VOL. 126 | NO. 238 | Wednesday, December 7, 2011
Council Passes Amended City Bonus, Rejects Water Rate Hike
By Bill Dries
Memphis City Council members approved a $750 flat bonus for all full time city employees Tuesday, Dec. 6, and a flat bonus of $200 for part time city employees.
Just as the Shelby County Commission did Monday for county employees, the council departed from the mayoral administration’s plan for a bonus as a percentage of pay.
In a marathon 78-item agenda covering a five hour meeting, the council went further in an ongoing give and take at City Hall about city fiscal and budget practices.
The council sent $4.7 million in three IT appropriations from the Wharton administration back to council committee for more discussion in two weeks. The council also did the same with two Memphis Light Gas and Water Division collection services contracts totaling $3.6 million. And the council rejected a request by the MLGW board to raise water rates by 5 percent starting next month.
Meanwhile, the Wharton administration and city employee unions reached a compromise agreement on city pension system changes Tuesday and the council ratified that agreement.
As in the original proposal several months ago, newly hired city employees going forward will have a minimum age at which they can retire.
The biggest change for city employees on the payroll for less than 10 years and therefore not vested is they and new hires will up their pension contribution from 6.5 percent to 8 percent at a half a percentage point a year for three years.
The city of Memphis would begin upping its six percent contribution with a study of going to the eight percent contribution level by 2015.
Before that level is committed to by the city, however, the administration and the union leaders will study the health of pension fund and its long term outlook.
Union leaders have maintained the city’s pension fund is in better shape than the administration estimates. The fundamental difference in outlooks was a barrier to reaching a compromise sooner.
Memphis Mayor A C Wharton Jr. maintained the pension plan for new hires and those not vested in the plan had to change or it would be unsustainable.
Meanwhile, the bonuses will show up on Dec. 22 paychecks of the more than 7,000 city employees.
Elected officials are not eligible for the bonuses. And the council gave final approval Tuesday to ordinances setting the annual pay of the mayor, all three city court judges and the city court clerk to reflect a 4.6 percent pay cut.
Some council members felt employees deserved the bonus from surplus funds in the fiscal year that ended June 30 because of the past calendar year of budget cuts, downsizing and in the case of city employees – a 4.6 percent pay cut.
Other council members were sympathetic but said the long term financial conditions that prompted the pay cut in particular are still a fiscal reality.
Because the surplus money is one time revenue, city chief administrative officer George Little told the council a one time bonus for employees “sacrifice” was the best use of the money.
“This really would be a rebate for employees,” Little said. “It seemed like the right thing to do.”
“We do not want to take on an additional cost that we cannot sustain going forward,” added city finance director Roland McElrath.
But council members parted company on the administration-proposed 1.5 percent bonus or $600 – whichever was greater – when it calculated that Little, the highest paid city employee getting a bonus, would have a bonus of $2,100.
“I think this is an easy thing to propose, but I think it makes our life much harder in four months,” council member Jim Strickland said referring to the upcoming city budget season.
“Every little dollar we find, we go out and spend it,” added council member Wanda Halbert.
Strickland and Halbert were joined by Bill Boyd, Kemp Conrad and Shea Flinn in the council minority that voted against the bonus.
The council was unanimous in rejecting a five percent hike in MLGW water rates to take effect in January. The rejection will cause MLGW to revise its budget for the water division to reflect $3.9 million less in revenue the rate hike would have produced. The council also passed a resolution sending the entire MLGW budget back and recommending pay raises for employees be deleted.
“Memphis Light Gas and Water probably needs to do some soul searching in house,” said council member Bill Morrison, “instead of putting it on the residents of the city. … I cannot even tell you the disappointment I had when the budget was brought here with a pay raise when city of Memphis employees have given up and sacrificed for us to be able to get our house in order.”
Before the three Wharton administration IT contracts were delayed, Strickland tried briefly to amend the $340,000 contract to develop a new city government website by proposing the money go for street humps on small neighborhood streets.
When other council members tried to amend it to take a share of the funding for other projects, the council as a whole referred the contract to committee.
The specific issue is a contract between the city and Linx Consulting.
From out of town, Linx principal Cardell Orrin kept up with the council action through tweets where he learned of the delay.
“Hope your company can do street humps, paving and web,” tweeted council member Harold Collins to Orrin after the decision.
In other action, the council approved $268,000 in funding to reroof the Mallory Neely House in Victorian Village and approved the contract between the city and the Overton Park Conservancy for the conservancy to operate and maintain the Midtown landmark for the city.
The council gave final approval to an ordinance requiring helmets be worn in the city’s recently opened skateboard park in Tobey Park and any other similar parks that may be opened in the future.
A vote on a planned development in Overton Square to include a parking garage was delayed two weeks which means the council will consider it in two weeks at the same time it takes up the question of city funding for the garage.
And an attempt to repeal the countywide ordinance with the city of Memphis that bans beer and other alcoholic beverages from strip clubs was pulled Tuesday before it could even be discussed in council committee.
All of the strip clubs affected by the ordinance which the county begins enforcing with the new year are located in Memphis.
The ordinance covers Memphis until or unless the city enacts its own ordinance with different terms.