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VOL. 126 | NO. 144 | Tuesday, July 26, 2011

MCS Board Sets Tuesday Meeting On City Funding Standoff

By Bill Dries

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Memphis City Schools board members meet in special session Tuesday, July 26, at 7:15 p.m. to take up the offer by the city of Memphis to pay $64.8 million in installments to the school system.

The payment plan would defuse a threat by the board to delay the Aug. 8 start of the school year until MCS was paid one of several dollars amounts the school system says it is due. If the board accepts the payment plan it would rescind its resolution demanding the full amount of city funding before the school year could begin.

The meeting of the school board was to be held Friday. But it was postponed as MCS attorneys reviewed the city’s proposal worked out over two days after the board passed and sent its ultimatum to City Hall.

The threat suddenly catapulted the three year long funding dispute between MCS and the city to the top of the local political agenda. The dispute began in April 2008 when the Memphis City Council cut city funding to the MCS.

The installment plan to be considered by the school board Tuesday evening begins with a $15 million payment from the city by Aug. 15. There is a formula for the other payments that are based on when the city has passed on tax revenue to the school system in past fiscal years.

MCS board president Martavius Jones is confident the formula will prove the school system’s point that it has traditionally had the bulk of revenue due from the city by September or October.

More outspoken board members contend the city has been intentionally delaying the payments to the school system since the funding dispute.

Memphis Mayor A C Wharton Jr., who took office in late 2009, wasn’t critical of the postponement of the Friday board meeting. And he told political supporters Saturday that he remained confident the MCS school year would start on schedule.

He also stuck by his initial points that the city didn’t have the money in one lump sum and has been paying the school system on time.

“The difference between a budget and accounting is during an accounting you say, ‘Here is the money I have.’ When you say here’s the budget it’s, ‘Here’s the money I’m going to get,’” he told reporters. “If we would have pulled $55 million out of our reserves … our credit rating would drop like a rock. … What’s we’ve said is when the money comes in, we’ll send it over there to you.”

The council is scheduled to vote Aug. 2 on the school system’s budget for the fiscal year that began July 1 which would include the payment plan.

PROPERTY SALES 92 480 7,835
MORTGAGES 115 551 8,785
BUILDING PERMITS 325 1,167 17,068
BANKRUPTCIES 39 311 5,159