Memphis City Council members agreed to tweak the budget by nearly $4 million to shore up operations across several city divisions to wrap up the Tuesday, Dec. 3, meeting.
Members only felt confident to cast their votes after the administration provided line-by-line accounting for the end of the calendar year resolution. A vote on the item was postponed by member Chase Carlisle last week after several division heads did not appear for a Budget and Audit Committee discussion.
The snub worked. Heads from all potential recipient divisions showed up for the next week’s discussion. It began with a lecture.
“I don’t know a business in this world that comes for a budget closeout and adjustment, where you wouldn’t represent your division, or your restaurant or your shift. If you’re the guy running the lunch shift and you’re off budget by 8% for the week, you’ve gotta go and explain that to your manager,” chastised Carlisle.
He was one of several members to express frustrations with the administration of Memphis Mayor Paul Young.
Among the recipient divisions will be finance, city parks, general services, the city attorney’s office, library services and public works, along with a litigation settlement. The largest recipient will be the city’s stormwater division at $2 million.
Although a relatively small sum compared to the city’s $858 million FY2025 budget, the action conjured memories of votes to shore up personnel costs in both the Memphis police and fire departments in 2024. Overtime costs for the Memphis Police Department totalled $15 million. Meanwhile, the latter payroll costs for more than 100 new fire department hires weren’t included in the budget.
As a result of additional payroll costs – including a five percent raise to most city employees – the council approved a 49-cent property tax increase during the budget season in July. Additional revenues have been gained through doubling the city’s auto registration fee and a $6.89 increase in the solid waste fee.
“I’m concerned, not about making these moves, but about what these moves say for the trend of our budget as a whole. Especially when we passed such huge property tax,” said Councilwoman Jerri Green. “The trend is alarming. We were put under the gun in budget last year. If you don’t pass these millions of dollars, police and the fire department will not get paid. And we’re right on track to do it again across several divisions now.”
City Chief Operating Officer Antonio Adams defended the revenue-neutral budget maneuvering along with the tax cut. The administration’s original request was a 75-cent hike.
“We have a dynamic city in which we serve. To which none of the division directors are clairvoyant on all the expenditures,” said Adams.
His assurance that the resolution did not affect the fund balance – the city’s reserve — did mollify some members. If the balance is used, it could affect the city’s bond rating and the costs of future debt.
Members also approved $2.5 million to fund the construction of an MPD downtown command center. The center will be used as a staging area for MPD officers on game days at the FedEx Forum. It will be located near 250 Peabody Place.
The administration originally intended to use money that remained from the Leftwich Tennis Center project to pay for the MPD command center. The city loaned $10 million in bonds to get the tennis center project underway, while donors could be arranged. From there, the city would be repaid.
Costs on the tennis center rose to more than $30 million, after initial estimates put costs around $20 million. By all accounts, the tennis center has been a success story.
Further money would come from the selling of naming rights of the building down to the nets on the courts. According to the administration, several million has already been generated.
“What we’re doing now is taking that $4.5 million and allocating $2.5 million to the downtown command center,” said City of Memphis Comptroller Walter Person.
However, the original plan fell apart after Carlisle said he couldn’t “follow the money.”
Again, the lack of documentation was given as the reason. In particular, who donated and how much?
“If we don’t have those documents, that is not good housekeeping. Because if you had to seek recourse for someone not fulfilling their pledge, you wouldn’t have a document for it,” said Carlisle.
The city would be on the hook for any loan costs, if pledges fell through.
The fact that the project had extra funds was another matter.
“That’s what I’m trying to reconcile. It’s a very simple exercise. I have my uses and they have to balance my sources. Over-capitalized is the term that we would use,” said Carlisle.
Over-capitalization is when an organization has more debt and equity than its assets are worth.
