VOL. 126 | NO. 239 | Thursday, December 8, 2011
Council Cautious About City Finances
By Bill Dries
Memphis City Council members set the tone for the beginning of a new four-year term of office at their next to last meeting of 2011.
And the message is the council intends to be an equal partner with Memphis Mayor A C Wharton Jr. in setting the city’s fiscal priorities, not waiting and then voting his proposals up or down.
The new council takes office in January and 12 of the current 13 council members will be back in the largest return of incumbents to the council in its 43-year history.
The council this week changed the terms of a percentage bonus for city employees to a flat bonus of $750, delayed a vote on three administration appropriations for $4.7 million worth of information technology projects and rejected a 5 percent water rate hike by Memphis Light Gas and Water Division and warned against planned pay raises for utility employees.
The combination of items reflects the concerns by a voting majority on the council that one-time funding that balanced the city budget for the current fiscal year is an ongoing concern.
“Every little dollar we find, we go out and spend it,” said council member Wanda Halbert.
“This is money we really don’t have,” said council member Kemp Conrad of the bonus. “We’re going to wish we had $5 million. … It’s half cocked. I just feel like we’re trying to keep up with the people across the street.”
The Shelby County Commission approved a $650 flat bonus for county employees Monday also to show up in paychecks before Christmas. And like the council, the commission rejected a percentage bonus or minimum amount.
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.
“We do not want to take on an additional cost that we cannot sustain going forward,” added city finance director Roland McElrath.
McElrath later estimated the city could face a $40 million gap between expenses and revenues for the fiscal year beginning July 1. Budget season at City Hall for that fiscal year begins in April.
The rejection of the MLGW water rate increase reflected broader concerns.
“This rate increase is 48 cents a month (per ratepayer), which is what you find in the couch cushions,” said MLGW president Jerry Collins. “This is being fiscally responsible in that it keeps us having a positive net income.”
Collins told the council the rate increase helps reverse a trend of revenue slipping as the utility loses customers.
“The expenses are shared by fewer and fewer people, which puts pressure on the rates,” he said.
“We’re losing customers because people can’t afford to live in Memphis, which means it’s compounded,” countered council member Harold Collins. “This council is not interested in asking the citizens of Memphis to shoulder any more burden.”
The council decisions also involved a mixture of outrage and district politics.
Before the three Wharton administration IT contracts were delayed, council member Jim 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 across the city on a waiting list.
“In four years, I’ve not gotten one complaint from a constituent about our website,” he said. “But I’ve got a ton of complaints about speed humps.”
Other council members tried to amend it to take a share of the funding for other projects, including Janis Fullilove who wanted $10,000 of it for the city to repave an alley next to a church.
“Anyone else have a project?” said council chairman Myron Lowery. “I don’t think we ought to do business this way.”
The council then sent the contract back to council committee in two weeks along with the other two contracts.
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.