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VOL. 129 | NO. 19 | Wednesday, January 29, 2014

Wharton Faces Challenges in State of the City

By Bill Dries

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Memphis Mayor A C Wharton Jr. may face the most challenging year of his tenure as he delivers his State of the City address Wednesday, Jan. 29.

The speech will be delivered at 10 a.m. at the University of Memphis Cecil C. Humphreys School of Law.

“These aren’t cuts. It’s the whole matter of doing things differently.”

–A C Wharton Jr.

And the exit of two deputy directors in the public works division last week at City Hall may be an indication that Wharton plans to replace past talks emphasizing optimism about the city’s future with changes in the specific trajectory of city efforts.

Deputy Public Works Director Onzie Horne oversaw Wharton’s much touted blight program that hires contractors to cut overgrown lots with and without vacant houses on them. With a $3.5 million budget for grass-cutting, Horne resigned at the end of the grass-cutting season as some of the vendors had complained that they weren’t being paid timely.

Deputy Public Works Director Andy Ashford oversaw the solid waste division of public works, which Wharton has talked about changing for several years.

The Memphis City Council has approved some of those changes. But they are part of, and not the whole of, an agreement the administration made with the American Federation of State, County and Municipal Employees, the union that represents sanitation workers.

The council approved a retirement supplement of up to $1,000 a month for sanitation workers, but it twice voted down increasing the city’s solid waste fee to pay for an upgrade of the sanitation fleet. That upgrade is a key part of adding more stops to the daily garbage routes. And those stops make possible the savings that are to fund the supplement.

The council took the action after the administration said no increase in the solid waste fee would make what follows more difficult but not impossible.

Two weeks later the administration was trying to get the council to reconsider its decision on the fee hike.

Wharton has already prepared the political ground at City Hall for more discussion to come on cuts and realignments to public safety, primarily the Memphis Police Department budget.

It is the largest of any division of city government and the only division that has seen an increase in general fund funding as other divisions have taken cuts. Its mission is also a bedrock service that those on all parts of the political spectrum about what constitutes a basic city service can agree is a fundamental role of local government.

Wharton reeled back in Memphis Police Director Toney Armstrong’s statement to the council that cutting more than 500 police officers was being considered, a move Armstrong said would take his complement down to 1,900.

“These aren’t cuts. It’s the whole matter of doing things differently – providing the same services but doing them differently,” Wharton said. “Do we have to have uniformed officers sitting behind a console at the Real Time Crime Center? When we say making some changes, we’re not saying get rid of everybody. … We have to make some choices though. If you have a fender bender out here, no personal injuries, do you really have to tie up a uniform officer?”

The Memphis Fire Department is the other part of the city’s public safety dilemma and Wharton admits it poses challenges that changes to the police department’s seven-year-old “boots on the ground” emphasis does not.

“It’s going to be harder in the fire department because they bit the bullet three years ago,” he said. “That’s going to be more difficult.”

Wharton’s goal is to find $15 million in new revenue each fiscal year for the next five years to get the city’s annual contribution toward its unfunded pension liability from the current $20 million to $100 million.

The centerpiece and what Wharton is emphasizing to state government leaders in Nashville is changes going forward for new hires to city government and those employees with less than 10 years of service who are not vested in the current pension plan.

Chief Administrative Officer George Little said the administration intends to take a resolution to the council in February that is the first step toward pension reform. It would switch new hires and unvested city employees to a defined contributions plan similar to a 401(k) plan. The current city pension plan is a defined benefits plan that the administration’s actuary, Pricewaterhouse Coopers, has told the city is “unsustainable.”

The firm advising the administration on municipal finance, Public Financial Management, made even clearer this month the link between the city pension fund liability and goals Wharton persists in pursuing like blight control, economic development and reducing violent crime.

“Absent significant changes in compensation, it’s impossible for the city to balance its long-term desires with its short-term and long-term critical stability,” Seth Williams of PFM told the council at a Jan. 21 committee session.

PROPERTY SALES 92 242 2,507
MORTGAGES 108 336 2,943
BUILDING PERMITS 202 643 6,711
BANKRUPTCIES 43 176 1,963