VOL. 128 | NO. 192 | Wednesday, October 2, 2013
Council Delays Sanitation Changes
By Bill Dries
Memphis City Council members put off a final vote Tuesday, Oct. 1, on raising the city’s monthly solid waste fee until December citing an upcoming fix to the city’s pension fund liability crisis.
At least that was one of several conflicting reasons that surfaced in council debate and discussion.
Approving the rate of $25.05, which had been the monthly fee until the July 1 start of the fiscal year, would be the first in a series of actions that would kick off changes in city sanitation services and lead to a retirement supplement for city sanitation workers.
Some on the council wanted to approve the supplement at the same time as the hike in the solid waste fee. Others on the council want to vote on all of it when they know what Memphis Mayor A C Wharton Jr. will be recommending in terms of increased funding for the city’s pension fund liability.
Some council members say the pension supplement is a pension. Other council members and the administration say it is not a pension and does not impact the city’s pension liability because it is funded with savings from the change in sanitation operations.
The fee would fund the purchase of new vehicles for the sanitation department to replace vehicles that are in some cases 17 and 18 years old. It would also go toward making the first of several purchases of new garbage carts. With those two purchases, sanitation services would move to adding 100 stops per garbage route per day, a plan worked out in an agreement between the administration and the American Federation of State, County and Municipal Employees, the union representing sanitation workers.
The savings from what city Chief Administrative Officer George Little termed the “sweat equity” of the workers would fund the pension supplement and if the savings don’t amount to enough for the maximum $1,000 a month supplement then the city would not be liable for the money.
However, some on the council say that politically the city would have a hard time walking away and not finding the money in some way to make good on the obligation even if it is not legally bound to.
In other action, council members approved $1.5 million in capital funding for renovations to Southbrook Mall in Whitehaven that are contingent on a legal opinion from the city attorney’s office on whether the use of the bond money amounts to a private use that is prohibited by the federal tax code.
The mall is owned by a nonprofit group and the capital funding is from funding for improvements to the Elvis Presley Boulevard streetscape from Brooks Road on the north to Shelby Drive on the south.
If the Internal Revenue Service ultimately finds that using $1.5 million for roof repairs and other similar items in the mall is a “private use” it could endanger the tax exempt status of the bonds not only for the mall but for the streetscape project as well.
The council also reversed the Land Use Control Board in its approval of the two-lot Tate Grove subdivision on what is now a one-home lot on the northeast corner of Mendenhall Road and Minden Road in East Memphis. A nearby homeowner appealed the decision to the council saying the setback for the two homes is not in keeping with standards in the neighborhood and should not have been granted a waiver on those standards. The council agreed.
The council also approved the establishment of an inner city economic development fund to be administered by the Economic Development Growth Engine. The fund begins with a balance of $508,000 that has been accumulated over several years from a five percent fee on personal property taxes abated through payments in lieu of taxes on economic development expansion and relocation projects that apply for the tax break. The five percent fee is up to a maximum of $50,000.
EDGE president and CEO Reid Dulberger said the annual amount to come for the fund will not be a steady amount but that $100,000 a year would be a “good year” for the fund.
The council also delayed for two weeks votes on two Memphis Light Gas and Water resolutions that authorize the utility to make two payments totaling $255,000 to the Greater Memphis Chamber. Both payments are for economic and community development efforts in general with $40,000 of the funding to be reimbursed to MLGW from the Tennessee Valley Authority.
Council member wants more information on specifically how the money is used and will discuss it in Oct. 15 committee sessions.