Staring down a $10 million sinkhole nestled in the fiscal year 2023 budget, “baffled” Memphis City Council members unanimously approved a funding resolution to bridge a payroll shortfall for Memphis Fire Department employees during the Tuesday, April 10 meeting.
Had the council waffled on the measure, 101 MFD new employees would have gone without checks the next pay cycle. An investigation is expected.
“If we say no to this, than people – firefighters, who put their lives on the line for our community – don’t get paid. So we’re being held over a barrel now because nobody updated us for the last year,” warned City Council member Jerri Green.
According to leaders in Mayor Paul Young’s administration, knowledge of the arrears dated back to the first quarter of the fiscal year – former Mayor Jim Strickland’s final term. The revelation occurred during the council’s Budget & Audit Committee meeting. The operating budget’s first quarter began in late October.
“During the course of the year, as we execute the budget, we start to discover anomalies and things that need to be addressed and adjusted. As part of this year’s process, one of the things we discussed and discovered was that we under-budgeted by a great amount, for fire services,” said City of Memphis chief financial officer Walter Person.
Attempts by the past administration to cover the costs within the budget’s parameters also failed.
He was joined by General Services Director Antonio Adams and MFD Chief Gina Sweat in delivering the news on the low-ball payroll estimate. The latter was cleared of any wrongdoing during the late-running quarterly update.
“I fully intend to send a letter – and I’m going to have our attorney do it – requesting discovery on emails and communications related to this, if they exist,” Committee Chair Chase Carlisle announced to the full council.
“Because it is not tenable to have that kind of direction be given and put the Young Administration and this body in the position it was placed in – if and when that was really known. And if and when direction was given to suppress it.”
The resolution’s sponsor left the council chamber after the remarks without voting.
It was the first reading of the resolution. Same night minutes were used. Voting in favor of the outlay were members Ford Canale, Yolanda Cooper-Sutton, Edmund Ford, Sr., Jerri Green, Michlyn Easter-Thomas, Rhonda Logan, Philip Spinosa, Jana Swearengen-Washington, Pearl Walker, Jeff Warren, Janika White and chairman JB Smiley.
In addition to the $9.6 million to cover payroll for the remainder of the fiscal year, another $2.8 million will be used to purchase materials and supplies.
To pay the tab, the money will be taken from the annual budget’s rainy day fund. The withdrawal will take the balance down to $103 million “and change.” The reserve hasn’t been touched since the last budget cycle.
“It’s about a $11-12 million hit to the fund balance,” said Person.
Both manpower and equipment were under-budgeted for the year by the previous administration.
Carlisle backed off an earlier proposal to cleave the two. The rejected amendment would have allowed the payroll portion to proceed to a vote. Funding for the materials and supplies, meanwhile, would have been reliant on a letter from the Young administration further clarifying the situation.
It also would have rendered a life-saving department temporarily underequipped.
“There’s a certain urgency that’s involved in this. Like I said, it was raised to our attention, really, during the first quarter of the fiscal year. The position is we’re coming to a point where we need to address it now because of budget shortfalls and potential fund issues that may impact the fire services division,” said Person.
The discrepancy will resonate, too, as Mayor Paul Young readies to present his first budget to the council next week.
“That’s going to be recurring…So, this is a nearly $10 million miss that we’re going to have to budget in and keep budgeting in,” said Green.
Council issues with the former Strickland administration – including complaints of being treated like a “rubber stamp” – aren’t unheard of.
In December, the former Mayor informed Smiley that he instructed Memphis Police Department Chief Cerelyn “CJ” Davis not to follow recently-passed ordinances curbing law enforcement procedures. The council passed updated policies following the death of Tyre Nichols.
Davis, who is currently serving on an interim basis, denied the letter’s allegations. Tennessee Gov. Bill Lee recently signed a state law banning the new rules, ending the matter.
Carlisle commended the Young Administration for its engagement with the council and constituents..
“This administration is committed to being more proactive in communicating with the public and the council.”
