The Mayor and Joe Lee have not given up on this very bad idea of integration and have said that there will be millions of dollars in savings. However there is no proof of this and the best course of action is to further separate the MLGW and the City and keep the Mayor from using the Division for his own purposes which includes his fiscal rescue and the creation of a job bank for his cronies.  June 13, 2005 In a recent article in Business Week magazine (June 13, 2005 issue), there was an important article showing various comparisons between State and Local Government finances and benefits versus the private sector. Shown above are some important figures that they published. We are in the process of developing a comprehensive spreadsheet showing salaries comparisons between various top officials in the administration of the City of Memphis, Shelby County Government, MLGW, the Memphis City School System and the Shelby County School System. This is a huge project and we have completed part of it. We decided that it is time to publish part of it and over the next week or two we will finish the project and publish the complete list. What is undeniable at this point is that local Government jobs, benefits and retirement programs are great jobs and exceed private sector jobs for the most part. We are in contact with all of the above governments and have given them the opportunity to comment and correct all information that we have to this point. We ask for two things from anyone who reads this website. #1- Help us to correct the information that we have published. We have done our best to be accurate and true but we have had some difficulty in getting local cooperation from government, particularly from the MLGW. #2- Those of you in the private sector, please email us and let us know how your salary, benefits and pensions compare with what your taxes are paying for in the public sector. You must tell us who you are in your email but if you ask that you name not be used, we will respect your confidentiality. What we really want is your public or private sector information. We will publish your information without your name. Just describe your job responsibilities and pertinent salary, benefit and pension information and we will publish it. Our objective is to bring the public sector back to reality and to ask them to live in the same world as the taxpayers who pay their salary, benefits and pensions. In January 2001 the Mayor said that government service cannot and should not provide competitive salaries. Well look at the facts and you decide. We will look forward to your input. In the next week or two we will complete this spreadsheet and publish all the information, not only salaries but benefits and pension information. Thank you for helping in this effort to bring economic reality back to local government. Shown below is a partial copy of the full spreadsheet that we are working on. Click here to see part of the comparison information between the various branches of local government and what your taxes are paying for. June 22, 2005 Recently I received a letter from Ms. Sara Hall, the City Attorney. She sent me a lot of detail billings concerning miscellaneous professional services and legal services and court costs. The legal costs for the City continue to grow and Ms. Hall is making some efforts to get them under control. I have posted what she sent me below and this is what should be done on a regular basis, but on the City website, not on a private website. All this information should be available to the tax paying public. Notice the law firms that get the work and also notice that Allan Wade received $165,000 in payments from the City in the last 10 months and remember that he gets,in addition, work f rom the City Council and receives an $80,000 per year City salary plus benefits of 45 to 50 percent. What a deal. Click here to see how some of your tax money is being spent in the City Legal Department and who gets the bacon. June 15, 2005 HOW MEMPHIS AND SHELBY COUNTY PUBLIC EMPLOYEE SALARIES AND BENEFITS COMPARE TO PRIVATE EMPLOYEE TAXPAYER SALARIES AND BENEFITS We have thousands of City and County public employees and the great majority of them are talented, hard working and really good people. Then we have hundreds of thousands of private sector taxpayers who pay for the public services performed by the public employees. It is time that we take a look at what we taxpayers are paying to those public employees and see whether there are areas that can be cut to bring them to a more equal position with those that pay their salaries and benefits. We have posted below a comparison spreadsheet showing a cross section of public sector salaries and a comprehensive detail of benefits over and above salary. This involves the City of Memphis, Shelby County Government, MLGW, the Memphis City School System and the Shelby County School System. This is a huge project and we have only completed part of it. We decided that it is time to publish what we have and no doubt there will be errors and omissions. We are sending what we have to the various listed governments and are asking them to correct and fill in needed information. We ask the public to help also as shown below. What is undeniable at this point is that local Government jobs, benefits and retirement programs are great jobs and exceed private sector jobs for the most part. We are in contact with all of the above governments and have given them the opportunity to comment and correct all information that we have to this point. We ask for two things from anyone who reads this website. #1- Help us to correct the information that we have published. We have done our best to be accurate and true but we have had some difficulty in getting local cooperation from government, particularly from the MLGW. #2- Those of you in the private sector, please email us and let us know how your salary, benefits and pensions compare with what your taxes are paying for in the public sector. You must tell us who you are in your email but if you ask that you name not be used, we will respect your confidentiality. What we really want is your public or private sector information. We will publish your information without your name. Just describe your job responsibilities and pertinent salary, benefit and pension information and we will publish it. Our objective is to bring the public sector back to reality and to ask them to live in the same world as the taxpayers who pay their salary, benefits and pensions. In January 2001 the Mayor said that government service cannot and should not provide competitive salaries. Well look at the facts and you decide. We will look forward to your input. In the next week or two we will complete this spreadsheet and publish all the information, not only salaries but benefits and pension information. Thank you for helping in this effort to bring economic reality back to local government. Click here to see salary and benefit comparisons between various taxpayer supported local government bodies. June 11, 2005 Recently I published on this website a copy of page ISF-2 from the 2006 City of Memphis operating budget titled HEALTH INSURANCE. I pointed out that the FY 2004 actual total operating expense was listed as $31,598,000. The 2006 Proposed Total Operating Expense was listed as $83,144,000, an increase of 163%. I asked what was going on. No one on the City Council or the Administration knew and what is worse, no one seemed to care. I went to the library and did some research and came up with the following figures. Operating Budget FY 2001 Total Oper Expense FY 1999 Actual $37,279,172 Operating Budget FY 2002 Total Oper Expense FY 2000 Actual 34,618,642 Operating Budget FY 2004 Total Oper Expense FY 2002 Actual 50,071,716 Operating Budget FY 2005 Total Oper Expense FY 2003 Actual 65,781,221 Operating Budget FY 2006 Total Oper Expense FY 2004 Actual 31,598,000 Operating Budget FY 2006 Total Oper Expense FY 2006 Proposed $83,144,000 Who is keeping these books? Mickey Mouse. We have a real problem here and their only answer is to raise taxes. We need to clean house. June 10, 2005 In response to a recent website posting, I received the following letter and information which was also sent to the board of Commissioners of the MLGW. Several things are interesting about this communication. Ms. Terrencelyn Johnson was hired from the City of Memphis to fill the post of Executive Administrative Specialist under Joe Lee at a salary of $62,000/year. She formerly worked at the City of Memphis as coordinator of retirement for $50,647.48. Here are the following points. • Ms. Johnson’s job description asks for an associate degree in business administration and a certified professional secretary/certified administrative professional (CPS/CAP) rating is preferred. This was ignored. • Mr. William’s job description asks for a BA in business administration with a major in statistics or mathematics with a four year experience in statistical analysis. His resume does not indicate this. • Ms. Johnson was not tested. • Take a look at the organizational chart and the true number of positions under the “Office Staff” heading. Mr. Lee did not detail five people that the writer has filled in so that you can now see how many people he has employed in his office staff. • Mr. Heuberger did not provide the employee resumes when I asked for this open records request. True, I did not specifically ask for this but this has been the history of MLGW open records requests, they do not give you anything but what you ask for and recently they have not done that. This whole situation cries out changes and resolution. The MLGW board must take some action and demand that the MLGW open its records to the public and provide transparent administration and post all records, salaries, contracts, benefits, personnel policies so that the public has confidence in its operation. Hiding the ball is not good management. Click here to see the letter from this concerned employee with attachments. June 8, 2006 PROPERTY TAX INCREASE I went to the extended City Council meeting yesterday and it was not pretty. The Mayor recommended a 54 cent increase but we ended up with a 27 cents increase. The base rate of 3.2304 was first reduced to 3.16 (only a 2.8% decrease whereas the assessment increase since the reassessment was 11.5%. Apparently the law allows the current rate to be reduced less than the assessment increase due to possible future appeals for appraisal reductions). The 3.16 rate was then increased by 27 cents to 3.43, a 6.1% increase. If you include the the full 11.5% assessment increase, the true increase in property taxes was 18.2%. The Council vote was 7 to 6 which was interesting. Voting for the increase were Ford, Jones, Holt, Hooks, Lowery, Mitchell, Peete and Jones. Voting against it were Chumney, Sammons, Brown, Marshall, McCormick and Taylor. The entertainment was furnished by the Trio of Mayor Herenton singing with Janet Hooks and Tajuan Stout Mitchell singing their favorite song, WE AINT GOT NO SPENDING PROBLEM, WE GOT A REVENUE PROBLEM. The words go as follows. We need more tax money So we can buy more honey Our task is to make more city jobs And shut our ears to taxpayer sobs So get your checkbooks out quick Write out a check and don’t be sick We’ve been here for ever and a day And expect the voters to keep it that way. AN EXPLANATION OF THE REAL FACTS ABOUT THE 2005 REASSESSMENT AND THE PROPOSED PROPERTY TAX RATE INCREASE All Memphis and Shelby County taxpayers need to know the facts and the politicians do not want you to know what the facts are. Here are the new 2005 appraisal and assessment values for Memphis and Shelby County and also the 2004 values. Memphis 2000/2004 Appraisal $30,376,550,800 Assessment $9,209,184,475 Memphis 2005 Appraisal 34,027,872,400 Assessment 10,271,295,285 Percentage increase 11.5% Shelby Cty 2000/04 Appraisal $49,186,097,700 Assessment $14,275,258,065 Shelby Cty 2005 Appraisal 55,847,323,500 Assessment 16,186,834,175 Percentage increase 13.39% State law requires the City and the County to reduce the current tax rate by the percentage of increase in the assessed values shown above so that the tax pot does not increase due to the increase in assessment due mainly to inflation over the 4 year period from the previous reassessment. Therefore the City tax rate should be reduced from $3.2304 to about $2.90. The county tax rate should be reduced from $4.04 to $3.56. Mayor Herenton has proposed a 54 cent tax increase which I assume would be over the reduced rate required by State law. However politicians like to hide the ball and confuse the tax payers so we have to be clear about whether the increase is over the mandated reduced rate or not. If it is then this is an 18.6% increase. If it is on top of the 11.5% increase in assessed values, then it is a 30.1% increase. The same reasoning applies to the County. Keeping the politicians honest is a tough job as we all know.  June 6, 2005 I have shown above a letter I just received from Mark Heuberger, director of Corporate Communications at MLGW. It is interesting that the very same day I also received a response from Mr. Jim McKay of the Shelby County Government who responded completely to my request and said that I was free to call and ask any questions about his response. I was recently asked to give a grade concerning openness and cooperation to the various governmental organizations from which I have sent open records requests. They are as follows. Shelby County Government A Memphis City Schools B City of Memphis B (after having to file suit in Chancery Court) MLGW D minus There is an atmosphere of fear and the feeling that they have something to cover up. Mr. Heuberger's assertion that a charge for preparing public records information is legal is untrue. What is much worse is their attitude and their desire to reveal as little as possible and to cover up. Makes you wonder what they have to hide. I have shown below my open records request concerning the benefits spreadsheet to the MLGW and other local government organizations and a copy of the answer I got on a similar request from Shelby County Government with the answers hand written in. Why is MLGW afraid to let me talk directly to their benefit people? You decide. Click here to see the Shelby County's reply to my open records request because they have nothing to hide. Click here to see the government benefit comparison spreadsheet (partially completed) so that the taxpayers can see and know what their taxes are paying for. June 4, 2005 Carol Chumney held a meeting today at the Memphis Public Library to discuss the 2006 City of Memphis Budget. This will be voted on next Tuesday and I encourage everyone to go to the City Council Meeting at 3:30 PM and put in your thoughts on a property tax increase. Let them know how you feel about this budget and their performance. I have attached a spreadsheet that shows the salary and job titles of those who work for the City making $60,000 or more. There are plenty of ways to cut the budget but most of the members of the City Council are not listening. Let your voice be heard. Click here to see who is making $60,000/year and over at City Hall. June 3, 2005 Here is an email from the owner of Freddie who was shot by an unknown policewoman recently. See the full story and picture below. June 3, 2005 They shoot dogs........don’t they ????????? This letter is addressed to the female police officer who responded to a home alarm on May 23, 2005 at 9:00am & who shot our seven-year-old female chocolate lab that is as friendly and gentle a pet as a family could every want. A puppy that is loved and who loves in return. A puppy, wearing a collar, whose only fault was barking and being home alone in a yard with an electric fence. To you, name unknown officer of the law, since the report was denied us on request, were you so untrained in canine behavior, that you shot twice, and were you so untrained in the use of a gun that you missed such a large and dangerous target with your second shot? Were you so afraid even though other officers accompanied you? Were you so afraid and uncaring that you did not seek out this animal to see if she was dead or alive? Were you so terrified that you left the scene without a word of regret or an "I'm sorry" to the family members who rushed to the scene? Were you so terrified you could not help them locate this ferocious animal to see how badly she was wounded or indeed dead? Is today the first time you have learned that she is alive with bone grafts and pins holding her leg together, and that she is on morphine for pain? Perhaps you should go back to the Police Academy to practice the use of pepper-spray or a stun gun when faced with a barking well-loved family pet. Perhaps they could teach you enough courage to face the family with your own story of how terrified you are of barking dogs in their own yards. Perhaps they could teach you some compassion when you think it has been necessary to cripple or kill any living thing. This dog will live with thousands of dollars of treatment and maybe with time, will be back to her old self. Is that a matter of concern to you? I don’t think so! Name: Anne Uhlhorn Broadfoot 678 South Willett Street Memphis TN 38104 Phone: 276-5742 - Day or Night 484-1711 – Cell Email: aubfoot@bellsouth.net June 2, 2005 We have been going over the City of Memphis Operating Budget with some care and we came across the page shown below under health insurance. Please note that the claims incurred in 2004 were $31 million. The claims incurred in the 2006 proposed budget are $77 million, an increase of over $46 million dollars. Perhaps there is a reasonable explanation for this and we have asked the City Attorney and Carol Chumney for one but no answer as of this date. Stay tuned for further news. Click here to see health insurance cost from the 2006 Proposed City Budget. JUNE 1, 2005 TERM LIMITS FOR THE TENNESSEE LEGISLATURE AND THE CITY COUNCIL In Tennessee, voters don't enjoy the rights of initiatives and referendums. Perhaps a legislature more subject to democratic competition would be more reflective of the sentiments of the people, and less likely to go along with a push for a state income tax and less inclined to take bribes. The Tennessee Constitution makes it nearly impossible to put term limits on the Tennessee State House and Senate. However we have term limits on the Governor and locally we have term limits on the County Commission. We can get term limits on the City Council if we vote for a majority of Charter Commission members in favor of term limits and other changes in October 2007 and then vote for term limits when their recommendations come up for Memphis City voter approval in 2008. The recent scandals concerning our Tennessee Legislature points out the benefits of no long term state senators and representatives. The long serving (and self serving) Memphis City Council members points out the need for term limits on these people. We can do term limits on the City Council with the help of Memphis voters. Term limits for the Tennessee Legislature is another matter as you will see from the provisions of the Tennessee Constitution below. Our founding fathers made it very difficult to change the rules and we have no provisions for voter initiatives on this subject for the Tennessee Legislature. We need a Constitutional Convention to propose voter initiatives as many other states have and we need term limits on our State Senators and Representatives. Click here to see the provisions of the Tennessee Constitution that make it very hard to get voter initiatives and term limits. May 26, 2005 Here's the story if you missed part of it on TV. Click here to read about arrests of local and state politicians. We believe there is much more coming locally.  May 27, 2005 This is one of the most heartbreaking stories I have ever heard. It shows the lack of training and lack of common sense of our police department. I show below an email from the owner of the victim. NOT ONLY ARE WE LETTING THE WEEDS GROW AND GET OLD ENOUGH TO BEAR SEEDS SO IN A YEAR OR SO WE WILL BE KNOWN AS THE "CITY OF WEEDS" ,BUT WE ARE KILLING OUR PET DOGS WHEN THE POLICE OFFICERS GO TO ANSWER AN ALARM. I THOUGHT MAYBE THIS MIGHT HAVE BEEN JUSTIFIED BUT SINCE IT HAPPENED PEOPLE ARE CALLING ME TO TELL ABOUT THEIR DOGS BEING SHOT UNDER THE SAME CIRCUMSTANCES. I HAVE HIRED A LAWYER TO HELP ME STOP THESE SHOOTINGS. IF YOU HAVE A DOG AND YOUR ALARM GOES OFF THE POLICE MAY COME ON TO YOUR PROPERTY AND SHOOT ALL OF YOUR DOGS WITHOUT ANY JUSTIFICATION. I'M VERY LUCKY, FREDDIE WAS SENT TO THE VET AND AFTER HER OPERATION COSTING AT LEAST $2,500 THE DOCTOR SAYS SHE HAS A GOOD CHANCE OF RECOVERING TO 95% OF THE WAY SHE WAS BEFORE. FREDDIE WILL NEVER BE THE SAME AFTER THE SHOCK SHE HAS BEEN THROUGH. AFTER THE OFFICER SHOT FREDDIE IT WASN'T 2 MINUTES BEFORE MY HOUSE WAS COVERED WITH POLICE OFFICERS . SOME DIDN'T HAVE UNIFORMS. I GUESS THEY WERE TRYING TO COVER FOR THEIR FELLOW OFFICER BECAUSE I TRIED TO GET A COPY OF THE POLICE REPORT AND WAS TOLD I COULD HAVE IT IN A FEW DAYS. THE THING THAT BOTHERS ME ABOUT OUR POLICE OFFICERS IS THEY DIDN'T SEEM TO CARE. MY BROTHER IN LAW ASK WHERE FREDDIE WAS AND THE OFFICERS SAID SHE WAS IN THE BACK YARD TO THE RIGHT. WELL AFTER LOOKING FOR A WHILE HE FOUND HER ON THE OTHER SIDE OF THE YARD HIDING UNDER SOME LEAVES. HE JUST FOLLOWED THE TRAIL OF BLOOD, IT'S A WONDER SHE DIDN'T BLEED TO DEATH. THE OFFICERS DIDN'T OFFER TO HELP OR SAY THEY WERE SORRY IT HAD TO HAPPEN. MY THANKS GOES OUT TO THE ANIMAL SHELTER PERSON THAT HELPED CALM FREDDIE DOWN. Walter M. Broadfoot Jr. May 25, 2005 Proposed property tax increases, both City and County, are much in discussion now. Therefore we have gone to the website of the Tennessee State Comptrollers Office of the Treasury to get some recent facts. The figures shown below give the 2003 Total Tax Assessment of the Property to be taxed, the Total Taxes billed, the population of the various counties listed, the County Tax Rate, The City Tax Rate, The Total Tax Rate and the Weighted Average Effective Tax Rate (WAETR). This latter figure give you a measure of your tax burden compared to other cities and counties. You will see that Memphis, at 2.17 is the highest in the state. Nashville is 1.38. Another important fact is the real property values (market values) for the taxable property. This figure is $52 billion for Shelby County and $45 billion for Davidson County. Davidson County has a population of 569892 and Shelby County has a population of 897471. It is obvious that Shelby County is a poor County, yet under the leadership of our local politicians we are trying to live like the rich counties (e.g. FedEx Arena, Riverfront Development Corp, Light Rail Project and on and on). We need to live within our means, not finance the fat and inflated budgets proposed by Mayor Herenton. Click here to see how Memphis and Shelby County compare with other Tennessee cities and counties. May 21/22,2005 Weekends are a good time to relax and read an article and think. I recommend an article that was listed recently in a letter to the editor in the CA. It was entitled "Folly of the Forum". Were we sold a bill of goods about how good the new FedEX Arena would be for Memphis? What do we do now with the $32 million dollar stainless steel elephant? Click here to read an article written in the Regional Economist, the quarterly of the Federal Reserve Bank of St. Louis, title "Should Cities Pay for Sports Facilities?" Click here to go to the Money Matters button and read further about the Arena financing. May 20, 2005 Mayor Herenton is much in the news today with his smoke and mirrors idea of consolidation and all the money it would save. He is trying to keep the voters eyes off what a lousy record he has made in his 14 year as Mayor. And lets not forget about his record as head of the Memphis School System, the worst in the state. Since this subject was much in the news today with Senator Mark Norris's plan for special school districts, I have posted below an excellent article written last year by Mr. David Pickler, Chairman of the Shelby County Board of Education. The Shelby County School System has done a much better job with less money than the Memphis School System. The article explains why consolidation is not a good idea. Click here to read why school consolidation is not a good idea. Click here to go to the Shelby County School System page to learn more about your schools May 19, 2005 Shown in the pdf file below is the comparison between the property tax rates for the various tennessee cities and counties. You will see that Memphis and Shelby County lead the list with the highest rates. Click here to see how Memphis and Shelby County compare with other Tennessee Cities and Counties. May 18, 2005 I recently read an article in the CA written by Paul Kovacs who is a member of the Germantown Economic Development Commission. He wrote about the tax income we have lost in Shelby County due to the wholesale granting of PILOTS (payments in lieu of taxes) to local businesses. He said that instead of a 3 or 4 to 1 multiplier that would make sense in the granting of pilots, it was more of a 1 to 1, one dollar of tax relief equaling one dollar of extra profits for the grantee of the pilot. He raised some interesting points and I did some of the same research and found out some interesting facts. I have put below a spreadsheet that shows the pilots for the year 2002 and shows what the firms paid in frozen taxes and what they would and should have paid had they paid at the same rate as other business firms not receiving pilots. The information is from the State Comptroller's Office and concerns the 2002 report on Pilots and their effects. The tax loss for Shelby County is $53 million for that year. There are some interesting names on the list which you will recognize. Also I have listed the same information for Davidson, Hamilton, Knox, Madison and Williamson counties and you will see the contrast with Shelby County. No wonder our property taxes are so high. Shelby (Memphis) 53 million lost to pilots Davidson (Nashville) 0.78 million lost to pilots Hamilton (Chattanooga) 7.62 million lost to pilots Knox (Knoxville) 0.0 lost to pilots Madison (Jackson) 2.04 lost to pilots Williamson (Franklin) 0 .28 lost to pilots Here are the designations of the column headings for the spreadsheet shown below Column headings are defined as follows: LESSEE - indicates the business presently leasing the property. PROP VALUE - is the lessee's estimate of the fair market value of the property. PILOT/CI - is total payments in lieu of taxes paid by the lessee for the reporting period to a city. PILOT/CO - is total payments in lieu of taxes paid by the lessee for the reporting period to a county. TAX/CI - is total taxes that would be due the city if the lessee owed taxes based on the fair market value of the property. TAX/CO - is total taxes that would be due the county if the lessee owed taxes based on the fair market value of the property. Click here to see who got the bacon while the taxpayers got the shaft. May 17, 2005 You probably read in the morning CA about no agreement between the Memphis School Board and the Shelby County School Board on some method of getting around the stupid ADA (average daily attendance) formula that is bankrupting Shelby County. This is a very complicated matter and is further complicated by state laws that tie the hands of local officials and Federal unfunded mandates that cost millions and don't make sense. Also local incompetant politicians don't help. Click here to go to the Shelby County School System Page May 13, 2005 Several years ago the Memphis City School system contracted with MGT of America for a comprehensive report on ways to save money in this huge system. The Memphis City School system employs over 16,500 people, the second biggest employer in Shelby County. Their 2005/2006 budget is 785 million but their revenue projection is 773 million. The City of Memphis contributes 81 million to the System. This MGT report, which cost $575,000, states "Based on recommendations that have quantifiable savings, the five-year net savings (after one-time costs) total over $114 million. It is important to keep in mind that these savings should be redirected to meet student needs identified by Memphis City Schools." We have studied the report and the MCS response to these recommendations and have listed in the attachment the biggest saving items and the responses. Item 9-5 showed a projected savings of 69 million but was rejected as educationally unsound and a hardship to students, parents and staff. Item 5-11 showed a projected savings of 11 million and was accepted with conditions. The answer stated that it was considered questionable until review completed. Item 5-35 projected a savings of 4 million but the answer was no action yet. Item 7-36 projected income of 4 million but was rejected until further study. Item 9-11 was accepted but this is a problem with all government contracts, the change order rate on new construction. City construction contracts have a bad history of running over budget with an initial price within budget in order to get it passed by City Council and then change order after change order to get what they really wanted initially. This is when the price balloons. Item 9-10 with a projected savings of 2 million was rejected. This would implement a 15% reduction in space standards for high schools and a 10% reduction in the space standards for middle schools. Many people point to the palaces that the schools system is building which cost up to 50% more per square foot than the southern standard. One reason this was rejected was that it would require approval of the Board of Commissioners. The City School Board is a major part of the problem with our school system. Click here to see the savings recommendations and action. May 12, 2005 There are 34 workforce develpment specialists and some or all of them work for Yalanda McFadgon who makes $70,040.36 per year. Do you remember Ms. McFadgon? McFadgon, a former police sergeant and head of Herenton's bodyguard detail, served five months in prison in 1999 for concealing $70,000 in drug-dealing proceeds, interfering with a federal search and conspiring to interfere. The mayor was criticized for hiring her in the $34,900-a-year city job as a workforce development specialist in 2000. She now earns $70,040.36 as the program's director. She in turn has hired part or all of the 34 Workforce Development Specialists at a cost of about $1,360,000 per year plus 40% in benefit costs. Click here to see what a $40,000 per year workforce development specialists does. May 10, 2005 We just collected some new information from the City Attorney (Ms Sara Hall) in response to our most recent open records request. We are still analyzing the information but we must say that Sara Hall is doing a great job as City Attorney and is most responsive to our open records requests. She is in the process of reorganizing the Legal functions of the City, reducing staff and attempting to do the most efficient job in the face of an increasing litigious society. More will be reported later on this reorganization. What is outrageous are the following bills submitted and paid for by our tax money. We requested total payments for 2004 and 2005 to Mr. Allan Wade, an attorney in private practice who is also the attorney for the City Council and in addition does work for the City Administration. His salary at the beginning of 2004 was $65,000 which the Mayor raised to $80,000. In addition to that, he was paid $250,913.75 in 2004 and has received $165,446.93 in 2005 and we have three months to go yet. Don’t forget that in addition to his salary and his legal bills, he receives health benefits and is on the City's pension system. Shown attached are two of his bills in 2004. One is for $41,584.75 to get the payroll tax on the November 2004 ballot at the request of the City Council (which was defeated) and the other is for $23,632.25 to fight the Charter Commission vote in Chancery Court and in the Appellate Court. Ms. Sara Hall was also involved in this effort and her time and cost is not included in the bills. The vote on the Charter Commission, due to their efforts, was put off until October 2007 even though over 30,000 tax paying citizens signed a petition to have the vote in 2004. You must remember that they used your tax money to fight your wishes. They put a proposed payroll tax on the ballot and kept a Charter Commission vote off the ballot. Is that fair? Doesn’t it make you mad? Click here to see Allan Wade's bills May 7, 2005 We like to hear from employees of MLGW, both active and retired. Here is an email from a former employee commenting on the A&L situation. "I have spoken with several MLGW employees and some retired folks and have been told Mr. Lee plans to do away with A and L contractors. I don't really care if he changes contractors but he is talking about hiring MLGW employees to replace the work the contractors do. At the present time the company only has 8 gas welders for the whole company and not all welders can weld on gas lines. Gas is governed by the Federal Department of Transportation and with very strict rules and regulations to which people have to been trained. I have some thoughts on why he is doing this. We can't met the needs requested by contractors and will be behind during the busiest time of the year. That will make the company look bad, houses can't be finished if we can't get the utilities to the folks. I don't know how on paper he can show a savings when you have to train folks with manadorty drug testing for all these new hires and commerical driving licenses. I think it’s just another way to reduce the service to the customer and will put the company in harms way if someone blows something up. Remember Owens Lumber Company on Summer that blew up a few years ago. I certainly do. I retired from the Saftey Dept in 1999 after working for the company for 28 plus years. I have made many calls for gas explosion and carbon monoxide and you can't just take John Q Citizen off the street and turn them into a trained gas worker in a few weeks. > >I appreciate what you are trying to do and I read your web site. > >Thank you, >Mrs. Frankie Brown >MLGW retired" May 6, 2005 Political ethics are very much in the news today what with John Ford, Tom DeLay and others. The Tennessee legislature has recently upgraded its own ethical standards and we feel that it is about time for the Memphis City Council and other branches of local government to do the same. The new state ethics law applies to county and city governments also but we need to change our own local ethics laws in the City and County Charters to apply to local situations. Recently during our open records request to the Memphis City School System, we obtained a copy of the O.T. Marshall contract for the Central Nutrition Center dated December 12, 2000. It was for $630,500. We also obtained an agreement dated July 23, 2003 for E.F.S. (Educational Facilities Solutions, A Joint Venture with Tom Marshall as a managing partner) for Construction Consultant Services for $600,000. Additionally we obtained a payment print out for EFS starting in 2003 to 2005 for $2,729320.45. Also another one for Self Tucker Architects (Jimmy Tucker is also a managing partner of E.F.S.) starting back in 1998 to 2003 for $563,984.08 and yet another for O. T. Marshall starting in 1998 to 2003 for $1,903,797.98. The city council provides more than $80 million funding for city schools. Whether a council member (Tom Marshall) recuses himself or not, we do not believe that anybody would think it is not a conflict of interest for a council member to be doing business at any level, much less these huge amounts, with any "customer" that is so dependent upon the council's actions. Even upon voting recusal, such a member can have great influence on other members. Marshall is the senior member of the council (19 years), and, as such, is bound to have great influence on other members. If Councilman Joe Brown's janitorial firm had the cleaning contract with city schools, but recused himself from school votes, we'd think that stinks. Where's the difference?. Does this pass the smell test? May 5, 2005 As we analyze more and more information from the Memphis City Schools, the MLGW, the City Administration and the County Government, we see differences and similarities. We are working on a spread sheet to compare salaries and benefits so the public will get a total picture of the cost of our local tax supported government. It is a massive job. In the meantime, while this work is underway, we will report bits and pieces as they are reported to us. For instance, the Memphis City School System has car allowances but at this point we cannot give you the names or the job titles. The amount is $162 every two weeks for a total of $4212 per person per year. 28 people receive car allowances. This is far less per person than the MLGW and the City Administration. The County does not give car allowances. There are over 16,500 employees in the Memphis City Schools. The teachers work for 10 months during the year but their pay is uniform every two weeks during the 12 months. The cell phone bill for the period March 2004 to March 2005 was $238,462.97. Before Dr. Johnson took over, there were some 600 paid for cell phones. That has now been cut down to 320, as before it was somewhat out of control. More will be reported in the future about this huge educational establishment. May 4, 2005 Someone has gone crazy at City Hall concerning MATA and the proposed regional rail plan. They are proposing to spend over 70 million over the next five years for a regional rail trolley plan that is probably already losing millions. Take a look at the MATA Regional Rail Plan sheet from the 2006 CIP budget. We cannot afford a losing project like this. Also, where are the P&L figures for the light rail projects to date? Also the total investment of City money to date? What is the City hiding? Click here to see this money losing proposed project. May 3, 2005 A recent article stated the following. “A Memphis school official bypassed school board approval three years ago when he gave a $5.2 million contract to a company that buses special education students, according to an audit made public Tuesday. The internal audit found that John Britt left the board out of the loop when he increased SchoolTrans Inc.'s contract by $4.5 million in September 2002.” We investigated and got a copy of the Internal Audit Report mentioned above. Here are some of the pertinent facts. • In 2001-02 Memphis City Schools (MCS) began using SchoolTrans for medically fragile students because Laidlaw did not have air conditioned buses. • In July 2002, Mr. Roland McElrath (remember him, he resigned from the City and took a job with the MCS and also took with him a $32,000 immediate pension under the January 2001 pension resolution) negotiated a two year contract with School Trans along with Mr. John Britt of MCS. All buses by SchoolTrans were to be air conditioned and were to have basic medical staff in transit. Ten exceptional children were assigned to six buses at a contract amount of $652,428. • 34 days after the original contract was signed, Mr. Britt signed Addendum #2 which was written by Mr. Michael Jones of SchoolTrans and signed by both him and Mr. Britt but was not brought before the board as was previously agreed. This addendum specified that SchoolTrans had been directed to transport additional Specialized Exceptional Students increasing the minimum July 1, 2002 agreement by 15 additional buses. In addition, as also requested by MCS, SchoolTrans will be responsible for hiring nursing staff for all students requiring nursing at no more than $42.50 per hour (2 hour minimum) per bus per day. The terms of Addendum 2 would increase the benchmark amount of the original contract by $4,569,539. • Finding #1- Clearly, Addendum #2 required Board approval but it did not get its approval. Addendum #2 was invalid. • Finding #2- In February 2003, SchoolTrans was operating nine bus routes and carrying 21 students. On 2-16-03 SchoolTrans began invoicing the District for 21 buses and 21 CNA’s (Certified Nursing Assistants) per the agreement set forth in Addendum #2 which was never brought before the School board for approval. During an interview with Mr. Jones on 12-8-04, he was asked why MCS was being charged for routes not being operated. He stated SchoolTrans was contracted by buses, not routes. Mr. Jones contended that Addendum #2 gave SchoolTrans the authority to make buses available. He stated that SchoolTrans always billed by the benchmark number of the contract which he maintains was increases to 21 by Addendum #2. • According to the Audit, MCS should request $529,703 from SchoolTrans for buses charged but not actually operated and for all CNAs charges but not supplied since February 2003. • The cost per child was $207 a day in 2002-03. In 2004 the cost has dropped to $115 per day. • According to the contract, the District was to conduct a survey at the end of each school year to evaluate the services provided by SchoolTrans. If the survey resulted in an approval rating of 95% or greater, the District would award $10,000 to SchoolTrans. Guess what? They did their own survey and billed for $20,000 and got paid. According to SchoolTrans, they did not maintain copies of the surveys. The MSC is requesting the return of the $20,000. This is an incredible story but we must state that Dr. Johnson seems to be getting this big system in hand and is doing the right thing. Also we congratulate Vince McCaskill of the MCS for his outstanding cooperation in this public records request. Click here to download full audit report May 2, 2005 The mayor has a grand plan for the Riverfront and he is using the Riverfront Development Corporation to implement that plan. The cost to the taxpayers is in dispute but it will cost any where from $40 million to $200 million depending on who you believe. Click on the link below to study the facts and the hype. Click here to go to the portion of our website that concerns the Riverfront Development Corp. April 29, 2005 Shelby County has instituted a new Plan C pension system which allows for earlier retirement (25 years and no age requirement) than previous plans. It goes into effect this year. Click below to view the details of this plan. More will be coming in the future on Shelby County benefits. Salaries and job titles from $60,000 up have already been posted under the Shelby County button. Click here to see the new Shelby County Plan C pension system. July 27, 2006 Every time I get in line to have my car inspected, the temperature of my car’s engine goes up but not nearly as fast as my blood pressure. I sit there burning up $3.00 per gallon gas for up to an hour and finally a bored city employee sticks a lance up my tailpipe and hopefully tells me everything is OK or maybe not. There has to be a better way. The City’s solution, build another inspection station and hire more employees. Out of frustration I wrote the open records letter shown below to start to gather information on this process. Click here to read the open records request to Shelby County We are all aware of all the cars that we see on the streets of Memphis with temporary tags. What is going on? Who is paying and who is not? Click below to see the answer that I got from my open records letter from the Shelby County Clerk, Jayne S. Creson. Click here to read the answer to the open records request to Shelby County I talked to Ms. Henning, a very courteous and knowledgeable person. In spite of the fact that all motor vehicle records contain a municipality code and therefore they record motor vehicles within the Memphis City limits and outside of the City of Memphis, she could not give me the information I wanted because the County Attorney said that they would have to spend some time getting this information and that the open records law did not allow me to request information that was not readily available. With my Certificate of Vehicle Registration Renewal in front of me I asked her about the charges. My bill was $108.00. • $30.00 goes to the City of Memphis less $1.50 to the County Clerk as a processing fee. • $24.00 goes to the State of Tennessee • $50.00 goes to the County as a wheel tax. • $2.00 is an electronic processing fee. • $2.00 postage The people in the county do not have to pay the $30.00 to the City and they do not have to get their vehicles inspected. How do they know if someone lives in the County or City? They require two items, a picture ID, a MLGW bill, a telephone bill, a voter’s registration, a credit card bill etc. etc. I call on the public to submit new ideas for auto inspections and for the whole process of vehicle registration. My own thoughts are as follows. • Do away with the inspection stations and license service stations to inspect cars so that they could be inspected when you get your oil changed and your tires rotated. • Inspect all cars, city and county. • Keep the current inspection stations but allow the public to reserve a time and charge for that reservation, say $25.00. The last time I went through, it took about 5 to 6 minutes to inspect. • Start stopping cars with temporary tags to see if they are legitimate. • Is there any way to verify that the sticker on the license is real and not some computer generated false copy? • Does anybody give a damn? Watchdog will be glad to publish your thoughts and suggestions. August 23, 2006 Here are some of the most important items that need to be addressed by the Charter Commission in the upcoming discussions with the public. There will no doubt be many more issues and questions, but the following issues illustrate the most egregious problems that certainly need solutions. Term Limits- Prevent elected officials from getting the tenure that gives them the position to sell their influence to developers and other buyers of politicians as exhibited by Tennessee Waltz. No MLGW sale without voter approval- Because MLGW is piling up cash at the ratepayers expense, politicians want to get their hands on the cash. As of December 31, 2005, MLGW had $167 million in unrestricted cash up from $111 million in one year. The law says that any surplus remaining after establishment of proper reserves, shall be devoted solely to the reduction of rates. Click here to see who had been appointed by Mayor Herenton as of March 2005 and what their jobs were and how much they were making in salary. Restrict Elected Officials from voting membership on city and county boards and commission- This is where the influence peddling starts and needs to be stopped. As an example, Rickey Peete is chairman of the Center City Commission and is on the Center City Development Board and on the Pilot evaluation committee of the Industrial Development Board. Barbara Swearengen Holt is on the Center City Commission board. Scott McCormick is on the Pilot evaluation committee. There are so many board and commissions that it is difficult to get a full picture of all of the members. Contracting Authority- Prohibit Mayor from signing any contract unless it has been approved and funded by city council. The Linebarger contract given to a firm charging 20% for the collection of delinquent taxes when the County Trustee offered to collect the same money for 2% is a good example of the abuse by the Mayor. PAST NEWS ARTICLES 2005 | PAST NEWS ARTICLE 2006 | | Return Home | 2009 NEWS | MEMPHIS CITY GOVERNMENT NEWS | MEMPHIS CITY COUNCIL NEWS | MLG&W NEWS | SHELBY COUNTY GOVERNMENT | CONTACT US | |
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