I have spent some time going through the 2010 city of Memphis adopted operating budget. The 2011 budget process will begin soon, and I have some thoughts on this:
Looking back on past documents, I found that the funded staffing level for fiscal year 2005 was 5,545 employees. The population of Memphis in 2005 was 671,929. In 2009, the population had grown to 674,028, a growth rate of .003 percent. However, the city staffing level had grown to 6,123, a growth of 10.4 percent.
I suggest that the City Council tell Mayor A C Wharton to cut the staffing level by a minimum of 7 percent, for a savings of $30 million. I propose cutting staffing everywhere but the police department, which is up by 145 positions since 2005.
I question the sewer fund summary. Why did the payment on debt service jump from $6.4 million in 2008 to $15.3 million in 2010?
Park Services should be examined for savings by turning it back over to a civilian board, as it was before the City Council took it over. This takeover in 2000 by the council resulted in spending $4 million on the Whitehaven golf course, at the insistence of TaJuan Stout Mitchell, and $1.5 million for the Links at Riverside at the insistence of Edmund Ford. Hardly anyone plays golf on these courses, and they continue to lose money.
The contract with the Riverfront Development Corporation ($2.2 million) should be examined as to its services and value for the downtown parks it manages. An immediate study should be made of each city golf course and tennis facility to determine operating cost and revenue (this data is available annually for each facility). For instance, my recollection is that the Whitehaven (indoor) tennis center always has been a loser, because it gets almost no use. A decision should be made on each golf course and tennis center.
Other Post Employment Benefits (OPEB) should be examined, as well as the health insurance for current employees. We are spending $93 million on these benefits, and there have been reports that the retirees are not paying the full 30 percent that they are supposed to pay on the premiums.
The unfunded liability for OPEB for Memphis is $934 million, up $77 million in one year. We have promised to put up a laughable $5 million in 2010 to start to fund this unsustainable promise. We need to cut the funding ratio (70 percent paid by the city versus 30 percent paid by retirees) by at least 5 percent a year so that retirees have time to prepare for the inevitable non-funding of this empty political promise.
Employees' benefits should be cut. There are few private-sector firms that offer 15-year employees two-and-a-half sick days per month (six weeks a year!), five weeks vacation (after 25 years), plus 11 holidays and other bonus days. This adds up to nearly 12 weeks off a year, which means that the city must hire additional personnel to get the work done.
Vehicle inspections cost $1.6 million and should be restricted to emission testing only and could be contracted out.
The Community Enhancement Division, especially grounds maintenance and City Beautiful, should be examined for performance and necessity. Grounds maintenance and City Beautiful work also could be contracted out.
The $700,000 for urban art ($100,000 for each of the seven council districts) should be dropped. This was left over from a canceled capital improvement plan project.
A public/private pension task study group for the city and MLGW, similar to the ongoing one for the county, should be instituted to consider a revised future pension plan for new and non-vested employees that is sustainable and affordable. Due to financial market conditions, the present plan may not be affordable in the future.
Local financial conditions will not allow the City Council to just trim around the edges of what the administration presents. We must attack the real problems, a few of which are mentioned here.