It’s all about the power
Who has it, who wants it, and who can benefit from it.
Right now, MLGW has it (along with the gas and the water). But there are always options for our hometown powerhouse. We could restructure it to be more like other city divisions, or we could sell it to the highest bidder.
The city might need the money, but selling the utility won’t fix the cause of our budget woes. Plus, MLGW bills to customers are high enough already. I shudder to think what they would be like under a private company in business to make money.
Memphis Networx, the telecommunications company in which MLGW owns a majority stake, may be the best example why we should not sell the utility. At a meeting last Thursday, MLGW board members approved a $750,000 short-term loan to Networx. The loan, to be repaid in 90 days, is supposed to be financially beneficial to MLGW but is also needed to keep Networx solvent.
The funding brings MLGW close to the $32 million cap on its Networx investment set in part by the City Council. Council members provide checks and balances that simply wouldn’t exist with a private company.
Then there’s the issue of open information. Since Networx is a private company—though it’s heavily financed by public funds—it’s been difficult to get specific financial information about it. A privately owned MLGW could present the same problem.
A better plan is probably the recommendation to merge four of MLGW’s divisions—human resources, audit, legal, and information services—with their City Hall counterparts for a combined $4 million in savings.
The recommendation includes eliminating several vacant MLGW human-resources positions and using city attorneys to represent the utility in legal actions. In this time of penny-pinching, it seems rational, but not everyone agrees.
“I personally think it’s an encroachment on your charter,” Joe (the City Council member, not the TV judge) Brown told the board last Thursday. “It’s going to create more problems than it’s worth. This utility has always stood alone. … I think this encroachment would be devastating for this utility.”
Brown also worried that City Hall would not have the experience or expertise to handle the utility’s affairs, especially when it came to human resources.
“We’re talking like it’s a merger, but it’s outsourcing,” he said. “It looks like City Hall is trying to run this utility company rather than this utility company running itself.”
Hmmm, doesn’t the city of Memphis own MLGW? And doesn’t the City Council have to confirm the mayor’s nomination for president? .
I don’t want the City Council to run the utility, but geez, maybe MLGW does need a reminder about what the M stands for. I’ve always thought MLGW was a bit of a strange animal. They have a gift shop in their lobby. And despite being the city-owned utility and having a monopoly, they used to advertise on downtown billboards.
It may be time to bring MLGW more under the city’s umbrella. Especially because it’s a rainy day.
