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[City Beat] :: Business As Usual

Herenton, MLGW "adjustments," money woes, and the shark.

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Remember when the only time you thought about Memphis Light, Gas and Water was when you paid your bill or your power went out?

Not any more. Ever since last summer's windstorm, MLGW has been at the center of one controversy after another, and it doesn't look like that's going to change soon.

Newly installed MLGW president Joseph Lee is shaking things up. New details of management perks -- the sort that drive angry citizens crazy -- have come to light. Mayor Willie Herenton says the windstorm is partly to blame for an unexpected hit to the city's reserve fund. City Council members, as usual, are skeptical. Rumors that MLGW might be sold have resurfaced -- and are once again being shot down. And all of this is taking place against a backdrop of federal investigators, like the giant shark in Jaws, looking into various aspects of city and county government.

If you believe Herenton, who brought it up at Lee's swearing-in ceremony, one of those investigations is aimed at the mayor himself and the parceling out of business in the MLGW bond deal with TVA. Sources say former MLGW president Herman Morris will testify later this year before a grand jury. U.S. Attorney Terrell Harris declined comment. Morris did not return a call seeking comment.

Less than a month after presiding over his first board meeting, Lee wasted no time eliminating three senior staff positions.

"These measures will result in substantial savings in salaries and streamline the management structure," Lee said.

The savings, however, are questionable. One senior vice president, Larry Thompson, is eligible for a $157,000 annual pension. Another, Curtis Dillihunt, retired last week. And a third, John McCullough, is basically being given a new title and doing what he did before as finance expert.

Lee and new MLGW board members also reversed a severance package that was put in place under Morris, but MLGW bigwigs still get better salaries and benefits than top city or county employees. Unlike the 2,600 rank-and-file MLGW employees who contribute 8 percent of their salary to the pension fund, 10 senior managers have their contributions made for them by ratepayers. MLGW spokesman Mark Heuberger confirmed that senior managers also get a $12,800 annual car allowance, which is added to their salary and figured into pension calculations. On top of that, they get six weeks annual vacation starting their first year in senior management.

News reports raised the possibility of a sale of MLGW to a private utility, but city councilman Rickey Peete thinks that is highly unlikely. "A sale is not going to happen," he said. "The council would absolutely not let it happen."

In a letter to MLGW employees, Lee said "additional adjustments will be made in coming months." Peete said Lee told him five or six VP positions would be cut but that he has also heard the total could go as high as 20 to 30 positions. Lee could not be reached.

Herenton, as always, is inscrutable one day and making news the next. In a guest column in The Commercial Appeal, he listed several things that have loaded up the budget and are dragging down the reserve fund, including the cost of operations and debt service on FedExForum, The Pyramid, and Mud Island. The inclusion of Mud Island in the list (at a deficit of $2 million a year even though it is closed several months) suggests some of it might be expendable. But Benny Lendermon, head of the Riverfront Development Corporation, which operates the park, said the actual deficit is closer to $1.5 million, which is in line with Tom Lee Park and Overton Park.

"No one has talked to us" about selling it, Lendermon said.

Grim as it was, Herenton's budget assessment left out one major item: the cost of police overtime to provide security for FedExForum during the anticipated 140 annual events. Peete, head of the Beale Street Merchants Association, said that could cost $3 million a year and "would probably come out of the city" even though Beale Street and Peabody Place pay for their own private security. The arena and surrounding improvements were paid for in part with revenues that would otherwise have gone to MLGW and the city for other uses.

Adding a final bizarre note to all of this, police and sheriff's deputies chose last week to demonstrate their commitment to public safety and wise use of taxpayer dollars by making a series of extremely well-publicized raids on bars and grocery stores conducting illegal gambling with video poker machines and -- gasp! -- a raffle. Tunica must love it. And if you turn on your radio, chances are you will hear an Elvis imitator singing a "lotto lotto" ditty on behalf of the Tennessee Lottery. Only in Memphis. •

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