Weekly Update: Explaining our $50 million challenge


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Ever since the charter amendment was approved this month that will add an additional roughly $5 million per year to our city’s revenue, I’ve been asked this question: So, how will you use that money?

Good question. But to answer it, we need to take a step back and understand what’s ahead for our city, financially, in the coming years.

I call it the “$50 million challenge.” There are three big hurdles ahead of us, so let me clearly explain them to you now:

  • We need to hire more police officers. You’ve heard me say this before, and you’ll hear me say it again. But there’s a cost attached: Some $12 million for a net increase of 300 officers (that’s additional salary minus overtime savings).
  • We must fully fund our annual pension contribution. The state is making us do this by 2020. This is always a moving target given how the fund performs, but we’re estimating that’s another $26 million by 2021.
  • We’re losing money from the state. The Hall Tax on investment income is being phased out in accordance with a law passed this year, and we’re projecting that will cost us about $14 million by 2021.

Again, that’s a roughly $50 million challenge over the next half-decade -- above and beyond the usual increased cost of doing business. For context, our budget this year is $667 million.

Understand, of course, that this is a rough framework. And these are gradual changes. We’ll be grappling with the incremental parts of the challenge in the next few fiscal years, but this is simply an idea of what we’re up against -- shared with you now, so no one is surprised when it happens.

And it’s not all doom-and-gloom. In fact, Chief Financial Officer Brian Collins told the City Council Tuesday that even though these projections aren’t great, they’re rosier than a similar presentation he would’ve given four years ago. Since those tough days, we’ve made enormous progress on the city’s financial picture.

Plus, we’ve identified areas in which we can grow our revenue and lower our expenses beyond the new MLGW money. We’re going to work hard on addressing the fees utility companies pay us to use our rights-of-way. You already know that we’ve worked with IBM to identify efficiencies and savings in our Emergency Medical Services operation, which could also mean better services to our citizens. We also know that tax revenues can increase gradually as our local economy grows in the coming years.

So, $5 million more from MLGW? Great! I hope you’ll understand, though, the bigger puzzle of where this fits -- and understand the situation Chief Collins, the City Council and I will be managing the next few years.

See you at 3.0: You’ve heard quite a bit about Memphis 3.0, including in this space. You’ll begin to see and hear much more about our comprehensive planning process in the coming weeks, too, as our kickoff rallies begin. I’m going to try to make as many of them as I can, and I hope to see you there. Here’s a list:

Nov. 28: Ed Rice Community Center, 5:30 p.m.
Nov. 29: Riverview Community Center, 5:30 p.m.
Nov. 30: Gaisman Community Center, 5:30 p.m.
Dec. 1: Hickory Hill Community Center, 5:30 p.m.
Dec. 2: Sexton Community Center, 5:30 p.m.
Dec. 3: Orange Mound Services Center Complex, 10 a.m.
Dec. 3: Whitehaven Community Center, 2 p.m.
Dec. 5: Raleigh Community Center, 5:30 p.m.
Dec. 6: East High School, 5:30 p.m.
Dec. 7: Pipkin Building at the Fairgrounds, 5:30 p.m.
Dec. 8: McFarland Community Center, 5:30 p.m.
Dec. 9: Bert Ferguson Community Center, 5:30 p.m.
Dec. 10: Cossitt Library, 10 a.m.
Dec. 10: McWherter Senior Center, 2 p.m.

Do us and yourself a favor -- pick one and drop by. We want to hear from everyone. In fact, it’s essential that we hear from Memphians for this plan to be the best it can be.

Proud to partner with the Crime Commission: You probably saw this week that the Memphis Shelby Crime Commission unveiled its Operation: Safe Community 3 plan to reduce crime. I’m glad it supports our drive to hire more officers and make our community policing efforts even stronger. And I’m also glad that it’s geared to make a tangible, focused impact early in its implementation. To read the plan, click here.

Thank you, Information Services and Public Works: Take a moment to read this article from Esri News highlighting how our Division of Public Works and Division of Information Services have worked together to use technology to improve the service we deliver to you. Great job, directors Robert Knecht and Brent Nair and staffs!

A special commendation: I tell you all the time about the great work of our employees, so allow me to close today with this: Earlier this week, a participant in a group touring the T.E. Maxson Wastewater Treatment Plant fell ill with an apparent heart attack. But I’m proud to share that as the result of the swift action of our employees who administered CPR and used a defibrillator on site, this person is alive today.

I send a heartfelt thank you to Mike Brower, Marcelo Natuplag, Creola Samuels, Don Davis, Charles Gooden, Blair Terry, Carlton Mull, and Memphis Fire Station 10 on South Parkway. “You have all exemplified how and why we train for such situations and have shown that when called upon we are able to do what is necessary,” Director Knecht wrote to the crew, and I could not agree more.

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