Wharton: We kicked the can down the road for too long

MEMPHIS, Tenn. — Memphis Mayor A C Wharton made it clear on Live at 9 Wednesday morning he believes city leaders ‘kicked the can down the road’ when it came to controlling expenses.

Wharton said he understands why employees are unhappy with a 24% increase in healthcare costs and for some retirees, a loss of their subsidy for healthcare.

The money saved by the city, according to Wharton, will go toward properly funding the city pension program.

As of July 1, the State of Tennessee requires local governments contribute 100% of the cost, determined by outside agencies, needed to keep their pension funded.

Governments have six years to get to that 100% funding mark. Unlike Memphis, some governments are members of the Tennessee Consolidated Retirement System which has long 100% pension funding.

The Segal Company, a human resources consulting firm, found the city pension is underfunded by $467 million.

That contradicts a report commissioned by the firefighters union which put the number at $301 million and a report done by PricewaterhouseCoopers which put it at $682 million.

When asked how Memphis got to a point where the pension was not funded properly, Wharton listed a series of events, “As long as the stock market was churning and burning, it was putting in the required amount. Almost being over funded. But when the recession hit, the bottom fell out. Property appraisals were down, you had the Supreme Court saying you got to keep paying the schools. All of those things were not contemplated.”

Wharton said city leaders met with unions and the heads of police and fire to see where saving could be found. MPD And MFD received extra funding for new recruit classes and cuts were proposed, but Wharton said those cuts would have had a negative affect on the city.

Funding the pension, Wharton said, was his priority, “There are alternatives to healthcare. There are no alternatives when it comes to a pension plan. If the pension gets in trouble you can’t go to Walmart. There are no pension exchanges out there. There are health exchanges. We’re going to make sure everybody has coverage.”

When asked whether he and the council could make sacrifices, Wharton’s answer instead focused on what employees have given up.

“The city employees have contributed to the tune of $32 million dollars to keep us at the point where we are now. The sacrifice has been made,” said Wharton.

Some city employees, and both the fire and police unions, say they fully know they have made concessions and they cannot make more.

Wharton did make it clear he expects all police and fire employees to return to work immediately, “I want them back. If they cannot come back there will have to be consequences. We want them back.”

As of noon of Wednesday, 546 officers were out sick, compared to 557 Tuesday. There were a reported 65 sick calls for fire employees, which is about double the normal number.

22 comments

  • SC Stukenborg

    The only reason he is focused on the pension is because he has NO option – not because he cares. Once again irresponsible politicians “kicking the can down the road” hurts innocent citizens. Is this excuse supposed to be acceptable?

    • Don

      Wharton did make it clear he expects all police and fire employees to return to work immediately, “I want them back. If they cannot come back there will have to be consequences. ( Another Threat ) We want them back.”
      AC, You should have thought about what was going on long before now.

      You can lead the horses to water, but you can’t make them drink.
      If Toney wasn’t offered a cushey retirement package by the mayor, he would have the blue Flu himself.
      Keep on digging the hole you are digging until it falls in and take you with it.
      By the way you have to ask before you get any help by the State of TN. The mayor has to ask, Toney Armstrong can’t ask for you.
      None of the out of county wants to help Memphis, unless there is a threat to the Shelby County Deputy County officers who may be in harms way.
      The counties around Memphis is lead by professionals.

    • King Willie

      Mu haa haa ha! You police and fire fighter chumps thought I was the best and the whole time I wasn’t funding your retirement! Thanks for the vote – now blame AC! Chumps

  • Wanda

    Wonder how long that $66 million they’re spending on Raleigh Springs Mall could keep the health care costs down?

    • Mike

      Funny about the mouse. OK. Here’s your alternatives. Broken record time:
      Don’t buy 50 Million dollar boat docks.
      Don’t buy 28 million dollar parking garages on Overton square.
      Don’t give 200 million to bass pro and Electrolux. (Private venture )
      Don’t give 35 million dollars to sears crosstown building. (Private venture )
      Don’t give 66 million dollars to Raleigh springs mall. (Private venture )
      Don’t buy 26 million dollar baseball parks. (Red bird stadium)
      Don’t build 250 million dollar basketball arenas (already had a perfectly good pyramid and mid south coliseum )
      Stop wasting 10’s of millions of dollars a year on an empty trolley system riding up and down the tracks.
      SHALL I GO ON???
      Stop giving multi million dollar no bid city contracts to your buddies/cronies.
      Pave the ragged third world streets in this city and then raise my taxes if you must.

      • Mike

        Forgot about the millions to chisca hotel (private venture)
        Millions to civil rights museum ( private venture)
        Millions to Graceland area (most Elvis fans are deceased or moved on to other entertainers)
        Millions of dollars for stupid bike lanes that obstruct vehicle traffic and only a handful of idiots use anyway (use the sidewalks, safer for the bicycle rider and motorists)

      • langor1

        While fiscal mismanagement isn’t exclusive to Memphis, it is almost an art here. I agree with your list and let’s not forget the Pinnacle airlines debacle.

      • Hard Truths

        Willie and his cronies raped Memphis for 30 years. THERE, that’s the explanation.

        I have no good solution to offer.

        Don’t elect looters like King Wilile EVER AGAIN. God help us.

  • Alison

    The ONLY reason they got the 4.6 back was because they SUED YOU AND WON! The court declared what you tried to pull illegal. …and he effectively dodged the question about WHY the pension hasn’t been funded every year. The stock market! Gimmie a break!

  • Hard Truths

    It is not “we” or Mayor Wharton who “kicked the can down the road for too long”.

    It was King Willie Herenton and his merry band of looters — and the white developers who bribed and enabled them.

    King Willie was really good at “bread and circuses”, not so good at being an adult, a leader, and a mayor.

    I don’t understand why AC keeps taking the blame for King Willie’s wretched behavior as mayor. Oh, and Willie’s coterie of kleptocrats in juicy jobs and on the City Council.

  • An Officer

    My Question is Why hasnt there been an outreach to Governor Haslam? Why is there no initiative to make the budget right by state law knowing that there has been years of neglect coming from Memphis? There is no need for the immediate burden on employees who have sacrificed so much, the timeline is just to much for us. Call in the state comptrollers office and get it done.

    Politics aside there needs to be an amendment to the state law making all of this right so long as it heads Memphis in a satisfactory path with hard and concrete steps to solve the years of fiscal irresponsibility but not at the expense of the police and fire personnel who risk their lives every day.

    Channel 3 you seem to be more against us more and more, just an observation on your reporters .

  • IwishUwould

    No straight answer to a direct question as usaul. Can you not see this is a media driven bull by the Admin. to get away from the key facts…. where is the money’s that the City employee’s paid into the pension fund. Remember the city is the one’s who didn’t pay their part. Now the Admin. wants to push the blame. AC is a joke of a Mayor.. Don’t foget this is the same guy who got on TV and said that the city had the money in the Banks drawing interest to pay the school system if the courts found that the city owes. Onces the told the city to pay up, what happened he had them to give up the school charter to keep from paying the money. WHY? Because him and the rest CFO, CAO his whole Admin. spent the money and they didn’t have it. Ask this to MR. A.C (A Crook) where is the $57 million that he said was in the bank drawing interest. I bet you want get a straight answer.

  • lets impeach the mayor

    SO BASICALLY, WHARTON WANTS THE EMPLOYEES TO PAY 100% INTO THE PENSION FUND. IF THEY HAVE ALREADY CONTRIBUTED AND HE TAKES THEIR BENEFITS TO PAY THE REST THAN THE EMPLOYEES HAVE PAID 100%.

  • Rick

    Ok Mr. Mayor . Read these comments people are making here. Just plain common sense. You pay your bills first. A define Pension fund has to be fully funded every year. This has always been in place. It is not freaking new. You don’t go and put millions into projects before meeting your obligations. Here is a clue. That’s how you do it every year. You, the council and previous administration created this with your poor management skills. You have been cheating them by not being a good custodian of the pension system and now you are cheating them out of their medical benefits. You should be removed from office. I hope these people remember this next year when election time is here. I also wish they would tie yours and the councils pension and medical to the same as the employees. Then maybe the politicians will make better decisions.

  • 1midtownmike

    Face the music…..this is the result of so called local leaders who were incompetent to begin with. Swallow your pride and politely ask the state to come in and take over. There’s no other way other than filing bankruptcy and we know where that leads.

    Don’t believe me? How many MPD patrol cars did you see on your way to work this morning?

  • takenobull

    What is this “WE” stuff??????
    The taxpayer is going to work while folks who cannot control their own personal lives as witnessed often in the news spends millions on ball parks that only the rich can afford to go to.

  • Thomas H. Evans

    Of everything everyone has said on here about Willie Herenton and A C Wharton, the sad thing is that “WE” continue to put them in office regardless of their management style. And by the way, Willie Herenton wasn’t in office 30 years. It matters not who created the situation, it only matters that the person in office now has the intelligence to address the problem as a professional, not as a cry baby, and talking about “kicking some can down the road,” you (A C) should have had some idea of what he was getting into, but it seems all he and his cronies, to include the City Council, is find a way to spend money on things that have produced zero ROI. All I hear in Memphis is what happened to us in the past; I hear nothing about what we are actually doing to address the present and future. If you simply view the list that Mike has posted on here, please tell me that none of this played a part in where we are today in our finances. Who is making these decision “NOW?” And to think we have a Human Resource Director who is not even aware of the Call Out Policy for the Police or Fire Departments; and she is paid how much per year. Next year I will see just how tired some of us are when we have the opportunity to replace some of these people.

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