Memphis City Council chairman Edmund Ford Jr. and council members Harold Collins and Lee Harris will have plans for the full council to consider when the body meets Tuesday, June 25, in special session.
Ford’s plan leads with $30.3 million in budget cuts and savings. Half of that -- $15.7 million – is from laying off 100 employees and letting another 300 go through attrition. Ford’s plan does not include a buyout offer for city employees as proposed by Memphis Mayor A C Wharton Jr.
Ford calculates an attrition premium that starts the year after the upcoming fiscal year of $9.4 million across fiscal years 2015 and 2016.
“It addresses all of our issues,” Ford said of his overall plan. “I don’t know what any other council member has.”
His other proposed cuts are $2.6 million from eliminate non public safety positions that are funded in the budget proposal but which are vacant. Ford would cut $501,000 by eliminating the city’s weights and measures program and handing it off to state government to run.
The reductions on that side of the ledger include $6 million from the transfer of street lighting from the city to Memphis Light Gas and Water Division, an action the council approved last week.
On the other side of the ledger, Ford is proposing $17 million in additions to the budget including $600,000 to restore past years of budget cuts to community centers and parks, another $600,000 toward a library strategic plan and $700,000 to add 11 code enforcement inspectiors.
Ford would also restore $606,000 in cuts to the Memphis Area Transit Authority. The biggest pieces of his additions are $4 million in health care premiums and $1.5 million to reinstate cuts the council made earlier in the process to materials and supplies for each division of city government.
Ford also includes $9 million to restore the city’s reserve fund and pay more debt service. The $9 million would be funded with a 9-cent property tax hike.
The $17 million in additions brings the net savings from his overall plan to $13.3 million.
Ford’s plan without any of his budget additions comes out to a $3.07 city property tax rate, four cents lower than the current $3.11 rate.
With the additions factored in, Ford estimates a property tax rate of $3.23, 12 cents higher than the current rate. But it is 13-cents lower than the $3.36 rate Wharton estimated it would take just to generate the same amount of revenue the current tax rate does, taking into account property value lost in the 2013 property reappraisal.
Wharton proposed a 15-cent tax hike on top of that to replenish the city’s reserves and pay down the city’s debt.
The final piece of Ford’s proposal is a highly anticipated move by several on the council to reopen the council’s rejection last week of a 4.6 percent pay raise for all city employees. The pay raise would restore the 4.6 percent pay cut city employees took two years ago and the restoration is a $12.5 million line item. That would bring Ford’s estimated property tax rate to $3.35.
Harris is also proposing a restoration of the earlier pay cut but with some conditions.
Harris would carve out city workers hired after the wage cut took effect as well as “high-earning” city employees or employees who got a pay raise larger than 4.6 percent in the last two years in the “salary adjustment process.”
Harris defines “high earning” as somewhere between $80,000 and $100,000 a year as a starting point.
“It’s all in the eye of the beholder. … As a general matter, for a city employee, $100,000 is a serious amount of money,” he said. “Where do you draw the line? I don’t think anybody has a problem at $100,00 and there are some on the council who would like to draw the line at $80,000.”
Harris also wants city employees to give up one paid holiday and municipal unions to drop the federal court lawsuit they filed two years ago over the pay cut.
“This is low hanging in my view. They should want to drop that lawsuit,” Harris said, adding he plans to talk with heads of the major municipal unions by the start of Tuesday’s meeting at 3:30 p.m. to gauge how they feel about the plan.
Harris’s plan deals only with restoring the 4.6 percent pay cut.
“When you introduce one thing and there are multiple parties, they introduce half a dozen other things,” he added. “The difficult part is to keep the conversation constrained to just the 4.6 percent.”
Collins also calls for a restoration of the 4.6 percent pay cut without Harris’s conditions.
His proposal includes employees leaving the city through attrition but no layoffs.
And Collins has taken a debt payment out of his budget plan, following the administration’s explanation last week that the bond debt restructuring approved by the council saves the city $9 million in future debt.
Collins’ plan has a bottom line property tax rate of $3.31.