Council Moves on School Funding Standoff

By Bill Dries

Memphis City Council members want to try to resolve the Memphis City Schools $57 million court judgment against the city as well as the city’s legal counterclaim that the school system owes it more than twice that by the end of this month.

Council members approved a resolution Tuesday, May 7, backed by the administration of Memphis Mayor A C Wharton Jr. to have attorneys for the council, the city and the school board begin talks.

Council member Shea Flinn sponsored the resolution as “an attempt to get all of those issues resolved wholesale.”

The resolution also drops the two cents on the city property tax rate that go each fiscal year to pay the debt service on an energy modification loan the city made to the school system. The two cents amounts to $1.5 million in revenue.

The loan is among the items the city claims it is owed for.

Memphis City Schools initiated the legal action in 2008 when the council cut the city’s annual funding to the school system. Attorneys for the school system went to Chancery Court claiming a cut in funding violated the state “maintenance of effort” law requiring local governments to maintain a certain level of local funding or risk the school system losing a much larger amount of state funding.

The city lost the trial court fight as well as the appeals court ruling and the Tennessee Supreme Court let the decision stand, refusing to hear the appeal by the city.

But the judgment was held up because of the city counter claim.

The judgment against the city is transferable to the new countywide school system that begins with the July 1 start of the new fiscal year.

Interim superintendent Dorsey Hopson, who was the school system’s general counsel in the maintenance of effort case, has said he is willing to negotiate with the city for some type of payment plan that would help provide the merged school system with additional funding even if it is only on a one-time-only basis.

Wharton has said he too is willing to discuss a settlement but is cautious about avoiding any settlement that might obligate the city to a new maintenance of effort amount for the consolidated school system.

In other action Tuesday, the council approved a golf driving range on Summer Avenue north of Sycamore View Road, a 240-unit apartment complex on 19.3 acres at Lenow and Dexter Roads and a 69-unit apartment complex on the northern side of Shelby Farms Park to the west of Germantown Parkway.

The council also approved a women’s resource center by Neighborhood Christian Center at 3028 Carnes Avenue.

Passing on the first of three readings were ordinance proposals to set the city property tax rate and the operating budget that amounted to fill-in-the-blank resolutions at this point. The council’s budget committee continued to hold hearings on the budget earlier Tuesday.

Also approved on the first of three readings was an ordinance by council member Kemp Conrad to eliminate pension “double dipping.”

The proposal specifically bans city employees who retire and get a city government pension from being rehired by city government and then getting paid for their work as well as continuing to receive their pension payments.

Benefit payments to a retired city employee would stop once they start working for the city again and there is a provision for recalculating benefits due after the second period of employment. But that amount would not be less than the benefit the employee was getting just before re-employment.

Conrad’s proposal would also require that retired city employees who go to work for Shelby County government, Memphis Light, Gas and Water Division, the Shelby County Schools system or any other local government entity would have their pension payment from the city reduced by whatever amount they made when working for the other government entity.

Meanwhile, council member Janice Fullilove pulled a $609,000 contract with Pencco Inc. for fluorosilic acid from the Memphis Light Gas and Water Division consent agenda for a committee hearing in two weeks after several citizens complained about adding fluoride to water supplies.

The utility’s consent agenda has attracted attention in recent months for other items related to the purchase of Smart Meters. Fullilove delayed a $10,000 addition to the utility’s Smart Meter demonstration program earlier this year after several citizens complained that the meters were a fire hazard or could be used to spy on citizens.

The council also reconsidered its rejection last month of $99,312 for sewer repairs at the Cedar Creek Sewer Extension in an area of Shelby County that is in the Memphis annexation reserve area. City Council attorney Allan Wade advised the council that there could be legal complications if it didn’t approve the item.

With the reconsideration the council approved the sewer extension.