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VOL. 129 | NO. 63 | Tuesday, April 1, 2014

Council to Weigh Pension, School Funding

By Bill Dries

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Memphis City Council members take a closer look Tuesday, April 1, at recommendations to cut city spending and use the savings to devote to the city’s unfunded pension liability.

Meanwhile, the council votes on a resolution that would set aside $4.8 million a year for the next 12 years to pay the $57 million city government owes Shelby County Schools for cutting city funding to the legacy Memphis City Schools system in 2008.

The council meets at 3:30 p.m. at City Hall, 125 N. Main St.

Memphis City Council members will talk Tuesday about a proposal by council member Lee Harris, left, to set aside money over 12 years to pay the $57 million a state court has ruled the city owes Shelby County Schools.

(Daily News File/Lance Murphey)

Follow @tdnpols, www.twitter.com/tdnpols, for live coverage of the meeting.

The schools funding resolution by council member Lee Harris is on the agenda for a vote.

But there are no items up for a vote Tuesday on the unfunded pension liability.

The council discussion at the 1:30 p.m. executive session will be a review of a report the council received in January from Public Finance Management, the municipal finance adviser to the city. At Tuesday’s executive session, the administration could give the council its recommendations on which of the items in the report it backs.

In the report, PFM outlines $284.1 million in cuts the city could consider over five fiscal years.

The bulk of that amount – $247.4 million – is expense cuts, including lowering the city’s health care premium costs with changes in the health care plans for city employees.

PFM’s recommendations elsewhere include $40.6 million in reductions to the city’s workforce through attrition and $35.4 million in a restructuring of emergency medical services offered by the Memphis Fire Department.

The council’s discussion with the administration has been dominated since late last year by the issue of how far the city should delve into public safety spending to fully fund the city’s pension liability. Public safety services through the fire and police departments are the two largest divisions in city government, both in terms of funding and personnel.

Harris’ resolution would create a separate fund for paying the schools settlement once an agreement is reached or a counterclaim filed by the city against Shelby County Schools is decided or settled as part of an agreement.

Harris, who was elected in 2011, six years after the council’s decision to cut schools funding, has said he believes the city should have paid what it was ordered to pay long ago.

“If we can’t stop this litigation, it’s at least time for the city to make serious preparations in the event that the city’s lawyers are unable to make SCS’ claim go away,” Harris said last week.

The money put aside each year would go into a schools litigation fund that would be part of the city’s annual operating budget starting with the fiscal year that begins July 1.

The money in the fund could only be used to pay the court-ordered judgment or a settlement amount. If the city ultimately does not have to pay the judgment, the money would go into the city’s general fund.

Past attempts at talks between the school system and the city to reach a settlement have all either failed or never reached the point of discussion. But the framework for such talks has included the possibility of the city making payments over several fiscal years instead of paying a lump sum.

Also up for committee discussion Tuesday is a resolution that would charge 15 cents per page for black-and-white copies of any city public record, including a police traffic accident report, as well as “labor charges” if it takes a city employee more than an hour to produce the material.

“The city of Memphis feels that the cost of retrieving, reviewing, producing, redacting and removing confidential or exempt information as allowed by law and copying same should not be borne by the taxpayers, but should be paid by the requesting party,” reads the resolution to be discussed at the 8:30 a.m. committee session.

The labor cost is based on the hourly pay of the employee, not including benefits. The final bill deletes one hour from the time spent of the highest-paid employee involved in finding and copying the record.

Meanwhile council members and Shelby County Commissioners met Saturday, March 29, in Midtown in the first joint discussion session of its kind since February 2008.

The 2008 session came two months after council members began a new term of office in which a majority of the council was newly elected.

Saturday’s session came as seven commissioners near the end of their current terms at the end of August.

At least seven new county commissioners will take office Sept. 1, based on seven incumbents who are not seeking re-election, six of whom are term-limited and barred by law from doing so.

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