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Politics Politics Feature

The Sammons Gambit

Eyebrows have been raised big-time this week by Memphis Mayor A C Wharton’s unexpected action in moving to replace his reliable chief administrative officer (CAO), George Little, with Airport Authority head Jack Sammons (a transfer that only Little, of the principals involved, was speaking to as of press time).

Jack Sammons

There is general agreement among various observers (including Little!) that the mayor’s action is motivated by political considerations. Though Little (“Chief,” as he is referred to around City Hall) is an excellent manager, he is manifestly uncomfortable with the political aspects of government, and 2015, with the mayoralty at stake in a showdown city election, is going to be a hothouse political year.

The mayor’s move (which would keep Little employed as city operating officer) engages at least two political fronts. State law prohibits members of a metropolitan airport authority from serving with the government that supervises it — in this case the City of Memphis. Consequently, emergency legislation to make Sammons’ city appointment valid must be filed, and the office of state Senator Mark Norris (R-Collierville) confirmed that he was working something up.

The task of doing so was complicated by the fact that the deadline for filing new legislation has long since passed. But Norris, who is Senate majority leader, is also vice chair of the three-member Senate Calendar Committee, which has oversight on all bills and apparently can authorize exceptions to the rule.

It is no secret, either, that FedEx founder Fred Smith, whose political influence on both sides of the political aisle is huge and who has both professional and family ties to Sammons and, to say the least, a major interest in Airport Authority matters, is urging such an outcome.

If Little has, by his own statement, little taste for the game of politics, Sammons might have been born for it. An ingratiating presence, he served several influential terms on the city council and, for two months in 2009, was the appointed CAO  for interim Mayor Myron Lowery when the abrupt retirement of then Mayor Willie Herenton forced a special mayor election and the temporary elevation of then-council Chairman Lowery.

Sammons might have forged even further in local political significance, but for a tactical misstep in 1994 when he embraced an alliance with then-Congressman Harold Ford Sr., a major Democratic power broker, in a bid as an independent  for Shelby County Mayor in a race that Republican nominee Jim Rout eventually won.

Angered, the local  Republican establishment returned the favor by successfully backing lawyer/businessman John Bobango against Sammons for the latter’s council seat in the 1995 city election. Such was Sammons’ resilience and political skill that, instead of sulking over his defeat, he mended fences with the GOP, took his medicine, and offered effective service for the next four years as local Republican treasurer.

By 1999, Bobango chose to retire, and Sammons had no difficulty in regaining his seat. He was appointed chairman of the Memphis-Shelby County Airport authority two years ago. Meanwhile, he continues as president of Ampro Industries, a maker of hair-care products.

Sammons, a gifted administrator, has good residual connections with the mini-universe of City Hall, including the city council, where Wharton sorely needs some help. (See “Opinion,” next page.) Perhaps unsurprisingly, though, two members of the Council who have mayoral ambitions — Jim Strickland and Harold Collins — professed themselves concerned about issues, largely technical, associated with Sammons’ pending appointment.

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News The Fly-By

Memphis Police Department Hit with “Blue Flu” Protest

The “blue flu” protest by Memphis police officers is rooted in changes to their health-care benefits and proposed changes to their retirement benefits. Some have called the benefits “generous,” but others contend they match the tough and sometimes gruesome work of being a cop in Memphis.

The changes prompted hundreds of Memphis Police Department (MPD) officers to call in sick before, during, and after the Independence Day holiday weekend. The protest was not sanctioned by the Memphis Police Association (MPA), according to the police union’s president Michael Williams.  

Last month, the Memphis City Council approved a

24 percent increase to the premiums city employees and some retirees pay for their city-sponsored health insurance. The increase was a compromise down from the 57 percent rate hike proposed by Memphis Mayor A C Wharton. 

The council also cut from the city’s health plan the spouses of city employees if they can get insurance from their employer. Also, a fee on tobacco users was raised from $50 to $120 per pay period.

These health-care changes are on the books but won’t take effect until later this year or the beginning of next year. But what about those benefits? 

The city’s five-year plan from the PFM Group, expert consultants hired by the city, was delivered in January and said that some of the city’s employee health-care benefits are actually better than those of other cities comparable to Memphis. 

• Health insurance premiums —The original 70 percent/30 percent split between the city and employee has shifted over the years to a 75.7 percent/23.1 percent split in 2012, the plan says. The shift raised the cost to the city by

$3.8 million from 2010 to 2012. 

Expenses to cover those costs rose 36.6 percent from 2008 to 2012, the study says. The same costs rose only 22.8 percent in the same time for similar public and private employers. 

Health insurance deductibles – Memphis city employees pay $100 per person up to $300. Metro Nashville employees pay $2,000, the study says. Atlanta employees pay $900. Boston employees pay $400. “This constitutes a generous benefit to [Memphis] city employees compared to other public and private employers,” the study says.

George Little, the city’s chief administrative officer, said Wharton administration officials have used the five-year plan in making policy decisions. But changing employee health-care options to curtail city spending has been suggested by similar studies going back to Willie Herenton’s administration, Little said.  

 “[The benefits are] higher than the peer cities and better than — I mean way, way better — than most folks in the private sector are getting right now,” Little said.

But Williams said officers here deserve better benefits packages because they don’t get Social Security benefits like those in the private sector, and they have hazardous jobs that take a toll on their bodies and that “no one else wants to do.”

“We arrive on a crime scene with carnage and dead babies and bodies that have been decomposing for days or children that have been molested,” Williams said. “So, to say our packages are better; they may not be better.”

The city council is still debating changes to employee pension benefits, which the five-year plan contends has some components “richer than comparable jurisdictions.” 

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Cover Feature News

The Wearing of the Green

The short-term peace on Greensward parking negotiated between the Memphis Zoo and the Citizens to Protect Overton Park (CPOP) expired late last month when the last shuttle ran from the Overton Square parking garage to the park. 

Memphis city officials say overflow parking will likely resume on the Greensward. CPOP says it will continue to encourage people to enjoy the Greensward. But continuing the “Get Off Our Lawn” campaign — the peaceful, sit-in style protest — will depend on the continued cooperation of all parties to find a way to keep cars off the grass for good.   

Brandon Dill

Tina Hamilton (left) and her Great Dane, Dominic, relax with Allison Tribo and her dog, Foxy, inside Overton Bark dog park.

The fight for the Overton Park Greensward has cooled somewhat, especially from the tense beginning that threatened the arrest of a CPOP protestor. Now, all involved seem focused on a new, more-distant horizon that promises a long-term solution to the parking problems at Overton Park and the Memphis Zoo. They await proposals for a fix from Memphis City Hall, which are expected in a couple of months. The city’s chief administrative officer, George Little, says he’s agnostic on the solution but that all sides need to have skin in the game.

“My position is when everybody feels like they’ve got something to gain and everybody feels like they’ve got something to lose, that’s when we’re going to see some movement,” Little says. “It’s not going to happen as long as one side is like ‘I’ve got mine, you’re not getting yours.'”

The Opening Salvo

The guy directing cars for parking at the Memphis Zoo pretended not to see Jessica Buttermore. He walked right across the field to her and turned his back, stopping just two feet from her blanket on the grass. He pumped his palm toward his chest until a big, whirring SUV came to a stop just four feet from where Buttermore was reading a book.  

She sat up and gave him a look, but the attendant moved on and so did the people from the SUV. None of them said a word to her or even looked her way. Buttermore remained on her blanket, sitting in bemused disbelief. Did that just happen?

More cars came as the day wore on. By the time Buttermore’s group packed their stuff, they found themselves marooned, an archipelago chain of islands in a dusty sea of parked cars. No one parking cars that day acknowledged the people on the lawn.   

This incident lit the fuse for what has now been a weeks-long fight for the Greensward in Overton Park. 

“It became really clear that the zoo … felt like it was their space,” said Buttermore, chair of CPOP. “They had ownership of it and we had no right to it as members of the public, when, in fact, it is a public space. At that point it became really clear that we have got to really amp this thing up.”

And they did. The day after she and others were ignored by the parking attendants, they showed up with warnings written on big signs: “Don’t Park on Our Park.”

Wind of a bigger, more organized protest planned for the Greensward the following weekend reached City Hall. So that next Saturday, Little rode by on his bike for a first-hand look.

“I felt like I was riding up and down the line in Braveheart,” Little said. “You know when the English and the Scots are on the opposite sides? I felt like I was riding up and down the line. All I needed was a shield to bang on. I mean, really? C’mon. We’re all Memphians.”

Two Sides and the Mayor

Like in Braveheart, people on both sides of the line Little saw that day believe in something bigger than themselves. Unlike most movies, there was no clear good guy or bad guy in the Overton Park parking war. 

Brandon Dill

Pip Borden, 9, enjoys a popsicle during a hot afternoon on the Greensward at Overton Park.

The protestors believe everyone benefits in keeping that corner of Memphis uncluttered and open to any who want a respite from urban life — as it was designed to be by George Kessler in 1901. Zoo officials believe everyone benefits if we allow parking in the Greensward because it helps a top-tier Memphis attraction that educates thousands each year and is a major tourism and economic engine for the city. 

The physical stand-off between the two sides got tense that weekend. Cops were called. But they were called off by Memphis Mayor A C Wharton, who closed the Greensward to parking soon after that weekend. Shuttles were hired to take visitors from the new garage at Overton Square to the zoo, or the park, or the Brooks Museum of Art. It was going to be an uninterrupted, five-week pilot program.

But zoo officials asked Wharton to reopen the Greensward for what was going to be a busy Memorial Day weekend. He did, but only for that weekend. Then, zoo officials asked Wharton to reopen the Greensward for a major corporate event for Toyota that was going to bring in an additional 4,000 visitors to the zoo. He did, but only for that event.   

The Greensward was closed every weekend until the end of June. And Wharton’s administration has been working with all sides to forge a new short-term compromise and to find that long-term solution.

So, passionate factions with claims to the same land? Frustrations coming for all the major players? Clear victories blunted by compromise? A saga that began like Braveheart has become more like Game of Thrones

What is a Greensward?  

The word “Greensward” is foreign to many — even many native Memphians — but it’s the name for the large grassy field that surrounds Rainbow Lake and the new playground on the west side of the Old Forest. It’s 21 acres from end to end and side to side. (FedEx Forum sits on less than 14 acres.)

Brandon Dill

Brian Sanders enjoys a cold drink along with (from left) Elaina Norman, Patricia Duckett, and Kim Duckett as they watch Cedric Burnside Project perform during the free summer concert series at the Levitt Shell in Overton Park.

The Greensward is at the height of its intended use on the first warm days of spring. It’s always bustling with people walking dogs, families having picnics, couples lounging together on blankets, games of Frisbee and hacky sack, drum circles, and more. It’s a large, open, natural area, which is hard to find in Memphis.

The land technically belongs to the city of Memphis. That is, it belongs to everyone in the city and is wide open for them to use it. But the Overton Park Conservancy (OPC) manages the park for the city. So, upkeep on the Greensward falls on them. 

The Memphis Zoological Society has a similar management contract with the city for the 70-acre zoo and the 3,500 animals there. That contract says the city will provide parking, and for more than 20 years, that has meant overflow parking on the Overton Park Greensward.

Memphis Zoo CEO Chuck Brady calls it an “old problem” and says the zoo has been misunderstood on the issue for years, not just during the recent dust-up.

The decision to use the Greensward for overflow parking was made when the city — not the Memphis Zoological Society — managed the Memphis Zoo decades ago, Brady says. A new master plan for the zoo in 1986 called for 1,000 parking spaces to be built in front of the zoo. Neighbors complained, and that number was shrunk to 655, which the zoo has in its front lot now, Brady says. The idea then was that any overflow parking would be put on the Greensward.      

Permanent parking solutions have been proposed twice by the new zoo management, Brady says. One was a new parking deck slated for the east side of the zoo. It was scrapped because it would not best perform its secondary purpose as a floodwater retention basin. 

After that, Brady says zoo officials proposed building a parking lot on the strip of land on the southeast corner of East Parkway and Sam Cooper. The zoo planned to use a tram to cross the street into the park and then into the zoo. Brady said that plan was axed as city officials said they had other plans for the land. 

“I bring these things up because we’ve heard a lot of criticism that we haven’t tried anything,” Brady says. “But we have been trying — not successfully, we can say that — but we’ve definitely been trying to find a permanent solution that’s doable.” 

That’s part of what frustrated Brady when the latest parking controversy began a few weeks ago. But he was more frustrated because he said the zoo and the Overton Park Conservancy were “very close” on a new agreement on parking, an agreement that was scrapped in the wake of protests, shuttles, and the promised new way forward. 

The basics of the agreement would have allowed the zoo to use the Greensward while they work together with OPC to find a long-term solution that would eventually yield the Greensward completely back to the park.  

“The [memorandum of understanding] really outlined how we would work together over the next few years to achieve some short-term and long-term parking solutions,” says OPC Executive Director Tina Sullivan. “There was tacit understanding that OPC needed to work with the zoo on a long-term solution before we took any actions to try to remove them from the Greensward.”

Brandon Dill

Citizens to Preserve Overton Park members (from left) Naomi Van Tol, Stacey Greenberg, and Roy Barnes stand on part of the contested area of the park’s Greensward used for overflow parking by the Memphis Zoo.

Brady says he was taken completely by surprise when Wharton kiboshed Greensward parking in the beginning of the dust-up. It stung to be so close to an agreement and have it dashed and supplanted with ideas that zoo officials thought wouldn’t work.

So, the zoo issued a lengthy news release that shocked many. It accused Wharton of joining with the “protesters’ mission” and said his proposals for a fix would “lead to the demise of the zoo as we know it.”

CPOP’s Buttermore says she couldn’t believe the release made it past the zoo’s public relations department, but she’s glad it did.

“We always tell people we’re not anti-zoo,” she says. “Then this statement went out and — wow — you just did a really big favor for our campaign. We don’t have to go around really being anti-zoo because you just made a bunch of people really mad.”

And it did. Wharton issued a formal statement saying the “tone of the press release was disrespectful and inappropriate,” but he committed to continue working with the zoo and park officials to find a common solution.

“It was a strong response, and I apologized to the mayor that it was personal,” Brady says. “We’re passionate about this zoo. We built this zoo to what it is today. I don’t mean me. I mean this whole organization. We work hard every day.”

New Solutions?

Wading into the land of parking solutions for the park is much like wading into Rainbow Lake to look for something you lost. You know it’s in there somewhere but you can’t see it from the surface. You know finding it will be hard, dirty work. You’re not exactly sure where it is. And you’re not sure what you’ll bump into while you look. 

Wharton outlined three solutions in May. Those solutions are the ones that drew the ire of the zoo officials. 

One idea was the short-term shuttle trial. Depending on who you talk to, the experiment had limited to moderate success. Ridership was lower than expected but some thought the program wasn’t promoted enough or given enough time to catch on. Even Brady agrees that shuttles might be a part of a long-term parking solution for the zoo.

Wharton also opened up the General Services area for free parking to zoo visitors willing to walk through the Old Forest to the zoo. It was originally panned by zoo officials because the 1.2-mile round trip would make the option prohibitive for children, the elderly, or disabled. But zoo employees are now parking in the General Services area, which has freed up about 100 parking spots in zoo lots.

The final idea that came from Wharton in May is the one that likely has the most long-term traction. It’s the most expensive, most permanent, and probably toughest to execute. But it’s the one that has the most support from the city, the zoo, and the conservancy. 

Wharton proposed a $5 million, 400-space parking deck to be built somewhere on zoo property or near the zoo. Zoo officials quickly said a garage needed to be 600 spaces and the cost was likely closer to $12 million. But how big it should be and how much it will cost are almost secondary questions.

Brandon Dill

Childbirth educator Sarah Stockwell (left) talks with Mary Beth Best of Birth Works Doula Services during an event at Overton Park benefiting Postpartum Progress, a nonprofit that supports new mothers with mood or anxiety disorders.

City and zoo officials agree the toughest questions for a garage are: Where will it be built? Who will pay for it?

The easiest and quickest location seems to be the city’s General Services area that fronts East Parkway. But that land has been promised to the backers of a museum devoted to the works of photographer William Eggleston. Little says the city is now in a development deal with that group and that the negotiations pretty much lock up the property. Messing with part of that deal could mess it up completely, Little said, especially when it comes to luring private investors. 

A parking deck could also be located where the zoo’s maintenance facilities now stand. But where would those facilities go? Again, the General Services area could easily stand in but that puts the Eggleston deal at risk.     

A deck could even be built on top of existing zoo parking but that would, of course, take away valuable parking spots. And the deck would have to pass some pretty high design standards to blend into the zoo, the park, and the surrounding neighborhood.

But if a proper site was found and if a design was approved, Little and Brady both balked at financing a garage.

“There’s no way on God’s green earth that this mayor can come in and pledge general obligation bonds to build a zoo garage,” Little says. “You could make a case for the Cooper-Young [garage] deal that there is business activity and yadda, yadda, yadda, But the zoo? Heck, I don’t know if you’d even get five votes [from the Memphis City Council] for that.”

The zoo raised a total of $35 million from private sources for Teton Trek and the coming Zambezi River Hippo Camp exhibits, Brady says.

“But raising money for a parking garage is almost impossible,” he says. “People don’t give dollars for parking garages. Our donors want to see what their gifts do in the community. For example, there will be 60 million to 80 million visitors in the 50-year life of the hippo [exhibit].”  

The Nuclear Option

Little offered up one other solution in a conversation last week. He says it was maybe only one wrung down from a “nuclear option” and to avoid it, park advocates could be spurred toward a compromise: trams running through the Old Forest to shuttle zoo visitors from satellite parking lots. 

“We’ve checked and there’s nothing that precludes it,” Little says. “Is it inconsistent with the [1989] master plan? Maybe. But there’s no prohibition to doing the trams.” 

The idea was abhorrent to Buttermore. CPOP’s biggest recent victory was getting the Old Forest designated as a state natural area, which offers it special protections (against motorized vehicle traffic, among other things, Buttermore says). To them, the Old Forest is the hallowed sanctuary in the park they love, and running a tram through it would, indeed, be the nuclear option, Buttermore says.

“If the city and the zoo are upset about people going out and sitting on the grass on the weekends, people are going to throw a fit [if trams are allowed],” Buttermore says. “So many people run and walk their dogs [in the Old Forest]. The daily users of the road in the Old Forest is probably like 110 times that of the daily users of the Greensward. [The Get Off Our Lawn group] was a small group of protestors. If they ran trams through the Forest, they’d really see a protest.”

Brandon Dill

Poppy Belue, 9, stands up on her father Michael Belue for a better view as they watch Cedric Burnside Project perform during the free summer concert series at the Levitt Shell in Overton Park.

Show Me Yours? 

No matter what happens at Overton Park, it’s pretty clear that all of its residents — the zoo, the park, the Memphis College of Art, The Memphis Brooks Museum — are going to be neighbors for a long time. And as those venues get more popular (as they have in the past few years) then they all need to show each other plans on where they’re headed, says Sullivan.

“I feel we need to consider how we’ll accommodate new visitors as we make improvements to the park and to the zoo as it continues to grow in popularity and it will,” Sullivan says. “We need to be looking ahead,  years down the road, and making sure any improvements we make or plans that we make now are flexible enough to accommodate that future usage.”

Buttemore says it would be as easy as getting all those neighbors together and sharing master plans. 

 

Conserving on Conservancies

The fight for the Greensward is not done, but it has impressed Little with another idea that could affect parks across the city in the future. 

He says conservancies are great on the surface, and he likes the idea of private citizens rallying behind a park to make it better for everyone. But he’s afraid the structure of these public-private partnerships have maybe been too loose and given too much power to the private managers such as OPC. He’s also afraid private groups could end up cherry picking the city’s nicer parks.

“We could turn around one day and all of the prime city assets are under some kind of conservancy,” Little says. “The fact is, these [partnerships] reinforce the idea that ‘this is my park’ as opposed to something that belongs to everybody.”

Sullivan, the OPC’s director, says Little’s idea was “interesting.”

“I would absolutely say that we don’t consider ourselves owners of the park,” Sullivan says. “This is very much a city park and we manage it on behalf of the city and behalf of the citizens of Memphis. So, we’re trying to deliver what those citizens want.” 

Conservancy deals are coming together now for Audubon Park in East Memphis, Little says, and also for Downtown’s Morris Park at the corner of Poplar and Manassas. Decisions on those deals, he says, will be informed by what’s been learned at Overton Park, including the fight for the Greensward. 

Game of Parks, anyone?

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News The Fly-By

Memphis Police and Fire Consider Moving Offices

The Memphis Police Department (MPD) headquarters is “crowded and costly.” The Memphis Division of Fire Services headquarters has a nice river view and is “not the highest and best use of the property.” The two departments could cut costs for taxpayers by moving in together and sharing some back-office staffers. 

Toby Sells

Those ideas come from the city’s five-year strategic management plan published in January by the PFM Group consultants. The real estate ideas have come back into focus recently, as the Memphis City Council considers a deal to take over the Donnelly J. Hill State Office Building.

The building is worth about about $2.4 million, and the state would hand over its title to the city for the use of 400 parking spots in the Peabody Place garage for the next 15 years.

The city now has eight leases for office space around town. It pays about $3 million each year in rent to provide office space for about 460 employees. Real estate consultants have told councilmembers they could consolidate many of these offices into the Donnelly building on Civic Plaza, including the Memphis Housing Authority, Housing and Community Development, and Information Technology. 

But much of the conversation on the state building has at least touched on moving MPD. The department is now housed on three floors of the Shelby County Criminal Justice Complex, more commonly known as 201 Poplar. MPD moved there in 1982 but quickly outgrew it. Complaints about space constraints have come from former police directors James Bolden and Larry Godwin and current director Toney Armstrong.     

“Honestly, I think we have outgrown 201 Poplar,” Armstrong told councilmembers in budget discussions in 2012. “We have been able to grow at the uniform patrol level but not at the investigative level, simply because we don’t have the space for it.”

The cost to rent the currently cramped space is $1.4 million per year. That’s way too high, according to the consultant’s five-year plan. At the end of 2012, the average rate for Class A office space — the very best office space — in downtown Memphis was $16.75 per square foot, according to the city’s consultants. Taxpayers are leasing the MPD space in 201 Poplar for about $17.70 per square foot. 

The fire department has largely been left out of the recent conversations about office moves and consolidation, but the PFM report said its Front Street location is “not ideal” and is in “what could be a prime location for development.” 

The five-year plan said that Memphis police and fire should consolidate some of their office functions, and even communications, to save money. And, it said, sharing a physical location would help do just that.

But the Donnelley building wasn’t on the table in January when the five-year plan was published. Instead, the plan said the city should renovate the old police headquarters at 128 Adams, which has been vacant for the past 30 years. 

The renovation price tag of about $30 million puts the project out of reach, the city’s Chief Administrative Officer George Little has said in past budget discussions.

Consultants said the cost would be offset by eliminating rents in other places or could be paid from the sale of the fire department headquarters on Front Street. Or, the report, said 128 Adams could be sold to a private developer.

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Opinion

Pension Zombies Threaten Memphis!

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The news gods have not been kind to Memphis the last few years. We’ve had endless budget stories, tax stories, the school system merger and un-merger, six-hour board meetings, five-hour City Council meetings, the preternaturally calm Mayor Wharton, and petty political grievances.

Now comes the public pension “crisis” and a fat file of “valuation and projection assumptions” and alarming claims from budget hawks and union leaders that Detroit-style doom is near and, depending on your point of view, either pensioners or the city administrators are as dangerous as zombies.

Pensions are extremely interesting to the people who are receiving them or are about to receive them. Otherwise, who wants to do the math? Pensions are probably what Robert Penn Warren was thinking of when he wrote in “All The King’s Men” that a politician working a crowd should “make ’em cry, or make ’em laugh” but “don’t try to improve their minds” because “it breaks down their brain cells.”

The trigger for the latest pension blast, first reported by Jackson Baker, was a speech and accompanying report from chief administrative officer George Little about the state of the pension plan. I’ll spare you the details, but the 40-page report, highlighted in red lest anyone miss the point, concludes that the “unfunded actuarial accrued liability of the current plan” is trouble. Union leaders responded by asking if Memphians really want to have “80-year-old fire fighters” and fireman-flight if the pension plan is changed.

As one who gets paid to follow this stuff, a few comments.

First, if a fireman has been working 50 years until he’s 80 years old then he is either really bad at saving money or enjoys the excitement and camaraderie of the fire station more than the golf course. A senior fire fighter makes well over $50,000 a year according to city figures. A savings rate of 5 percent would create a nice sum, apart from a pension. Tennessee has no state income tax, and Memphis has no payroll tax. The cost of living is among the cheapest in the nation.

Just a guess, but I would say the public is tired of hearing police and firemen threaten to move out of the city (in greater numbers than ever) or, worse, put up billboards claiming Memphis is unsafe as a negotiating strategy.

Wharton did not say anything about a pension crisis when he spoke to reporters earlier this summer to assure us that Memphis is not going bankrupt, ala Detroit. Just the opposite. He said the pension plan is much better funded here but some tweaking would be needed. The report that came back last week seems to suggest this will happen sooner rather than later.

The city finance department assumes the pension fund will grow 7.5 percent a year. Standard assumption, they say. But is it? What conservative investor wouldn’t be thrilled to get a safe 4 percent, much less 7.5 percent on his or her retirement savings the last five years? By the compounding rule of 7 and 11, money doubles in 11 years at 7 percent and in 7 years at 11 percent. You wish.

True, the Standard & Poor’s 500 Index has averaged a return of 8.6 percent over 20 years, 7.3 percent over 10 years, 7 percent over 5 years, and 18 percent over 3 years. But timing is everything. If you took your nest egg out in 2009 after the stock market crash, you “lost” half of it.

Here’s an illustration. One investor, Miss Mattress, had $100,000 under a mattress in 2009 and kept it there. Another investor, Mr. Market, had $100,000 in the stock market and kept it there. Mr. Market lost 50 percent in 2009 and gained 18 percent a year for the next four years. Historically, that is like winning the lottery four years in a row.

Who has more money today? Miss Mattress has $100,000. Mr. Market has about $97,000. A city pension plan has to try to take care of both of them.

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Opinion

Super Tuesday Coming Up on City Budget

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Stock up on the energy drinks. The upcoming City Council session on the budget next week looks like a marathon, with scary numbers like a 50 percent increase in property taxes and/or 3,250 layoffs of city employees being tossed out.

The City Council’s Budget Committee met with Mayor A C Wharton Thursday in a dress rehearsal for Super Tuesday. Wharton and CAO George Little presented four for-illustration-purposes-only scenarios ranging from a property tax rate of the current $3.11 per $100 of assessed value with 3,250 layoffs to a scare-the-pants-off-you $4.83 with no layoffs and hefty payments for future debt service and pension obligations. In between were the mayor’s favored $3.36 rate with no layoffs and $3.11 with 1,420 layoffs.

The final rate is likely to be something north of $3.36 and south of $4 when the council gets through hacking away at it. The council and administration have been engaging in a dance of “who will make the tough cuts.” Councilman Kemp Conrad, a budget hawk from way back who has said for years that the council and administration are “kicking the can down the road” to ruin, called the $4.83 rate — which he does not support — an “honest budget” because it owns up to long-term obligations as well as wish-list budgets from various city divisions. From the administration side, Little presented, in the finest of fine print, a list of 21 possible cuts and savings.

“This is the package,” he said when pressed by members about whether the administration is willing to take ownership of them.

The items in the package include such goodies as elimination of medical benefits for the dependents of retirees, a defined contribution retirement plan instead of a defined benefit plan for city employees, reductions in paid leave, elimination of the proposed 4.6 pay increase for city employees, and a freeze on cost-of-living adjustments in employee benefits.

Cutting 3,250 jobs would eliminate nearly half of the city’s workforce, impose extreme cuts in every type of city services,, restore the 4.6 percent pay cut for employees who don’t lose their jobs, and cut the property tax rate from Wharton’s recommended $3.36 to $3.11. At least some of the increase is due to a decline in the aggregate property valuation in Memphis. When that goes down, the tax rate has to go up to compensate.

Boosting the property tax rate to $4.83 (on top of the Shelby County rate of a proposed $4.32) would give Memphis a sky-high combined rate that would make the most dedicated Memphians think seriously about leaving town. The “upside” would be no layoffs of employees, no cuts in services, restoration of the 4.6 percent pay cut, and payment of about $170 million to future debt service and reserves, pensions, and post-employment benefits.

The bargaining begins , or ends, Tuesday. The state comptroller has served notice that Memphis may not balance its budget via smoke and mirrors, also known as pushing around debt.

“I don’t think we will have a budget on Tuesday,” said Councilman Shea Flinn.

Categories
Letter From The Editor Opinion

Letter From The Editor: The Klan and the Sign

I enjoy Commercial Appeal writer Wendi C. Thomas’ columns. I mostly agree with her, and even when I don’t, I appreciate her sass, intelligence, and wit. That said, her January 13th column, titled “Marker for Klan founder Forrest moved by KKK’s worst nightmare: A powerful black man,” was, as Thomas might say, something of a hot mess.

The column was about the removal of a sign put up by the Sons of Confederate Veterans in Forrest Park, which was detailed in last week’s Flyer cover story by Jackson Baker. The basic facts are these: Lee Millar, writing as chairman of the Shelby County Historical Commission, offered to put up a new sign for the park. Cindy Buchanan, then the city’s park director, responded in a letter to Millar: “The proposal to create a low, monument-style sign of Tennessee granite with the park name carved in the front was reviewed by park design staff and found to be appropriate in concept … similar to the monument-style signage placed by the city at Overton Park.”

George Little, the city CAO, and Mike Flowers, the administrator of park planning and development, were copied on Buchanan’s letter.

Millar, who is also an officer of the local chapter of the Sons of Confederate Veterans, got the SCV to come up with the funds for the sign, and it was put up last spring. In October, county commissioner Walter Bailey sent Little a three-part file on the sign and asked that it be taken down.

In December, Baker asked Buchanan about the sign. She said she recalled being asked about the sign but that she “honestly [didn’t] remember what I said to them about that.” Uh huh. Little told Baker he could find no records of anyone having signed off on the new sign. Millar had no such problem finding the letter from Buchanan that was copied to Little, and he sent a copy to Baker.

In the week between Christmas and New Year’s, Little had the sign removed. There is no doubt in my mind that Millar pulled a fast one in using his chairmanship of the Shelby County Historical Society as cover to get a sign erected by the SCV. But he did get city approval.

Thomas portrayed the whole affair as racial, with Little playing the role of a “strong black man” frustrating the Ku Klux Klan. But it seems to me that the removal of the sign was more likely a case of butt-covering by city officials. Demagoguing the affair as “black versus white” does no one any good.

Bruce VanWyngarden

brucev@memphisflyer.com