Finding ‘Delicate Balance’

Wharton says city must deal in realism

By Bill Dries

Memphis Mayor A C Wharton Jr. leaned heavily on reality and the practical in a State of the City address Wednesday, Jan. 29, at the University of Memphis Cecil C. Humphreys School of Law.

“We have the responsibility of balancing the expectations of our citizens versus the bottom line of our budget,” Wharton told an audience of several hundred, including city division directors and those in agencies working with the city. “We must strike the delicate balance of our affairs that is based in realism and pragmatism. This is important because ultimately the numbers that define our budget are real. The decisions that have the most positive impact are practical, and the work we have to do cannot wait.”

Memphis Mayor A C Wharton Jr. emphasized "the delicate balance of our affairs that is based in realism and pragmatism" Wednesday, Jan. 29, in his annual State of the City address.

(Daily News/Andrew J. Breig)

A large part of the reality of the budget proposal Wharton is shaping for presentation to the Memphis City Council in April is the city’s unfunded pension liability.

Wharton’s plan to meet that liability is to add approximately $15 million in new revenue each year for the next five fiscal years to get the city’s annual pension contribution from the current $20 million to $100 million.

“We are where we are because of forces far beyond our control,” Wharton said of the pension problem.

He didn’t use the word “cuts” in describing a general approach to rearranging revenue to go toward the pension goal. He instead continued to refer to changes as “efficiencies” that will include changes in public safety services of the Memphis Fire and Memphis Police departments, the two biggest divisions in the city’s overall operating budget, in terms of employees and dollars.

He also talked in general terms of moving new city hires and unvested city employees with less than 10 years of service to a defined contribution plan similar to a 401(k) in a departure from the current defined benefits system.

That proposal is expected to reach the Memphis City Council in February, according to city Chief Administrative Officer George Little.

“This will be debated,” Wharton added of what he expects the reaction to be from City Council members and leaders of the city’s municipal unions. “It is clear we must make changes.”

And Wharton again said raising taxes to solve that part of the city’s critical financial problem is not an option.

“It is a bit difficult to go to our residents and say, ‘We want to raise your taxes to take care of our pension plan,’ when I look them right in their face knowing full well that they do not have a pension plan,” he said.

Wharton also outlined a continuation of city efforts aimed at broader goals, including reducing the city’s poverty rate. But the speech was notable because Wharton talked of more immediate smaller-scale solutions than in past State of the City addresses.

An example was Wharton’s announcement that the Memphis Area Transit Authority will have bus service to the new Conduit Global call center in Cordova.

“We didn’t give them any money,” Wharton said of MATA after his speech. “We simply realigned our services. … What kills us on poverty efforts is that we say we’re going to wipe out poverty. You are not going to do that.”

Instead, Wharton outlined measures aimed at specific problems of poverty. The new bus route will be followed by more new bus service made possible when federal leaders with whom Wharton met in Washington last week told him federal funds in the transit authority’s budget could be rearranged.

“We found out that there are programs out there that we didn’t even know about. … We had everybody on the phone,” he said. “It’s just a matter of cutting through the red tape and making it easy to use existing funds. MATA actually has some funds there now, but until we intervened, they could not use them to run that bus route out there.”

The city has to match the federal funding, which it will do by diverting federal Community Development Block Grants with the permission of the federal Department of Housing and Urban Development.

Wharton said it is the start of a shift in the transit authority’s approach to transportation.

“We did not ask to what end are you getting them safely from point A to point B,” he said of MATA’s current approach and changes to come that will be part of what he has called the “Blueprint For Prosperity.”

“The blueprint will not necessarily focus on how much more money, but make it less costly for those who are hovering right around the poverty line,” Wharton said. “If we simply reduce the cost of living we are giving those in poverty another check.”

The specific goal of the blueprint is to lower the city’s poverty rate of 27 percent by 1 percentage point a year for a decade.