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HOW LONG HAS IT BEEN SINCE ANYONE READ THE CITY BUDGET?
June 30, 2008

IT IS WELL BEYOND TIME THAT PEOPLE START READING GOVERNMENT BUDGETS-LET US START WITH THE CITY OF MEMPHIS

We read a lot about the lean mean budget of the City of Memphis. The City Council says it is fat but they pass it anyway. The City Administration says it is lean and cannot be cut. Who is right? What should be done?

Well I decided to make a start and put the budget on a spreadsheet and I intend to continue on until I get some answers and let the people who pay the bills, the TAXPAYERS, know about their budget.

This project is extensive but I intend to continue to work on it, the City, the County, comparable cities (Nashville, Louisville, and others) and see how we compare and compute.

I start with the attached spreadsheet which shows the various departments from the 2008 adopted City budget and compared it with the 2006 City budget, actual numbers. The following items should make the taxpayers and the City Council ask questions.

Here are the various departments:

EXECUTIVE, HUMAN RESOURCES, FINANCE, PUBLIC SERVICES, CITY COUNCIL, FIRE SERVICES, GENERAL SERVICES, CITY COURT JUDGES, POLICE SERVICES,HOUSING AND COMMUNITY DEVELOPMENT, CITY COURT CLERK, PARK SERVICES, CITY ATTORNEY, GRANTS AND AGENCIES, PUBLIC WORKS, SPECIAL REVENUE FUNDS (metro alarm fund, zoo, museums, mlk park, solid waste management and office of planning and development), DEBT SERVICE FUND, ENTERPRISE FUNDS (sewer, storm water and golf), INTERNAL SRVICE FUNDS (health insurance, printing and mail and vehicle maintenance).

Here is what I found. Look for yourself.

· In the executive suite at City Hall, the employee count went from 36 to 98 and $12.6 million got added to the lean budget.

· In Human Resources, 39 to 64 people with $6 million added to the budget.

· The City Attorney added 16 people and $5.7 million

· Housing and Community Development added 10 and $2.1 million.

· Park Services added 54 people and $4.3 million.

· Solid Waste Management added 72 people and $12 million.

· Sewer workers added 39 people and $5.5 million.

· Total Budget employees went up 1317 employees.

THAT IS $48.2 MILLION JUST FOR STARTERS

The total operating budget is $744,577,884 not $540 million. Why? Just look at your utility bill and hidden on the back are the City of Memphis Sewer Charge, the Solid Waster Fee, the Storm Water Fee and the County Mosquito/Rodent Control Fee. Rather than put the first three on the operating budget, they charge you this tax through your MLGW bill.

Call or email your City Council members and let them know you want the City budget cut and by a substantial amount as there is plenty of fat there, especially starting at the top.

Click here to see how $48.2 million got added to your 2006 budget for the 2008 budget

HERE IS A REALLY GOOD REFORM IDEA (FULL ELECTRONIC DISCLOSURE OF CONTRIBUTIONS AND EXPENDITURES)
June 23, 2008

HERE IS A REALLY GOOD REFORM IDEA (FULL ELECTRONIC DISCLOSURE OF CONTRIBUTIONS AND EXPENDITURES) THAT GOT SHORT SHIFT BY OUR TENNESSEE LEGISLATURE

I proposed to Representative Brian Kelsey and Senator Paul Stanley that the election commissions in counties, with larger populations (e.g. Shelby, Knox, Hamilton and Davidson), be required to furnish their political contribution and expenditure reports in the same electronic format that state candidates adhere to. Actually it is easier to do so when compared to the current system of paper records. Moreover it certainly makes it easier to find out who contributes to whom and how the money is spent. Sound like a good idea? Of course it is except for one thing. THE LOCAL POLS DON’T WANT YOU TO KNOW WHO IS CONTRIBUTING TO WHOM AND HOW MUCH. Therefore, despite good faith efforts to get it passed, HB2929 died.

These contributions are legal but they buy influence which can possibly lead to illegal activities as we have seen from recent convictions and pending trials. Making it easy to see who is contributing and to whom is a good idea to support honest government.

Here is a recap of the proposed bill that failed.

Campaigns and Campaign Finance - Requires candidates for local public office and political campaign committees in local elections in any county having a population in excess of 250,000 to file contribution and expense statements with the registry of election finance instead of with the local election commission. - Amends TCA Title 2.

To give you an example of the benefits of the state system, I have attached pdf files that came from the state excel spreadsheets on BELZ contributions for just one year to the parties listed and contributions to Ophelia Ford for just one year. The Belz’s gave $148,257.97. In a separate report, Ophelia Ford got $59,686.88. Also a really big factor is the contributions of PACs (Political Action Committees). I have attached a list of over $5 million dollars in Tennessee for just one year of contributions that came from the state list.

Locally if you want similar information on Herenton or any other local politician you have to go to the election commission and pay 25 cents per sheet for these reports which in most cases started out as an excel spreadsheet. For instance, I have attached a Herenton file which I paid for and then converted to a pdf file showing that he got $185,000. Also I have attached a file on Ricky Peete showing contributions and contributors over a period of time compiled by a group of citizens from the difficult Shelby County Election Commission records. Total of $235,810. Does this more difficult process make sense? Of course it does, because the contributors and the receipients do not want you to know who is giving to whom and the present scheme make this difficult. Go figure.

Write your representatives and senators and demand that next year they rectify this situation and pass HB2929.

Click here to see what the Belz family gave to statewide candidates in 2006

Click here to see who contributed to Ophelia Ford in 2005

Click here to see who gave to Mayor Herenton from 2003 to 2005 from the difficult to obtain records at the Shelby County Election Commission

Click here to see who gave to Ricky Peete for a few years also from the difficult to obtain Shelby County Election Commission records

Click here to see more than $5 million dollars in PAC contributions during 2006. The list comes from the state electronic data base

SCHOOL BUDGETS CAN BE CUT-LOOK AT MIAMI/DADE COUNTY

June 18, 2008

Since the subject of budget cuts to the Memphis City Schools is so much in the news, I investigated the Miami Dade County School system website and found the following interesting items about school budget cutting in the previous home of our new superintendant. Budget cuts can be made when the laws do not stand in the way.

DISTRICT BUDGET UPDATE
Superintendent Rudy Crew Addresses Budget Crisis

June 9, 2008

With a new fiscal year fast approaching and with Florida lawmakers having severely cut funding to our schools, the School Board will meet later this month to finalize more than $284 million in cuts for the 2008-09 school year.

In April, the Board approved a reorganization plan to save the District approximately $13.7 million in recurring annual costs. Last month, the Administration brought forth additional reduction plans, some of which were not approved, including a recommendation that would have saved the District an additional $33.9 million in position cuts, furloughs, and other down-sizing measures.

There are outstanding cuts still to be made, with all options necessarily on the table. As always, the best interest of our students must be and will be our overriding concern.

With nearly three-quarters of the District's $3 billion operating budget going to salaries, a further reduction in the District’s workforce is inevitable. Times are tough, here and across the state, and it falls to us in the Administration and on the School Board to make the tough calls. This is hard for all of us, especially those affected by these reductions. Accordingly, we are recommending a plan to help ease the transition for affected employees, including job-placement assistance inside and outside the School District.

The Board will discuss the budget at a workshop on June 12, 2008, at 10 a.m., and its monthly meeting, June 18, 2008, at 1 p.m.

M-DCPS BRIEFINGS:
Statewide Cuts Lead to Reduction in Force and Other Budget Updates, (5/14/08)
Superintendent addresses Florida lawmakers’ huge cuts to education funding, (5/6/08)
School Board Considers More Than $284 million in Cuts to 2008-09 Budget, (5/2/08)
Superintendent Recommends Reorganization and Restructuring, (4/15/08)
Board Chair Offers FL Legislature Cost Neutral Plan and Other Budget Updates, (3/26/08)
Education Policy Brief: K-12 Funding Update, (3/26/08)
Funding Cuts Impact M-DCPS Employees and Services to Students, (3/7/08)
District Faces Budget Cuts, (2/28/08)
Reductions to Salary Expenses Anticipated, (2/15/08)
Tough Times, Tough Calls, (2/1/08)

RELATED RESOURCES:
Budget Workshop Presentation, (6/12/08)
A–3 Presentation to the Board, (5/21/08)
Budget Workshop Focus on FY 2008-2009, (5/13/08)
Process for Repurposing Schools Workshop, (5/13/08)
Budget Workshop Focus on FY 2008-2009, (4/28/08)
Tentative Budget Cuts 2008-09
Dollars & Sense Presentation
State Revenue Reductions 2007-08
Budget Presentation
Five-Year Capital Plan

RECENT ARTICLES:
Florida schools fear gains may vanish, The Ledger (4/13/08)
Tax changes fuel fears of funding loss, TradingMarkets.com (3/30/08)
Tax-cut proposal leaves big questions, The Miami Herald (3/19/08)
Florida agencies face deep cuts across board, The Miami Herald (3/16/08)
School, court funds slashed, The Miami Herald (3/06/08)
Schools need more cash for state goals, The Miami Herald (2/28/08)
Schools to take another hit from state, The Miami Herald (2/27/08)

YOUR TENNEESS LEGISLATURE RULES OUT EFFICIENCY
June 16, 2008

With all the controversy about the City Council cutting the budget of the Memphis School System and possible lawsuites, I decided to look at the law that they are arguing about. I looked up the applicable portions of the Tennessee Code Annotated and found the following law.

(B) (i) Notwithstanding any other law to the contrary, for fiscal year 1992-1993 and any subsequent fiscal year, if state funding to the county for education is less than state funding to the county for education during the fiscal year 1990-1991 or less than the previous fiscal year's state funding to the county for education (except that a reduction in funding based on fewer students in the county rather than actual funding cuts shall not be considered a reduction in funding for purposes of this provision), local funds that were appropriated and allocated to offset state funding reductions during any previous fiscal year are excluded from this maintenance of local funding effort requirement;

(ii) It is the intent of this provision to allow local governments the option to appropriate and allocate funds to make up for state cuts without being subject to a continuation of funding effort requirement as to those funds for any year during which the state reinstates the funding (or restores the previous cuts), and during any subsequent year should the state fail to restore the funding cuts.

What this means to me, a non lawyer but a businessman, is that you cannot save money by running a more efficient school system. I do not know the history of this law but it obviously was promoted and sponsored by the public teaching establishment to keep the possibility of cutting job off the table. It says that you cannot cut the budget from the previous year unless you have fewer students. But suppose you come up with a more efficient management or teaching plan that requires fewer administrators or fewer teachers but improves efficiency and learning? Sorry, you cannot cut the budget. It completely destroys the incentive to run a system more efficiently.

Under this law, the only way you could cut the budget would be to have the same budget as the year before and because of inflation, you would be spending less due to the lower value of the dollar. The politicians thought that they were doing something good but what they accomplished was a monument to inefficiency with no incentive to improve the system. We need a change in the law that would allow efficiency savings which would lower the school budget without a state penalty due to the above law.

PUBLIC AND PRIVATE SECTOR EQUITY IN BENEFITS
June 11, 2008

It seems it takes economic hard times to get politicians to address the root cause of our high taxes. Now we see the Shelby County Commission talking abut cutting the lush benefits of our public servants. Their reaction is predictable. They are mad.

I wrote about this in 2005. Here is the article that I wrote at that time after doing an exhaustive and extensive benefit survey and comparison of the City of Memphis, the MLGW, Shelby County and the two school systems. The point of the article was that our public servants were better paid and benefited than the taxpayers who work in private industry. Here is the article and attached is the benefit comparison for 2005. Also shown below is a national news article about the difference between those who work in the public sector and those who labor and pay for their benefits in the private sector.

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 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 view the comparative benefit spreadsheet for the City of Memphis, Shelby County, MLGW and the two school system employees compiled in 2005

Click here to read the USA Today article comparing public and private sector salaries and benefits

OPENING THE MEMPHIS CITY SCHOOL OYSTER TO GET INFORMATION

June 2, 2008

The Memphis City School Sstem (MCS) is much in the news lately and most of the news is not good. Investigations, allegations of fraud, mismanagment and poor quality of education results are among daily news items.

Back in January and February of this year I sent two open records requests which were basically ignored until I filed suit in Chancery Court for open records violations. I then started getting some answers but am still waiting for the basic information about job titles, job descriptions, salaries and benefits and information on computers purchases with details on the winning and losing bidders and reasons for the selection of the winning quotes.

As an interim step I have attached some information that I have been furnished concerning square footage and acreage of schools, names, locations and ages of schools and makeup of the school population. This is basic informaiton that should be on their website for parent and taxpayer information. After all, their budget for the coming year is over $1 billion dollars. We continue to spend money building new schools when basically the school population has not increased. Why?

I will keep you informed as I develop more information on this huge part of our tax cost in the City of Memphis as we struggle to keep our heads above water.

Attached are the following files

Enrolled students by school and by grade level

Enrolled students by school, grade level and ethnic catergory

Facilites data by school, date built and area

Zone 1,2,3 and 4 schools by name with acerage, buildings, classrooms, square footage, portable classroom numbers and square footage

Click here to see the Memphis school square footage for the 4 zones

Click here to see the student enrollment by school and grade

Click here too see the student enrollment by school, grade and ethnic breakdown

Click here to see the data about the schools in Zones 1,2,3 and 4 schools by name with acerage, buildings, classrooms, square footage, portable classroom numbers and square footage

MINORITY CONTRACTING AT CITY HALL- THE TAXPAYERS PAY THE BILLS
May 19, 2008

Since 1997, the city has had a minority purchasing ordinance and while there is a misconception by many at city hall that this entitles minority firms a piece of the pie with or without bids, it does not.

To put it bluntly, the problem is not the process of awarding contracts it is the process of finding minority firms. Only CERTIFIED minority contractors are consider minority firms by city hall. And who certifies minority firms? It isn’t the city, it’s the Mid-South Minority Business Council (MMBC) and it involves a minority firm handing over everything related to its business in order to prove its minority ownership is genuine – enough to discourage some. The certification may also take months, which means that by the time a bid comes around it is too late to register as a minority firm that is unless someone tips you off in the City that a contract is coming in time to certify.

There is also another problem. What might take months to get minority status for some can be expedited for others, as we saw with Reginald French’s firm Integrate Technologies. This is the true disparity in the city’s minority purchasing ordinance. Some minority firms appear to be favored over others. See the attached email expediting Integrate Technologies application.

Has there been any audit of whether firms are certified fairly? Imagine the power the MMBC holds as the gatekeeper of minority contracts at city hall. Who is monitoring what they are doing? I have tried, which resulted in a lawsuit and a nice letter that basically said they were not obligated to give me anything.

Elbert Jefferson is quoted in a recent article as saying, "And if you find that there was inequity, you have to determine whether those inequities are the result of whether those businesses may have been inexperienced, whether there were market factors that affected their inability to contract with the city, or whether there were intentional acts on the part of the municipality or municipal employees that triggered those contracts not going to a particular segment of the community."

What would trigger a contract not to go to a minority firm based solely on the company’s minority status? The City Charter for one!

The City Charter plainly states:
Sec. 6-92-8 M/WBE goals.
A.iii. Twenty-four (24) percent - total goal.
The annual goals provided above shall be reviewed annually by the M/WBE advisory committee. These overall M/WBE participation goals are only intended to be benchmarks for evaluating the overall performance of the M/WBE program on an annual basis. These participation goals are not and, shall not be quotas. For purposes of determining or satisfying annual participation goals, only the participation of minority- or woman-owned business enterprises located within the Memphis MSA and certified by the city’s contracted central certification agency will be considered.

Sec. 6-92-11 Miscellaneous.
B. Bid Preferences. If upon review of the results of the annual program goals, the city determines that it has not achieved the individual M/WBE program goals based on contracts let or bids made during the preceding fiscal year for women or minority business enterprises, then the city may consider amend the ordinance codified in this chapter to include bid preferences as may be permitted by law.

What does this mean? The city cannot use this ordinance as a preference towards vendors based on race and if they intended to, a disparity study must be conducted and the charter changed. Odd that this is being done on the cusp of charter committee recommendations, don’t you think?

I have attached a previous disparity study done in 1994. Look at recommendations #6, #10 and #15. #6 calls for the elimination of the ability of Division Directors to override the decisions of procurement agents by implementing a penalty system against those who do so. #10 reduces insurance and bonding requirements to State law requirements to induce greater MWBE participation. #15 calls for cutting up the bid packages so that they are just under $50,000 so that they are not bound by the open bid law.

Also I have attached a December 2004 email from Carlee McCullough, the Contract Compliance Officer, to the Mayor telling about her success in the minority contracting area but complaining about Mel Scheuerman, the BDC Administrator. Also look at page 2 and look at who has feasted on this work, Allan Wade, Ricky Wilkins, Lesure Computer Services, Mitchell Technology, Thomas Technologies and Integrate Technologies. Enough said. The pie is big, but the slices are few and favored.

Is Mr. Jefferson so mistaken that the city can award contracts based on set aside goals? I believe so. The City’s purchasing ordinance is clear. No contract under $50,000 is to be awarded to any vendor unless deemed through an open bid process to be "lowest and best." The minority ordinance is only meant to monitor and is not meant to govern the act of purchasing, that is unless a disparity study shows a disproportionate gap between minority and non-minority firms. Then and only then, if it will hold up to a legal challenge, can the city force award contracts to minorities.

Another thing that troubles me about the meeting is that no where is it mentioned that the study will look at those who have been turned down for minority status, those who have lost contracts, and those who choose not to participate in the minority program because of the level of disclosure. Or, how many minority firms have had their fill of contracts and are now operating at an equitable level and need to step aside for other firms or the actual statistical data of minority/non-minority businesses in Memphis.

A recent newspaper article stated the following.
"The city is working with a team of consultants to complete what’s being called a ‘disparity study.’ Memphis city government, which functions with the help of a half-billion-dollar operating budget, also depends on the contributions of contractors and vendors it hires for a variety of tasks.
The city wants to hear directly from those people."

I don’t think asking the fox in the hen house if he has had his fill of chickens is necessarily the best thing to do when determining how many more chickens to buy. The interest of the taxpayers, who pay all the bills, need to be considered and every contract should clearly show the premium paid over and above market price for the goods or services purchased. My experience and research with the City of Memphis ACS contract and previously with the County shows that we paid up to 30% or more over market price for millions of dollars in computers. The County has corrected this situation but the City still continues its past practices.

Click here to read the fax from Carlee McCullough to expedite Reginald French's application with the Uniform Certification Agency

Click here to read the 1994 disparity study and items #6, #10 and #15

Click here to read the 2004 report from Carlee McCullough to the Mayor about minority contracting and on page 2 see who gets the bacon

CITIZENS DOING THE WORK OF THE PARKS DEPARTMENT
May 6, 2008

I received the following email recently from Walter Broadfoot who has an office next to this City of Memphis Park. He has tried to purchase this property in the past but the City will not give him the time of day.

Finally he and his neighbors took some action which the City has refused to do for years. He sent this email to the City Council members. Please note the pictures.

Here are a few before & after pictures of concerned neighbors cleaning up at the park at the corner of Madison, Belvedere & Lockett. The Park Commission has never done anything but cut the grass. Trees, weeds & bushes had taken over our park which gave the homeless a place to drink, shoot up & sleep it off. As you can see now there will no where for them to hide. We have removed the bushes, trees & the stumps have been ground out. All paid for by the concerned citizens living in our neighborhood. Our next project is to kill the weeds & plant Bermuda grass & some flowers. This park has been in this condition for decades & if private enterprise was responsible for its maintenance it would have been maintained properly. We will be keeping you updated as the improvements continue.

PS - The cutting of the trees, weeds & bushes & grinding the stumps out took a total of 2 hours at a total cost of $1,580.00 which we paid for. Please do not feel that this must be paid back, we would not want to burden the city or WW with any more debt.

Thanks,

Walter

Walter M. Broadfoot, Jr.

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A $1.885 BILLION DOLLAR PROMISE THE POLITICIANS FORGOT TO TELL YOU ABOUT

April 23, 2008

I have finally gotten replies from the City of Memphis, the Shelby County Government and the MLGW concerning the unfunded liability for retiree health care and life insurance. The total unfunded liability is, “DRUM ROLL! ARE YOU SITTING DOWN”

$1.885 BILLION DOLLARS

POLITICAL DIVISION	UNFUNDED LIABILITY	NUMBER OF ACTIVE EMPLOYEES	RETIREES
City of Memphis	$823,000,000	6225	3235
MLGW	$709,000,000	2608	2493
Shelby County	$353,000,000	6669	1800
TOTAL	$1,885,000,000

When I looked at these numbers, I immediately noticed that the MLGW was the highes cost per retiree, the City of Memphis was next and Shelby County was the lowest. I am still studying the numbers and I do not have a full report from the City but I have attached the three reports for you, the readers, to study.

It seems to me, that in reading over the reports, we are being taken for a ride by the City and the MLGW. No surprise there. The County is apparently costing the taxpayers less per retiree. In looking at their plan, I did notice that the retirees’ share of the cost depends on years of service at retirement (see page 24 of 39) whereas, at the City and the MLGW, the retriees’ share of the cost stays the same regardless of the years of service. This is just another example of how the taxpayers are being taken to the cleaners by the City of Memphis and MLGW.

Any way you look at it, the obvious conclusion is that we are being left a huge future problem in funding these reckless promises made by the present and past politicians. We need to organize and plan for a solution to this problem. See the three reports which are attached.

click here to see the Shelby County report on unfunded retiree health care promises

Click here to see how much the City of Memphis have promised their retirees in health care benefits but have not paid for

Click here to see the MLGW unfunded liability promises to their retirees

OUR TAX BUCKET HAS A HOLE IN IT!!!
March 25, 2008

March madness leads to April fools day and this year is no exception. The madness was Mayor Herenton’s announcement that he is going to resign this summer and move on to ruining the Memphis School system or maybe the US Congress. I am sorry to tell him that both are already well on the way to destruction.

The recent announcement by Mayor Wharton and Marlin Mosby that our present course in Memphis and Shelby County is unstainable is something that I have been warning of for some time. Mayor Herenton continues to deny the obvious, making a change of course more difficult. Recently I pointed out some of the major causes of our financial problems and some of the hard and politically difficult decisions that need to be made. I want to explore further another aspect of the financial problem.

There are over 15000 buildings and properties in Shelby County that pay zero property taxes. There are many more that pay only a part share of the full property tax rate. Of the no property tax facilities, they run from an appraisal of over $150 million down. The total is over $3.5 billion. The types of properties include religious, government, apartments, office buildings, manufacturing and warehouses.

Looking more specifically at some examples helps a discussion of why these properties pay no taxes. We could probably all agree that the main church worship building should be free of property taxes. Churches are a big business in Shelby County. But what about all the ancillary activities and property that goes along with many churches such as schools, child care facilities, nursing homes and retirement communities. There are many that feel that some of these facilities should pay some tax, possibility at a lower rate than residential or commercial properties.

Some specific examples are Kirby Pines Estates at 3535 Kirby Road and Trezevant Manor at 177 N. Highland. Together they have a total market appraisal of $110 million. Concerning office buildings you have the Morgan Keegan Building at 50 N. Front at an appraisal of $35 million and Peabody Place at 149 Union at $44 million. Then look at warehouses such as 4880 Tuggle (Ford Memphis Parts Distribution), 4155 E. Holmes (Memphis Distribution Center Panattoni Development Co. LLC), 5461 Davidson (Hamilton Beach, Prologis), and 5200 Tradeport (Chickasaw Distribution Co) for a total appraisal of $111 million. And then there is the Yellow Freight System at 3914 E. Shelby Drive at over $5 million. All of these paying no property taxes on the buildings as of 2004. How long do these tax abatements run? It varies but as an example, the Ford deal runs from 2002 to 2014.

Who gives these no tax or reduced tax benefits? Principally they are the Industrial Development Board of Memphis and Shelby County, the Center City Revenue Corporation, the Shelby County Health and Education and Housing Facility Board and various other boards constituted in Collierville and other incorporated cities.

We need an honest and transparent discussion of these no tax and partial tax properties in Shelby County as we are facing massive tax increases this year and next. With a shrinking tax base of people able to bear the load, we could be facing a financial disaster. I will be reporting further on this subject in future reports.

ECONOMICS 101 AND POLITICIANS. GRADE F-
April 18, 2008

If the City of Memphis and Shelby County are looking for reasons for our financial crisis, they need to start with our two school systems. Our County school system is pretty good and their cost per student is lower than the Memphis City School system. Of course Mayor Herneton wants to combine the two systems which would require the County School System to spend more per student to lower their achievement level to the City system as state law requires that when you combine two systems, you must bring the lower cost system up to the higher cost system. Stupid? Yes, but we are talking politicians here, not rocket scientists. The City School System and Mayor Herenton continue to block a state law that would create a separate school district for the better performing county school system.

However the most egregious problem and error is the ADA (Average Daily Attendance) split law between the City and the County. The law states that when the County builds a school in the County, they must give the City of Memphis School System the cost of the new school multiplied by the ADA split. Moreover, after the County pays for the new school and pays the Memphis School System extra according to the ADA law, when the City of Memphis expands and takes in the County school, the City pays the County nothing for the taken in school. The law, however, has a provision that allows the county to build the school with taxes collected outside the City of Memphis to avoid this disastrous payment to the Memphis City Schools (MCS). One school (Arlington High School) was built by this provision in the law and county taxpayers are paying 4 cents per year in property taxes for this school over and above their normal county property tax. Since, then the County Commission has refused to build further schools using this method in the law. The results are shown below. $539 million dollars in extra cost plus another $50 million starting this year. No wonder Mayor Wharton is looking to tax you more.

CAPITAL IMPROVEMENT BUDGET SCHOOL FUNDING
Funding bases on ADA (Average Daily Attendance)
FY	City	County	Total
1999	$57,300,000.00	$27,150,000.00	$84,450,000.00
2000	$95,296,146.00	$48,838,828.00	$144,134,974.00
2001	$57,300,000.00	$31,800,000.00	$89,100,000.00
2002	$57,300,000.00	$27,300,000.00	$84,600,000.00
2003	$57,300,000.00	$18,800,000.00	$76,100,000.00
2004	$57,300,000.00	$51,975,000.00	$109,275,000.00
2005	$57,300,000.00	$20,000,000.00	$77,300,000.00
2006	$57,300,000.00	$20,000,000.00	$77,300,000.00
2007	$43,000,000.00	$17,000,000.00	$60,000,000.00
Totals	$539,396,146.00	$262,863,828.00	$802,259,974.00
TOTAL PAID TO CITY OF MEMPHIS OVER AND ABOVE COST OF COUNTY SCHOOL CONSTRUCTION COSTS		$539,395,935.00
Funding based on Joint Agreement of 50/50 split of $100 million
FY	City	County	Total
2006	$0.00	$8,000,000.00	$8,000,000.00
2007	$0.00	$30,000,000.00	$30,000,000.00
Note: Final $12 million to County Schools paid in FY 2008. City School payment of $50 million to begin in FY2008

The reason for this financial crisis lies at the feet of the politicians and their refusal to make reasonable decisions that taxpayers have to make every day. It is time that taxpayers take back control of their government from the politicians by cutting off the tax faucet.

ON THIS TAX PAYMENT DAY, MAYOR HERENTON'S FAT BUDGET NEEDS TO GO ON A DIET
April 15, 2008

On this tax day, Mayor Herenton is going to present more taxes for you to pay. Now that the citizens of Memphis have reelected Mayor Herenton, here comes the cost of that reelection, new taxes to pay for jobs for his bloated government. Look at the figures and facts.

• In Fiscal Year FY) 2006 there were 5162 total actual employees.
• In FY 2008 he showed 6225 employees, an increase of 1063.

The City finally responded to my open records request for a detailed list of these employees as shown below. It shows 5728 employees. Take a look at the attached list of jobs and salaries.

In addition to this list,I have attached the union contract between the City of Memphis and the American Federation of State, County and Municipal Employees. The benefits, over and above salaries, amount to about 45% of the salary and of course includes the huge unfunded healthcare retirement promises where the taxpayers are paying 70% of the premiums. Recently the City finally said that this unfunded liability amounts to $824 million dollars just for the City and not including the MLGW and the County.

Look on page 16 (holidays), page 17 (vacations), page 18 (sick leave) and page 20 (bonus days). This amounts to 14.4 weeks off per year or over ¼ of the year not working. What private company gives these kinds of benefits? This generosity at the expense of the taxpayers naturally requires more employees than would be required in a private business.

The City Council has the authority to tear this budget apart, carefully examine all the parts and put back together a leaner, meaner plan that cuts this fat to the bone. They should hire outside, independent people to do the job and not depend on information from the Administration.

The recent $700,000 efficiency study states in several ways the foillowing.

The City’s budget process does not result in a financial plan that aligns with long-term strategies and service expectations within the City. In contrast, the current budget methodology and development process is incremental in nature and does not tie budgetary allocations to service levels, outcome measures or program achievements.
In other words, they just take last years budget and add something to it and send it to the City Council and expect them to approve it, which is what the City Council has done in the past. Hopefully, the new City Council will be different as the current financial situation is insupportable.

Click here to see the union contract for public employees with all the benefits in it

Click here to see the 5728 jobs, the job titles and salaries

OH BY THE WAY, THE CITY OWES $823 MILLION THEY FORGOT TO TELL YOU ABOUT
April 10, 2008

On June 5, 2007 (before the October 2007 Mayoral election) I wrote the following open records request to the City of Memphis.

1) I want to inspect the records and documents that show the calculations that document the unfunded liability that the City of Memphis will have to finance to meet the GASB 43 and GASB 45 requirements. These records and documents should show the total unfunded liability and the amount over and above the normal pay as you go annual funding that is required to meet the future unfunded liability.

The City refused to answer the request until yesterday (April 8, 2008) and now I know why. The answer is in a presentation presented to the City Council on November 6, 2007 (after the election). In it you will find the following devastiting news of our unfunded liability for non-pension liability for post employment retiree health care benefits. It amounts to

$823 MILLION DOLLARS(see attached document)

This includes any non-pension, post –employment benefits provided to retirees (i.e. medical, dental, vision, hearing, and related benefits). (By the way, the MLGW and the County have similar problems)

The required annual contribution is $51.1 million whereas they have historically been contributing $20 million annually to cover retiree healthcare costs.

To get around this high cost to fully fund the unfunded liability, the plan is as follows.

· They will set up an investment trust to pre-fund post employment benefits.

· Future changes to the retiree health plan are likely.

· Other consideration will include possible changes to plan benefits design and cost sharing. (Look out retiress, they will take it out of your hides)

For Fiscal Year 2008 they will contribute only $3 million rather than $31 million (the difference between the $51 million real cost to fund this unfunded liability and what they normailly contribute.

WHAT THIS REVEALS IS THAT POLITICIANS HAVE KNOWN ALL ALONG THAT THEY PROMISED MORE THAN THEY WERE WILIING TO PAY FOR AND THEY ARE GOING TO PUT IT OFF INTO THE FUTURE AFTER WHICH THEY WILL BE GONE AND HOPEFULLY RECEIVING THEIR PENSION AND BENEFITS CHECKS FROM A BANKRUPT CITY.

The presentation finishes with a quote from Standard & Poor’s (12/01/04). “THE FUNDING OF THESE OBLIGATIONS IS OF AN INCREASING CREDIT CONCERN, EXACERBATED BY THE RAPID COST ACCELERATION IN MANY HEALTH-RELATED AREAS… CLOSE ATTENTION WILL BE PAID TO THE NEWLY QUANTIFIED OPEB UNFUNDED LIABILTIES, GIVEN THEIR EXPECTED MAGNITUDE, AND TO EMPLOYERS’ STRATEGIES FOR MANAGING THEM.”

THE POLITICIANS KNEW ALL ALONG THAT THEY WERE PROMISING MORE THAN THEY COULD DELIVER, BUT DID IT ANYWAY. NOW THEIR SOLUTIONS IS “PUT IT OFF INTO THE FUTURE” OR “TAKE IT OUT OF THE HIDES OF THE RETIREES”.

I have another solution. Get rid of the irresponsible politicians at the next election and cut off the tax increases that are sure to come with a charter change requiring voter approval before any tax increases. Cutting off the money is the only way to get their attention.

Click here to read about the $823 million extra in extra promises city Hall forgot to tell you about

A 15 YEAR BLANKET EXTENSION WAS GIVEN TO 61 DOWNTOWN PROPERTIES
April 7, 2008

IN 1997, THE CENTER CITY REVENUE FINANCE CORPORATION (CCRFC) GAVE A BLANKET 15 YEAR EXTENSION OF PILOTS (PAYMENTS IN LIEU OF TAXES) TO 61 DOWNTOWN PROPERTIES

I have recently been investigating PILOTS given by the Memphis and Shelby County Industrial Development Board and the Center City Revenue Finance Corporation (CCRFC). I recently reported on some properties granted pilots by the Industrial Development Board of Memphis and Shelby County.

Then I went to the Center City Commission and read through some of their files. Whether you agree or disagree with the purpose and actions of the Center City Commission, we are fortunate to have Jeff Sanford running the organization. He is a person of the highest integrity and his files are completely open to the public as are the actions of the various boards.

What I found was that a lot of properties are paying very low taxes and for a very long period of time. Then I found that before Jeff Sanford took over in June 1998 (Ed Armentrout was the previous President), the board of the CCRFC gave 61 downtown properties a blanket 15 year extension on what was already a lengthy tax exclusion. The purpose of the extension was to divert the tax funds that would normally be coming into the city and the County at the termination date of the original pilot, and use those tax funds to finance new Downtown public projects, mostly parking garages. I have attached a sheet explaining the extension program. Also I have attached a spreadsheet showing the 61 properties involved.

Whether you agree with this program or not, it is important that you understand it and recognize that it will be a long time until we see if the promised golden tax eggs for a revived downtown ever gets laid or if it is just a program to help those downtown property owners on the backs of the residential taxpayers in Memphis and Shelby County.

Click here to see the 61 downtown properties that got a 15 year PILOT extension

Click here to see the rules for the 15 year extensions and how the money is to be used to build downtown garages rather than go to the budget

SOME SUGGESTIONS FOR CUTS IN SPENDING FOR SHELBY COUNTY AS THEY PREPARE TO RAISE PROPERTY TAXES
April 4, 2008

Mayor Wharton and the County Commission are looking for ways to raise more money on the backs of overburdened residential tax payers. They claim that there are no places that they can cut. Bare boned they call the budget proposal. This is April Fools Day but this is no joke.

I will be the first to admit that the County is better than the City of Memphis in their transparency and their willingness to admit that we are in an unsustainable financial situation. However the City School System and the County are largely responsible for the huge county debt.

Starting in 1998 the Shelby County bonded debt outstanding for school purposes was $374 million dollars. This rose to $1.15 billion by 2007 due to the Average Daily attendance formula which caused this huge debt increase so that money could be sent to the Memphis City Schools which refuses to close unneeded schools. The general obligation bonded debt for Shelby County rose from $513 million in 1998 only to $626 million in 2007.

Look at the debt from 1998 to 2007 for school purposes, an increase of $780 million. Why has this happened when there has been no appreciable school population increase? When they build a county school for say $10 million, they raise $40 million and give $30 million to the City Schools. They do not need to do this as by law they can finance the $10 million dollar school with the county tax payers outside the City limits paying for the new school. They did this once on the Arlington High School. But now the County Commission will not allow this as they want to give the extra money to the City Schools. Humbug.

Then look at the roll up costs of city and county employees. Those employees with longer years of service can get up to 13 weeks per year of time off due to vacations, sick days, personnel days, holidays and bonus days that means that they can be off work 25% of the year. Obviously this means that more people must be employed to get the work done. Very few in the private sector have such benefits. We need to take a hard look at our government and see if we can tighten belts beyond what politicians say is possible.

We need to look down the road at consolidation and have an independent study done (not connected to any political group or politician) and determine if consolidation (like Metro Davidson) would really save a lot of money. I contacted Metro Davidson and got great cooperation from them with a prompt response to my questions. (Such a difference in my dealing with the City of Memphis).

I found the following information.
Total full time public employment for Metro Davidson is 9500 employees with an additional 1250 part time employees.

As near as I can tell Memphis has 6225 and Shelby County has 6802 for total of 13027. Our population is somewhat larger than Metro Davidson but similar government functions should not account for a 37% higher employment total.

We need to know if consolidation would be financially beneficial as we are headed in a downward spiral with the pending tax increases.

LAWYER RICKY WILKINS BACK AT THE HOG TROUGH AGAIN
March 31, 2008

On December 1, 2007 I sent the following open records request to our City Attorney, Elbert Jefferson.

Dear Mr. Jefferson,
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) I want to inspect the records and documents that show all information about the hiring of Mr. Ricky Wilkins and/or his law firm as a legal council or advisor to the charter commission. I want to see any contract or communication that shows the agreement as to the cost of his services to the charter commission and that addresses the services that he is to perform.

After repeated requests for a reply and preparation for a open records suit in Chancery Court, I finally got the following answer from Mr. Jefferson.

I am unaware of any separate contract for his services. You should have his existing contract already. The Charter Commission has requested the monies authorized by the Council last year for legal and other support services. If I am not mistaken, the Council authorized $100K for temporary support staff, legal and other services. Any Council actions on those items are available via the City Council's website.

I then emailed City Councilman Myron Lowery to tell him of the stonewalling of Mr. Jefferson and he got in touch with Mr. Jefferson and I got a prompt reply for which I thank Mr. Lowery.

This office previously responded to Mr. Saino that we were unaware of any separate contract between the Law Offices of Ricky Wilkins and the City of Memphis, by and through Charter Commission or its City Council. If I am not mistaken, Mr. Saino has previously requested and received documentation regarding the attorney fees paid to The Law Office of Ricky Wilkins. It is our understanding that the Charter Commission agreed to an unwritten arrangement in which The Law Office of Ricky Wilkins was to perform legal services averaged on a monthly basis at the rate of $210 per hour, not to exceed $15,000 per month. Payment at the $15,000 rate was made for two months. The Charter Commission reduced the amount of work required of Mr. Wilkins to an average of $5,000 per month. We are unaware of a formal document that sets forth the specific tasks to be performed; however, they appear to be numerous based on the proposed clean-up of the current Charter and specific items identified through the numerous community meetings. Only the City Attorney and Mayor have authority to hire Special Counsel. Thus, the City's existing contract with The Law Office of Ricky Wilkins was used for purposes of relating services between the City, the Charter Commission, the City Council and The Law Offices of Ricky Wilkins and payment of invoices. The City Attorney's Office pays the invoices and receives reimbursement from the City Council based upon the $100,000 dollars approved by last year's Council. Invoices from outside counsel contain privileged information, including proposed strategies and thus are protected by the attorney-client privilege. Nonetheless, it is my understanding that the City has paid approximately $50,000 for services rendered since September 2007.

Obviously, Mr. Jefferson knew this information all along but did not want to reveal the information until prodded by Councilman Lowery. It is interesting that there is no written contract and Mr. Wilkins billed $15,000 per month (the monthly maximum) until they cut him back to $5000/month and then he billed the maximum per month for four months for the $50,000 to date. I have been to most of the Charter Commission meeting and his $50,000 of work is certainly not in evidence. Also where are his billing and work records to justify the payment?

I have investigated legal fees paid to friends of the Mayor in the past but have not updated my files to current date. I have attached the 2005 records for Ricky Wilkins, Allan Wade and Robert Spence and you will see that Mr. Wilkins had received nearly $2.5 million dollars then. No telling what it is now. Nice work if you can get it and you can if you are a friend of our wonderful Mayor.

Click here to see the lawyer friends of the Mayor who are feeding at the taxpayers funded hog trough

AN UNSUSTAINABLE JOURNEY TO THE FUTURE
March 17, 2008

"Shelby County is now on what we all know is an unsustainable journey to the future." Mayor A. C. Wharton

Congratulations to Mayor Wharton for saying what many of us have known for some time but which few have had the courage to express publicly.

Click here to read the recent Memphis Flyer article stating a fact that few want to face but which is becoming more obvious every day

After reading the article a local person who I respect highly said the following. “Development still shapes policy in this town. Growth is a money maker in the short run and we as citizens pay for it in the long run. We have “bought...built” a bigger “house…community” than we can sustain.”

Memphis has always been run by developers but we can no longer continue to develop without planning and control. Developers hate the thought that this is needed and that the citizens can no longer pay for the schools, roads and infrastructure for their subdivisions and developments. We must plan for a sustainable future or there will be no future for Memphis and Shelby County.

FINALLY AN ANSWER ON THE NUMBER AND NATURE OF APPOINTED POSITIONS IN THE CITY OF MEMPHIS GOVERNMENT
January 28, 2008

Since September 13, 2007 I have been trying to get an answer as to how many appointed positions there are in Memphis city government. Also I asked for the cost of the January 2001 pension resolution to date and the annual cost going forward.

The latter two questions have been answered and I published the information in a recent posting to my website and blog. (www.memphiswatchdog.org and www.shelbywatchdog.blogspot.com). The cost to date is $6 million dollars and the annual cost going forward starts at $1.5 million and will grow.

Now the City says that there are 412 filled appointed positions which may vary some as some entire City departments are appointed (e.g. legal) and this figure may change from time to time. Sara Hall (the former City Attorney) had previously stated that the City Charter provided about 110 appointed positions. Also they are saying that there are 521 appointed positions (412 filled), 163 in the City Administration, 15 for the City Council, 3 for the Court Judges, 3 for the Court Clerk and 337 for the Library System.

Of these 412 filled positions, 377 are in positions or departments specifically named in the Charter and 35 were approved to be appointed by the Mayor and the City Council. Also they state that as of December 31, 2007, there were 44 positions that were over and above the 412 positions they claim are allowed and that these were converted to civil service positions starting in 2008.

Finally, they state that there are 161 positions that are eligible for the January 2001 (12-year) pension resolution and that there are 46 current appointed employees that meet the eligibility requirements for this 12 year pension ordinnance, that requirement being that they must have been employed prior to November 1, 2004.

What we, the taxpayers, must be vigilent about is the posssibility that someone in a lower paying position that is not eligible for the January 2001 pension rule is put into a higher paying slot, then retires and hence gains a higher pension at the taxpayer’s expense. This has happened in the past as the example of Janet Hooks shows. Fun and games at the taxpayer’s expense. See the attached file for all the details.

Click here to see the city's answer to the open records request about appointed positions

DID YOU KNOW THAT THERE ARE OVER 15,000 PIECES OF PROPERTY IN SHELBY COUNTY THAT PAY ZERO TAXES. HERE IS THE LIST.
March 3, 2008

I have shown attached the list of NO TAX properties as of 2004 here in Memphis and Shelby County. The long list is arranged alphabetically and a large number of the properties are churches and government properties. Churches seem to be a very large business if the number of them is any indication. Generally only the sanctuary is excluded from property taxes but there are a number of other exemptions for schools and other purposes and these are detailed in the Tennessee Code and can become very complicated. Obviously no operation by churches should compete with the tax paying private sector.

In the shorter list attached I have deleted those names that are obviously religious or governmental properties and left those other properties that pay no taxes. Also I have arranged them in decending order of property assessment. You will recognize by the address some very prominent pieces of property around town and in the county. As I have time, I will check out these properties to see why they are paying no taxes and report back.

Click here to see a 2004 list of non governmental and non church properties that pay no property taxes in Memphis and Shelby County

Click here to see a full list of Memphis and Shelby County properties that pay no property taxes

THE COST OF PILOTS IN MEMPHIS AND SHELBY COUNTY! WHO BENEFITS? WHO PICKS UP THE DIFFERENCE?
February 27, 2008

As the debate goes on about how to raise more tax money, there is a huge elephant standing in Shelby County sucking up tax money in great bundles. It is the PILOT (Payment In Lieu of Taxes) program. I have attached a spreadsheet compiled by the State of Tennessee for the year 2006. It shows that Shelby County gave away $48 million dollars (the difference between what should have been paid on the properties at the full property tax rate minus what was actually paid). Look at the names and amounts on the list. Were these pilots worth it? Are they being audited and reported to make sure that the original promises are being kept. Are the length of the pilots being extended without public notice? $48 milliion dollars would go a long way towards quelling the call for more taxes on the poor homeowner. Look at the difference between Davidson County (column A, #19 indicates Davidson County) and Shelby County (column A, #79 indicates Shelby County).

Click here to see that the pilot program is costing us $48 million per year. See who is getting the benefits as homeowners pick up the slack