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VOL. 128 | NO. 106 | Friday, May 31, 2013

Wharton Pitches Options But No Recommendations On Budget Reset

By Bill Dries

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Memphis City Council members were looking Thursday, May 30, for a new budget plan to get City Hall on new financial footing after a state comptroller’s office report critical of city financial practices.

At the least they wanted to know how it might affect the city property tax rate.

Instead what they got was a list of possible options from the administration of Memphis Mayor A C Wharton Jr., some without any cost attached and a pitch for relocating police headquarters to the old police building in the next five years.

The council budget committee session Thursday was supposed to be the wrap up to budget deliberations before the full council starts voting on the tax rate and budget next week.

Instead Wharton said later that he and his staff will work through the weekend to present the council with more specific options Tuesday.

“Take a stand on something,” council member Kemp Conrad told Wharton at one point using a proposed Cooper-Young parking garage as an example. “Are you for it or against it.”

City Finance Director Brian Collins said the administration didn’t include it in capital improvements projects for the fiscal year that begins July 1.

Conrad described the budget deliberations as “a broken down process” with “asinine meetings” in which the council and administration “try to Frankenstein a budget.”

Wharton and his administration presented scenarios for paying more on the city’s debt which was restructured in 2010 with higher debt payments pushed into future fiscal years starting with the one that begins July 1. The options also included paying pension and other post employment benefits (OPEB) obligations completely or partially.

All are items the comptroller’s office report said city government should focus on paying down instead of pushing the debt and obligations into future fiscal years.

The scenarios were mapped out for their impact on city government if the council kept the existing city property tax rate of $3.11 and if the council increased the property tax rate to $4.83 to fully absorb the cost of $181.4 million and fully restore the 4.6 percent pay cut all city employees took two years ago.

The $3.11 tax rate scenarios involved partial payments in the first fiscal year with a goal of meeting the obligations over several years or paying it all in one fiscal year.

The first scenario included laying off 1,420 city employees and the second included laying off 3,250.

A fourth scenario is a 25-cent property tax rate hike to a rate of $3.36 that Wharton says would produce the same amount of revenue the city gets with the $3.11 rate, taking into account the drop in property values from the 2013 property reappraisal.

Council member Shea Flinn said the council and the administration are caught between a $3.11 tax rate “but living a $4.83 lifestyle.”

“I don’t think we are going to have a budget,” he said earlier in the discussion of a council decision on Tuesday.

“It might be that we just cool our heels and order some cots for Tuesday,” council member Harold Collins said of next week’s council session.

Council member Janis Fullilove pushed hard for answers about the origins of the financial problems cited in the state report.

“I can’t answer how we got into this situation that we are in at the 11th hour,” she said. “And then Mr. Mayor you tell me you don’t know because there are audits being taken every year and this stuff just kind of went on. That indicates to me that maybe you shouldn’t be the mayor of Memphis.”

Meanwhile, city chief financial officer and housing and community development director Robert Lipscomb presented a basis for a five-year budget plan to council members that was also shorter that most council members present had thought it would be.

Lipscomb talked of shifting an estimated $30 million in capital revenue the city planned to spend at the Fairgrounds and using it for an “immediate fusion” of operating expenses.

And he pushed for a capital project – the move of Memphis Police headquarters from the county government-owned Criminal Justice Center to the old police building at Adams Avenue and Second Street, just a few blocks away.

“If we can start dealing with public safety as a unit … we think that’s a way to go,” he said. “We think to have one building and one site is really a good start.”

Lipscomb said the cost would be covered with the money the city now pays the county for the space at the Criminal Justice Center.

Collins called it a “grandiose idea.”

“We are going to get calls saying, ‘Where are my sidewalks? Where are my speed humps?’” he told Lipscomb. “If we don’t provide the minimal level of success they can gravitate to then you will continue to have the huge disparities of poverty because they see nobody working for them.”

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