VOL. 132 | NO. 84 | Thursday, April 27, 2017
City of Memphis Budget Could Face Bumpy Road
By Bill Dries
Memphis City Council budget hearings begin Tuesday, May 2, at City Hall starting with Mayor Jim Strickland’s $77.8 million capital budget proposal for one-time spending on construction projects and similar expenses that are normally financed with bonds.
After two days of hearings on what is normally the least controversial part of the budget season, council members begin hearings on Strickland’s $680 million operating budget proposal.
In presenting his budget to the council Tuesday, April 25, Strickland hinted that there probably won’t be a repeat of the unanimous vote with no amendments the council gave his first budget a year ago.
“This year’s budget was much more challenging for us than last year,” Strickland told the council, noting that at the outset it was $47 million in the red and $16 million in the red after seeing what his division directors want.
The proposed operating budget is $12 million more than the current fiscal year’s budget and that additional amount will be covered by anticipated growth in revenue streams.
“Last year we laid a foundation with that collaborative spirit and we adopted a budget that defined what I mean and you mean by being brilliant at the basics,” Strickland said. “This budget proposal … continues on that foundation and moves forward to making ours a stronger Memphis by sustaining that reorganization around core city services.”
Memphis Police would get 1 to 2 percent pay raises, depending on how long officers have been on the force, as retention bonuses that include an agreement to remain on the force for a certain number of years.
Strickland proposes putting $55.1 million toward the city’s pension fund liability, which is 88 percent of the required annual contribution the state requires the city make by the year 2020. If approved, the contribution would put the city five percentage points ahead of the state’s milestone at this point in the five-year ramp up to fully funding it in 2020.
Strickland expanded funding for city services aimed at teenagers and young adults as well as jobs programs at the top of his list of priorities for continuing his administration’s goal of being “brilliant at the basics.”
The budget proposal for the fiscal year that begins July 1 includes $18.5 million for street paving, which is $2 million more than in the current budget. Strickland also touted longer hours for libraries as well as opening some branches on Friday that had been closed on that day.
Storm water and sewer fees will increase a total of about $5 per household per month in the new budget. The fees are going up as the city continues to meet a federal court consent decree mandating sewer improvements as well as flood control measures by replacing crumbling and outdated infrastructure.
Still being debated is one of four options for changing solid waste pickup – only one of which would keep the monthly solid waste fee at $22.80 a month. The other three options raise it to between $25.05 and $32.80.
Because of the 2017 reappraisal of property for tax purposes, Strickland did not propose a specific tax rate. The city council will approve a recertified rate, based on the reappraisal, that brings in the same amount of revenue the city currently gets from the existing property tax rate of $3.40. Because residential and commercial values have increased, the recertified rate will be lower.
And Strickland said that lower rate the Shelby County Property Assessor’s office is expected to deliver next month will be the one he recommends to the council.
If there are no delays in consideration of various budget measures, the final council votes on the budget and tax rate should be at the June 20 council meeting after about six weeks of budget hearings.
With a fiscal year of his own making under his belt, Strickland’s prospects of gliding through the council in record time is unrealistic because he is now a mayor with a financial record.
“I’m not going to be the person that counts people’s money because I wouldn’t want anybody counting mine,” council budget committee chairman Edmund Ford Jr. said at the outset of the budget presentation.
That means he might not question the administration’s math, even though he is a high mathematics teacher by profession, but he is likely to at least question how the money is used.
“We did an excellent job last year in passing a budget in record time,” Ford said. “I just wanted to make sure we are prepared accordingly so we can do the same thing again.”
That means the council budget committee will start and stop budget hearings promptly with time limits on how long each council member can speak. And Ford will keep track with a timer as well as a calculator for the dollar figures and percentages being discussed.
While some on the council support Strickland’s priorities of being “brilliant at the basics,” other council members are critical of the priorities and Tuesday there was evidence that some question his pursuit of goals they do agree with.
The council approved a resolution Tuesday that refinances the city’s debt for Pyramid Redevelopment through a loan from the Economic Development Growth Engine organization. The debt is to be paid with Downtown Tourism Development Zone revenue.
The action drew no votes from council members Martavius Jones, Joe Brown, Patrice Robinson and Jamita Swearengen.
Jones was a vocal critic of the low level of minority and local participation by bond counsel and other finance professionals including underwriters, saying the administration could have done a better job and that the refinancing overlooked local attorneys who had worked on previous refinancing deals for the city.
“Professional services is low-hanging fruit. The will is not there to do it,” Jones said in a committee session earlier in the council day. “If I’ve got to run for mayor to improve black participation I will. I don’t want to.”
Council chairman Berlin Boyd, whose district includes the Pinch area, voted for the measure but also expressed his displeasure.
“We don’t own Bank of America and First Tennessee,” he said. “But there are a ton of African-American attorneys.”
Boyd said he would vote against future deals like Tuesday’s.
“For me it hasn’t moved fast enough,” he said of minority participation. “But it’s moving. I am extending a branch to the administration.”
Jones is drawing a line on minority and local contracting as Shelby County commissioners have drawn a similar line on county government contracts connected to $60 million in federal funding for flood control and resiliency development projects in three parts of the city and county.