The new Shelby County mayor and County Commission elected in August will have some major budget decisions to make once they take office Sept. 1, including a new Regional One Health Center building that could cost more to build than the $250 million FedExForum and a permanent source of county funding for the universal prekindergarten effort.

MARK LUTTRELL

Shelby County Mayor Mark Luttrell said Wednesday, May 9, those two funding decisions are not in his budget proposal for the fiscal year that begins July 1. But Luttrell and chief administrative officer Harvey Kennedy offered some dollar figures and possible scenarios before county commissioners this week.

Luttrell is proposing $1.5 million from county reserves as “seed money” for the push to expand prekindergarten countywide from 7,000 children to 8,500 over several fiscal years. That’s in addition to continuing the $3.5 million in annual funding the county is currently providing for pre-K.

For the fiscal year that begins July 1, 2019, Luttrell is suggesting the county begin a ramp-up to $5 million in county government funding for pre-K, in addition to the $3.5 million in existing funding, for a total of $8.5 million.

That would be combined with the $6 million the city of Memphis has committed to provide in a ramp-up over several fiscal years. The city and county funding would leverage another $23.5 million in private and philanthropic funding for a larger system of early childhood education including wrap-around social services for children and their families that would extend into the kindergarten through third-grade years.

“We’re fully supportive of the effort to provide universal pre-K,” Kennedy said. “The real issue is to get some funding planned and ready to go by July 1, 2019. For the next four months, this administration is all in for the funding of universal pre-K.”

The administration has not said how it would fund the county’s commitment, but Kennedy has said it likely will not be the same as the city’s path.

Kennedy said the county surplus for the current fiscal year should be close to $20 million – a more precise estimate than his initial projection of $18 million to $25 million.

Memphis Mayor Jim Strickland’s plan for the city’s ramp-up over five fiscal years starting this July is $3 million from city reserves as seed money over the five years, along with revenue from a penny of the existing city property tax rate combined with the revenue generated by the city property tax increase produced when tax abatements for economic development projects expire. The city estimates the tax increment from the payments-in-lieu-of-taxes, or PILOT, roll-off should be producing $6 million annually by fiscal 2023.

Luttrell did not include a new Regional One Health Center in the county capital budget proposal. He said Regional One CEO Dr. Reginald Coopwood didn’t make the ask for the upcoming fiscal year although Luttrell expected he might.

“It’s definitely on the horizon,” Luttrell said, describing what amounts to a new public hospital to replace what is a patchwork of some buildings as part of The Regional Medical Center with the remnants of former public health hospitals and medical institutions in the city’s medical district as “the biggest capital undertaking this county has ever undertaken.”

“FedExForum pales in comparison,” Luttrell said of the $250 million arena. “It should be taken slowly and should be thorough.”

Kennedy said infrastructure and construction projects are likely to be at or near the top of the list for the new administration and commission.

“We’ve got plenty of challenges,” he told commissioners. “And our debt reduction plan which was predicated on a $75 million CIP (capital improvement program) is just not likely to be feasible going forward. We need more money.”

The county’s debt is now below $900 million after being at $1.8 billion in 2007. The debt reduction plan began during the administration of county mayor A C Wharton and continued when Luttrell was elected mayor in 2010.

Since then, the county and city governments each have tried other measures to avoid debt, including saving money to amass a “pay as you go” fund to pay cash for smaller capital projects instead of using bonds to finance them.

Luttrell is wrapping up his second term as mayor and is term-limited. The race to succeed him is between Democratic nominee Lee Harris and Republican nominee David Lenoir.

The commission will have at least eight new members on the 13-member body once the votes are

counted in the August county general elections.