VOL. 129 | NO. 226 | Wednesday, November 19, 2014
Council Votes Down Water Rate Hike, Wharton Hybrid Pension Plan
By Bill Dries
Memphis City Council members voted down a water rate hike of 2.3 percent Tuesday, Nov. 18, proposed by Memphis Light Gas and Water Division. And the council voted down Memphis Mayor A C Wharton Jr.’s hybrid pension plan change for city employees with under 10 years on the job.
The water rate hike was recommended by the utility board specifically because of the closing of the Cargill Inc. corn mill in Memphis by the end of the year. Cargill is the utility’s largest single water customer with the closing meaning a loss of $1.8 million in revenue to MLGW.
But most on the council felt hiking water rates before the closing was premature. They thought it could wait until next year when MLGW president Jerry Collins said the utility will probably propose another water rate hike of $1.40.
Council member Myron Lowery also said and Collins confirmed that talks are underway for a new tenant at the corn mill plant and that about 50 of the 440 employees with Cargill at the corn mill will remain employed in Memphis in a much smaller operation.
Meanwhile, the council approved Memphis Light Gas and Water’s annual budget.
The council acted to eliminate Wharton’s hybrid pension proposal Tuesday on the second of three readings for the ordinance. The council approved on second reading an alternative by Lowery that would include only new hires for the hybrid proposal.
Wharton proposed the hybrid pension plan which includes a percentage of employee and city contributions to a market-based retirement plan as well as another percentage to a defined contributions plan for new hires and city employees with less than 10 years of service. Those employees with less than 10 years are “unvested” in the existing defined benefits city plan.
Most council members indicated they wanted to pick either Wharton’s plan or Lowery’s plan before third reading to show decisiveness and end uncertainty among city employees.
Lowery’s plan advanced to third reading. The defeat for the hybrid ordinance on second reading means it does not advance to third and final reading next month, under council rules.
The council acted a week ahead of a meeting with its actuary consultants, Segal Consulting of Atlanta, in which Segal will give the council its thoughts on the hybrid plan as well as other options before a final vote.
Some on the council voted against the hybrid plan with the understanding that if they hear something that changes their mind from Segal next week they will move to reconsider the action at the first council meeting in December.
The pension plan changes in whatever form would take effect in 2016.
Council members also approved on third and final reading Tuesday an ordinance that sets up a system of licenses and permits for telecommunications companies to use city rights of way and utility easements for their communications systems.
A coalition of 18 telecom companies urged the council to delay the final vote on what is the system for charging the fees but does not set the fees themselves at this point. They wanted more time to have their experts look at it.
But council attorney Allan Wade argued he wanted to have the city’s position set for a pretrial conference Dec. 5 in Memphis Federal Court in a lawsuit filed against the city in January by Telepak Networks Inc., which does business as C Spire Fiber.
The city has a counterclaim against Telepak in the same court.
The lawsuit, which has a Dec. 15 trial date, is over the city’s move to regulate the use of the right of ways and charge fees. It’s a heavily litigated issue in general.
With an ordinance approved, Wade and the telecom executives plan to meet later this week to talk over their differences on what the council approved instead of a potentially broader discussion without the companies reacting to a model set by the council.
As was the case in the pension vote, some council members voting for the telecom ordinance on final reading did so with the caveat that there may be more changes before the council approves the minutes of the Tuesday meeting.
The coalition of companies includes some cable companies who have reached separate agreements with the city in the interim to pay city fees under individual contracts. They are not affected by the ordinance approved Tuesday.
The council action capped a busy night at City Hall that ended with council vice chairman Myron Lowery being elected unanimously as the new chairman of the 13-member body starting in January.
Council member Kemp Conrad was elected vice chairman in a contest with fellow council member Wanda Halbert.
Halbert has long complained that the council should rotate the chairmanship annually based on seniority with those council members who have served as chairman before wait for a second turn until all council members who want the chairmanship have had one turn.
Lowery, who is the council’s longest serving member – elected in 1991 – has been chairman four other times.
Halbert also complained Tuesday that while she didn’t campaign for chairman or vice chairman, others on the council did so by email.
Council member Janis Fullilove, who nominated Halbert, said some council members whom she didn’t name were of the “mindset” that women should be “barefoot and pregnant and keep their mouths shut.”