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VOL. 128 | NO. 91 | Thursday, May 9, 2013

City Council OKs School Funding Talks

By Bill Dries

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The newest front in the move to the schools merger in less than two months is an old legal claim that continues to pop up as the countywide school board looks for any new funding it can secure.


Memphis City Council members passed a resolution Tuesday, May 7, to start negotiations among the council, the administration of Memphis Mayor A C Wharton Jr. and the countywide school board.

On the table is the Memphis City Schools system’s court judgment against the city for $57 million and the city’s counterclaim for more than twice that in money it claims MCS owes the city over several years.

The counterclaim has prevented the school system from collecting on the Shelby County Chancery Court judgment upheld by the Tennessee Appeals Court.

The resolution sponsored by council member Shea Flinn sets a deadline of the end of this month for working out a resolution.

“We hear all the time in the media about the $57 million … that we owe them,” Flinn said. “You very rarely here about the amount they owe us. This is an attempt to get all of those issues resolved wholesale.”

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 judgment was held up because of the city counterclaim.

It is transferable to the new countywide school system that begins with the July 1 start of the fiscal year.

The council resolution also drops the two cents on the city property tax rate that goes 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.

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 wants to avoid one that might obligate the city to a new maintenance of effort amount for the consolidated school system.

On another legal front at City Hall, council attorney Allan Wade issued a legal opinion Tuesday that gives the council three options in its standoff with Shelby County government and the state of Tennessee on auto emissions testing.

The council voted last year to end all city funding for the inspections effective June 30, the end of the current fiscal year.

One option, according to Wade, is to transfer the inspection duties to county government, something County Mayor Mark Luttrell hasn’t been wiling to do.

Another is for the council to exempt city of Memphis vehicle owners from the emissions inspections for the estimated two years state officials have said it would take them to assume the responsibility and apply to all vehicle owners countywide.

“That way we would be placed on parity with county residents,” Wade said, referring to current inspection rules that require only city vehicle owners to undergo the inspections. If the Tennessee Department of Environment and Conservation – the state agency involved – or federal environmental officials say just city vehicle owners have to continue getting the inspections, it would force a legal fight on the issue.

Wade called the scenario “a classic equal protection challenge.”

The third option is an “environmental attainment” fee imposed by the council on all cars in the city no matter where the driver lives, with the fee payable at inspection.

Wade acknowledged a “privilege fee” for vehicle safety is prohibited.

But he said federal law “allows the city to adopt your own air pollution control regulations.”

“We could require them to go through emissions testing and charge them a fee,” Wade added.

Several council members indicated Tuesday they are likely to propose various ordinances based on the legal opinion at the May 21 council session.

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