City Council turns to public to help solve health care cuts, pension fund debate

MEMPHIS, Tenn. — Inside Memphis City Hall, council members have taken their share of political bumps and bruises during the past couple of weeks.

Councilman Lee Harris said the complaints haven’t gone unnoticed.

“The council has a bad image. It’s nothing we can do about now. All we can do is try to do the right thing,” Harris said.

The bad image Harris referred to came about after the city council voted recently to cut health care subsidies for current and retired city employees and send that money to the city’s troubled pension fund. It led to protests and rallies outside of city hall.

“We did a whole bunch of things that will negatively impact a whole bunch of families out there, folks who aren’t well-to-do families, folks who are working hard and folks who thought they had a pretty stable career” Harris said.

After the public outcry, the council now wants to hear from the public before its meetings on how it could have found the pension money without cutting health care benefits.

So, is this a political about-face or an attempt at doing the right thing? Jim Strickland is Memphis City Council Chairman.

“It’s about being open-minded. No one is back tracking on what we did. But if there’s a better way, we’d be stupid not to take the better way. So, let’s open it up and maybe someone will come up with a better way to find $50 million dollars (pension fund),” Strickland said.

But some say the council is relying on the public to do its job. Otis Sanford is WREG’s political commentator.

“We elected the mayor and city council to lead this city and now they’re turning around and asking the public to give us some suggestions about where to cut and try to raise $40 or $50 million? I don’t think that’s realistic. This is putting the cart before the horse. They should have done this months ago” Sanford said.

But the council contends it did.

“We had three months of budget hearings and no one came up with any alternatives other than to save $23 million dollars by cutting the retirees’ health care,” Strickland said.

Still, many on the council say no matter how they voted on the cuts, they now agree an alternative solution is needed and they’re hoping it comes from the public.

“I did what I thought was in the best interest of the entire city of Memphis. but I am open-minded to say there might be a better way and let’s try to work together to find it,” Strickland said.

“I’m very hopeful and very glad some council members have decided that we’re going to have some hearings to discuss alternatives because I feel there are some alternatives out there,” Harris said.

Starting with the council’s personnel committee meeting on July 15th, and at each meeting of that committee through the end of the year, council members will listen to the public’s recommendations.

46 comments

  • joe

    Raise taxes and pay these people what was promised. God bless and thank you to the ones who risk there lives to protect us…

  • Christine

    I do not want my taxes raised. Every time the city has financial shortfalls they want to raise our property taxes.

    • Gonebabygone

      Exactly. They have tapped that route out and made the city less desirable to new business due to high property taxes. That’s why they hand out PILOTs like candy. That’s also why there are new businesses locating in surrounding counties instead of here.

      It may be time to take a hard look at staffing across the board. What about trimming social programs? Has the city done a better job on delinquent property tax collection? Linebarger wasn’t cutting it and the county offered to help, bit I don’t know if they took them up on it. This might be a place to start before raising taxes yet again to cover ongoing wasteful spending.

  • Get Informed

    What about a 2 cent hotel tax like Southaven and Hernando did and St. Louis did it too. What about using some reserves, not enough to affect the bond rating. What about using money from some pilots that are expiring this year, what about selling the golf courses that don’t make money anyway, what about selling the car inspection stations, what about using the red light camera 1.5 million generated and get gps for city cars at a later date, what about a 1 cent gas tax for public safety and fixing roads or a 1/2 cent local sales tax for public safety and road repair ( can you tell I want the roads repaired?) What about not spending money like wildfire on all these crazy projects that always seemingly costing more money to build and being a drag on our funds when they are completed (The pyramid, the Beale St. Landing (I heard part of it was recently underwater and there are no gas lines for a restraunt there). By not spending all that capital money we get to save a 80k in the general fund supposedly per million not spent in the capital budget. They have a 750k dollar surplus already they discussed at the council meeting and they miraculously “Found” 2 million to do a safety net for health benefits for a “Safety Net” the day after the vote. One council person said they didnt know about that money or it would have possibly affected their vote. There are too many options not to look at some of them before breaking it off in elderly and disabled people who had the rug pulled out from under them. Please fix this city council. A little from here and a little from there will fix this budget thing.

  • imjustsaying

    I don’t want my property taxes raised. If there is a tax increase it needs to be an increase for everyone , not just the property taxes.

    • Get Informed

      I agree, spread the pain as thin as possible. That is why a 3/4 pct local sales tax would do and nobody would ever notice and or the same with a 1 cent gas tax. But a big part is spending on these pet projects and not collecting ANY taxes from billion dollar companies whose stocks are at all time highs

  • David

    Get Informed is on the right track. Very smart move. Also I want to add is to fire the whole city counsel, the mayor, Mr. Little and the rest. Change their pay to match other places. Elect a fresh new bunch. Then sell the ball park to MLB, get the money back they paid a developer to clean his mess up ($15 mil). If a bid is elected but they come up and said they need more money, tough! This would start the process.

  • Deb

    Don’t use the $66 million to revamp the Raleigh Speings Mall. Isn’t this privately owned? Why would the city invest tax payer money into a privately owned business? If the city wants to give money away why not give me some, I sure could use it!

    • David

      Now we are thinking. Very smart thinking Deb. Anyone else has a good idea like Deb. This isn’t sarcasm, this is real.

    • Hjc

      Deb- I couldn’t agree more. $66 million towards a complete and catastrophic failure is criminal.

  • Mickey

    what a joke!!! these idiots now want the “public” to fix their massive mistakes and mismanagement of hundreds of millions of dollars? How about investigate each council member to see if any of their private businesses profited from city dollars then, like other cities, put them in JAIL!!!! Theres a novel idea….holding people accountable!

  • Joe

    Private sector employees have been going through these changes for 20 years .. Municipalities can no longer afford to fund these lucrative entitlements .. Traditional retirements, benefits, etc .. .

    • Christina

      The pension the city has is unlike that of any other state, or private sector pension for that matter. They City would pay more into SS than what they pay into pension now if they were to change it over. Also, the City employees MUST pay more than their employer. They do NOT get SS, even if they paid into it while working in private sector jobs prior to becoming a city employee. And their spouses only get 1/3 of the SS they paid into. Stop comparing apples to oranges, please.

    • Get Informed

      The public sector does not make salaries comparable to the private sector, they are much lower and advancement, particularly in the police dept is almost non existent. They have scores of officers with 15 years on that have never been promoted and have been at that same paygrade all this time. Benefits are the only thing that help equal that out. These “Lucrative benefits” in Memphis are – They used to pay 70 pct of your cost of insurance at retirement, you pay 30Pct. Employees pay into the pension, yes , they do, just like a 401k at 7.5 to 8.5% of their pay depending on hire date, the city only paid (excuse me, was supposed to pay but didnt) 6.2%. That is less than the 8% they are saying they will pay if it was switched to a 401k. The councils on pension expert said 8 out of 10 of their clients have opted to keep pension and tweak it rather than switch. He also advised that Atlanta switched from a pension to a 401k in 1998 and four years later switched back to a pension because they could not find anyone who would take a police job there. This is all per the city councils hired expert Segal. These are not lucrative benefits, they are reasonable to make up for the lack of pay, and by the way other than the mayors appointees the city workers havent had a cost of living raise in 6 years. I could go on but I won’t. Get informed.

  • irish49ersfan

    If you all řeally want this state to flourish you should legalize medical marijunia. It helped Colorado so much that they know longer have to pay taxes on there homes.

  • Christina

    What happened to the $50+ mil year over year savings from relinquishing the schools? What happened to the $20+ year over year from MPD budget cuts? What happened to all the money still collected from the wheel tax when you no longer have to pay for inspection stations and employees to man them… You know, the wheel tax that was to support the schools you no longer manage. Where’s the money AC?

    • therealmpd

      The $57 million was a debt they have avoided paying and is the result of a lawsuit that is still in the appeals process im sure. How about this food for thought… the Mayor and council reduced pay by 4.6 percent in order to cover that debt. It was returned after the city schools dissolved their charter. Now there are lawsuits from developers not being payed for Beale Street landing. Anyone want to bet that figure is just above $23 million. Not a conspiracy theory folks. If our news outlets could do investigative journalism we wouldn’t have these problems. Find a developer for that waste of tax dollars on the river and I will guarantee you will find a lawsuit.

    • IwishUwould

      What happened to the 57million the courts ordered the city to pay the schools, that AC got on TV and said was in the Bank drawing interest… Then they turned around and gave up the charter to keep from paying it.. Where is the money the City employee’s paid into the pension and do they get it back. Also why isn’t anyone questioning the City’s CFO Gorge Little about what happened to the money. In my opinion there need’s to be a Federal investigation at the Federal level.. Someone has been steeling seems to me.

  • Christina

    It would also be nice if our City would stop taking fiscal advice from the man who bankrupted Pennicle after AC gave away the farm to get them here. Look up Pennicle and then look at who runs the Memphis Chamber of Commerce. The one who is pushing for our benefits to be stripped from those who EARNED them.

  • Heather Pfeil

    As I recall we have been out there speaking until we were blue in the face. You can’t make them listen. They are to busy tweeting, face booking, and playing games while the citizens speak.

  • The Bob

    Um, I think the answer to this problem is simple enough for even the City Council to understand….. CASINO. You’ll raise both the $50mil shortfall and the $50mil the City owes former MCS in a year or so. Just think of all the money that the City loses to Tunica every day!
    But if the crusaders and bible-thumpers cry “heathens”, you could just add a tax onto vehicle registrations/tag renewals.
    Or put a .10c fee on Grizzlies/Redbirds/
    Tigers tix (FB & BB).
    Or a small “Beale St. Booze Tax” on all beer and liquor sold on Beale, the Forum, and Musicfest. It’s already ridiculously expensive so what’s the harm?
    Or a downtown parking tax cuz when you’re paying $12-20 to park, what’s another dollar?

  • Who needs money

    I say raise the property taxes from $4.38 to $8.76. On a house appraised at $100k that will raise your property taxes about $90 a month. If your house is appraised at over $100k in the Memphis city limits you need to call the appraisers office and appeal because there is nothing in this city worth more than $100k. With this windfall of new tax money the politicians could spread the wealth around like never before. It would bring Karl Marx up from the grave to see his dream fulfilled. We could have a Sears, FedEx Forum, Pyramid on every corner. Just a measly $90 a month for all homeowners and this could be Utopia. Everyone would have a city job, Heck why do we even have taxes, just do your job, the politburo will determine what you are worth and mail you a check. Everyone is assigned a home, given their food chits, and ride those smoky buses to their workplace.
    Free doctors, no need for lawyers, and criminals get a bullet to the back of the head. See that even fixed the jail problem. We would be an example for the rest of the world. Take the best of Russian/China/N Korea and European socialism and merge them all together and we will be the shining light of the world on the biggest dump
    Otherwise give them back their healthcare benefits, file bankruptcy, and then pay the pensions at 10 cents on the dollar.

    • What is money?

      What is money? Where does it come from? How did our Federal Government print and spend $17.5 TRLLION friggin dollars they don’t have? They just got a bank to print it out of thin air is how they got it. I say if it is good enough for our Federal Gov’t to print money out of thin air, the the city of Memphis should be able to do the same. Just print a few BILLION dollars, near term problem solved, and leave it our children and grandchildren to figure out how to pay it back. Good grief already, it is about today and our problems, who cares about future generations, just print the money already. Oh yeah our Constitution says banks, states, and cities cant print money but the Feds do it anyway so no problem here. If called into a courtroom for printing this money then use the defense the private banks do it, so why cant we? That would be an interesting case to hear.

  • Teresa

    You purchase the red birds stadium, then the Raleigh Springs Mall? Maybe you should quit spending, an honor & pay the debt you owe!!!!!

    • Get Informed

      They are doing the equivalent to buying porches and not paying the house note or the light bill.

  • scott guidry

    Immediate budget solutions. I presented the following list to Councilman Steve Strickland upon his request in 2011 or 2012. They outline my opinions on how we might lessen the strain of current budget woes primarily for the next 12 months; yet some go beyond. I thought I might include in this letter as some could be applied in other areas of city improvements.
    1. Freeze hiring for 1 year
    2. Freeze on PILOTS for 1 year.
    3. Freeze expenditures for overton square garage project for 1 year.
    4. Freeze on major capital projects for 1 year.
    5. Suspend Bass Pro expenditures indefinitely
    6. Freeze yearly step-raises for all staff
    7. Freeze seminars and travel across the board for 1 year.
    8. Freeze on police and fire vehicle/equipment purchases for 1 year.
    9. Cut redundant positions from the 7120 regular staff members. Memphis has fewer residents and declined services over the past 10+ years yet our government has continued to grow.
    10. Continue the police pressure on traffic violations – then make sure people pay the fines.
    11. Patrol speeding at the gateways to the city along major highways (I-55 and I-40) much like Piperton.
    12. Enforce current code enforcement and blight laws – then make sure people pay new and outstanding fines.
    13. Close the vehicle inspection stations and allow police to ticket visually smoking cars, cracked windshield, etc.
    14. Consider outsourcing 90% of IT department similar to the private sector.
    15. Fine residents and commercial landscapers for blowing debris in the city sewer system.
    16. Privatize or increase spending for MATA. Improve the system.
    17. Sell golf courses, animal shelter, and 50% of public parks.
    18. Bid out trash collection and lawn care along roads and highways.
    19. Eliminate mid-management positions or retire upper and promote middle thereby shortening the hierarchical tiers
    20. Eliminate take-home city vehicles except police cruisers
    21. Reduce salaries of remaining upper management, including the council members of 5-10% (mine was reduced by 20% but I still have a job).
    22. Include cuts for MLGW
    23. Sell vacant government-owned properties at auction.
    24. Take possession of privately-owned properties for payment in lieu of taxes/fines and sell at auction.
    25. Hold auction for police seized property, out of service vehicles, or city-owned materials currently in storage, etc.
    26. Install new parking meters that accept credit cards and add metermaid to police services
    27. Enforce property tax payment. Provide public service work program for those not able to pay. Work could include cleaning up streets in their community, tutoring school children, volunteering at the community center as an assistant coach, neighborhood watch leader, etc. The point is to get people involved in their own community. We need more people giving back. Can the city offer incentives. Some communities feel abandoned by their city. How can we convince them to forge on and take control instead of holding back and giving up?
    28. Provide a tax credit for residents who live and work within the city limits. The idea would encourage more to stay, travel fewer miles, and be credited for living in Memphis instead of being penalized by higher taxes.
    29. Provide 5-10% tax cuts for new small businesses for 1 year, which provides a new tax base in year 2 and beyond.
    30. Reform financial assistance to lower income and penalized only those abusing the system. Theft is theft.
    31. Consolidate more services – you decide which ones.
    32. Increase tax on alcohol & tobacco
    33. Increase vehicle registration fee by 5-$10
    34. Eliminate pensions for new hires. (I don’t have a pension nor does most private sector employees)
    35. Overhaul the judicial system to streamline the process to maximize efficiency.
    36. Eliminate employee cellphones
    37. Hire a corporate entity (fedex or an outside source) to audit the city’s finances and potential inefficiencies.
    38. Provide a financial plan in future budgets to install new, more efficient mechanical systems in the city’s largest buildings first. This will decrease energy costs over the long term and have an eventual pay-off.
    39. Simplify business permitting process
    40. Provide a minimal tax credit for each employee a business plans to hire annually instead of a tax credit for their planned hiring.

    • Buy a gun

      Who needs an $80,000 dollar a year employee (pensions, healthcare included) to protect you when a $500 Smith and Wesson and a 12 gauge shotgun is all you need. A cop is reactive, they cannot do anything until a crime has been committed. A weapon is proactive, it keeps the crime from even being committed.

      • Its Time

        Where did you get $80,000 from? more like $53, 000 with skyrocketing healthcare and so much additional bs that come from officers checks.

    • Get Informed

      Many good points. Dont agree with the pension though. Police and fire are not comparable to private jobs in pay or risk and besides the 401k per the councils own expert would cost more than the pension. Atlanta police dept in 1998 switched from a pension to a 401k and four years later switched back because of lack of interest in the job. Also the city is only pays or was supposed to pay 6.2 % into the pension, they haven’t done that of course, but it was cheaper for them than paying social security, thats right police and fire dont get social security, which by the way is basically a federal defined benefit program or wait for it……. basically a pension. So far their own expert has from every meeting ive watched, advised to keep the pension but run it correctly and tweak it. It is currently 83% funded per Segal by their own numbers. 80% is considered the national standard for “Healthy” and that is with only the employees making the full payments and the city making some. Austin Tx , who is actively recruiting here, has a far superior pension program as does Orlando and dozens of other cities. You do want decent police recruits right? They do check people’s homes with open doors, we need to be able to hire good trustworthy people who when the stuff hits the fan they will put themselves in harms way to save your child or your dad or your mom.

    • John G

      I agree with you on all it.Instead of citizens going to their meeting why are they not having meeting in our communities
      instead because it is obvious they don’t care about your opinion it is theirs that matters.

  • poolgirl2

    How about providing us with a copy of the budget, including individual salaries, and give-aways? Income and expenses? How can we make realistic suggestions on vague, unquantifiable ideas?

    • Alison

      Excellent point, Poolgirl2. While I am certain I run my household budget far better than the Clowncil runs theirs, there is no way we can make honest, sustainable, realistic proposals because we don’t have all those things you mentioned and they have to know that. It is what makes me EVEN MORE mad. These dummies can’t just get away with saying, “Duh…. This is hard. We can’t do it. Do it for us, average ordinary citizens!” Gimmie A BREAK!

  • carolyn kelly

    Money is still being collected for a wheel tax that was supposed to air condition the schools that are now no more. We do not get inspected any more so where is all that money gone? there are a great many cars in this city that money should easily fund this problem.

    • Get Informed

      Good point. It would at least help. Fund fire and police and for crying out loud fix the roads.

  • Bill Zebub

    End Minority Requirements and end the Pilots, problem solved, here are a few PILOTS. The list is much bigger than what you see here.
    .AB Mauri Fleischmann’s (ABMF)
    Accredo Health
    AEL (American Esoteric Laboratories)
    Americraft Carton, INC
    Blues City Brewery LLC
    Cargill incorporation
    Cascades Tissue Group TN INC
    Electrolux Home Products, Inc.
    Evergreen Packaging, Inc.
    FDX Corporation
    Fed Express Flight Simulator Project
    Federal Express
    Federal Express Global Headquarters
    FedEx Supply Chain Services
    Flextronics Logistics USA Inc
    Ford Motor Company
    Ford Motor Company
    Franklin Sports
    General Motors Services
    Impact Innovations
    Intermodal Cartage
    International Paper
    International Sourcing Co
    Jabil Circuit
    Jabil Global Services
    Johnson & Johnson
    Johnson & Johnson Healthcare Systems, Inc
    Jordan Anodizing Expansion
    KTG
    Levenger
    Liquid Container
    Lucite International
    MC Ionic Solutions US, Inc
    “McKesson Corporation
    amendment to 2009 PILOT”
    Medtronic Sofamor Danek
    Memphis Specialized Operation
    Mimeo.com, Inc
    Mitsubishi Electric Power Products, Inc
    Monogram Food Solutions, LLC
    New Breed Logistics Inc
    Nike (Amendment to 2003 PILOT)
    Nike Tennessee
    Nucor Steel
    Nuvasive INC
    Onyx Medical Corporation
    Owen Corning
    Pacific Paper
    PENN Specialty
    Pennakem
    Pfizer Inc GFSS
    PharMedium Healthcare Corporation
    PMC Biogenix Inc
    Pratt Industries
    Praxair Inc
    Riviana Foods
    Saint Francis Hospital
    Service Masters
    SFI of TENNESSEE, LLC
    Smith & Nephew
    Southern Steel Company
    Technicolor
    Trane U.S Inc
    US Food service Inc
    Valero Refining Company

  • Joe

    If Mayor Wharton would’ve at least given up a year’s salary and found several top city officials to take cuts in their’s, granted it wouldn’t be enough to fix the budget and not have to eliminate retiree benefits but it would have done him wonders from a PR standpoint.

  • Alison

    Are you kidding me!? These people are elected to figure this stuff out. For them to say, “Oops, our bad, public. What do you think is a good remedy?” now that we’re angry irks me even more than the problem itself. It’s kinda like Mike Williams with the MPA said, “I don’t ask Mayor Wharton for help with my MPA budget…” Hunker down, pull some all-nighters, get some consultants if you need to, and get the stupid job DONE. JESUS!

  • XEROX

    This in reference to the council. Can’t do the job? QUIT! You got us in this mess but as usual someone else has to clean up the mess, the taxpayer. You are a joke.

    All the suggestions already mentioned have been discussed in posts for months and I guarantee the politicians read them constantly. They already know what the public thinks and wants. They just don’t have the backbone to do it.

    Really want to help? Call Haslam and give up the city charter similar to when you gave up the school charter while turning your back on the kids.

    At least if you’re gone all the salaries could be applied to the problem, although would be a drop in the bucket.

    And if the state were to seize all the books several of you may be in jail. Any money you make there should be applied to this mess.

    What a joke of a city and leadership.

  • canadianwhiskeygirl

    city council isnt really going to listen to “ordinary” citizens of memphis. its more like “your opinion,please” but doing what they damned well please anyway. name all kinds of things that even they know would work, but if it gets in their cookie jar even a tiny bit, theyr just laughing. its THEIR cookie jar and noone else is going to be allowed to touch that money.

  • Joe

    C’mon .. What do you expect from a city that can’t air condition the schools or keep a trolley running..

  • ForReal

    To those suggesting that Pilots should be canceled for businesses like FedEx, just remember this: without FedEx, Memphis will be dried-up like Detroit. We won’t have to worry about police pensions and insurance. Police layoffs will be the only worry.

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