A Proposed Memphis 5-Year Fiscal Plan — 799 Days Later

In January, 2012, Mayor A C Wharton said that within 100 days his administration would develop a five-year strategic management and fiscal program for Memphis. It has been 799 days [as of March 31, 2014] and the five-year plan has yet to be presented.

In July of 2012, the City Council adopted an ordinance requiring the annual presentation of a consolidated budget including a six year operating plan and a six year capital plan, which together shall serve as a strategic business plan for the city. The wait continues.

On several occasions, the administration has said the 5-year plan would be presented to council members at a following month’s meeting. The wait continues.

On numerous occasions in recent months council member Wanda Halbert has decried the lack of an overall strategy to guide the council in its decision making saying that it appears the administration picks, in ways not understood by the council, new projects to fund while continuing to repeat that the city is in a fiscally tight situation.

In February, Mayor A C Wharton said that the 5 year plan would be presented after the budget decisions for the upcoming year have been made.

Among the reasons for a 5 year strategic plan, according to the Mayor, were looming fiscal problems. It appears the Mayor’s perception was accurate, as recent presentations by the administration indicate an $80-million gap between the annual required contribution to keep the city’s pension plan in the black and what the city is actually paying into that program. The administration and council have begun discussion about possibly increasing those contributions by $15-million a year over five years to reach the goal of funding the pension plan at the needed $100-million a year. Needless to say, the city does not seem to have an extra $80-million available, so, as the administration says, “everything is on the table.” Despite that, the administration has said more than when discussing its proposals for next years budget it does not anticipate proposing a property tax increase this year.

Earlier this year “A Strategic Fiscal and Management Plan for
the City of Memphis, FY2015-FY2019″ produced by the national firm Public Financial Management, Inc., also known as the PFM Group, along with three local consultants, has been made public. While this document by a consulting firm engaged by the city underwent revisions during its draft status to emphasize recommendations which the city administration thought were higher priorities, it is not the city’s five year plan. Not only did Mayor Wharton say at the time of the public release of the consultants’ report that the city’s five year plan is still in the works, the consultants’ document does not meet the criteria outlined in the city ordinance. It is a report which addresses in rather broad concepts rather than the more focused approach expected in a city plan.

Given the city’s financial commitments and revenues, it may be fair to suggest developing a practical five year fiscal plan which honestly reflects proper funding for pensions, health benefits, payroll, and city services and a reasonable tax rate is an extremely difficult task. The original 100 day time line outlined in January, 2012, may have been overly optimistic. A judgment as to whether taking considerably nearly 800 days to develop the plan is reasonable and worthwhile is both subjective and dependent upon the eventual value of the plan.

Yet if the Mayor’s analysis two years ago was right, that a long range plan was needed to guide the city in its endeavors for the years 2013 and beyond but today as the fiscal year 2015 budget is crafted the five year plan does not yet exist. One might wonder if the city has lost a lot of valuable time to acquire the stated opportunity to come to grips with the economic realities.

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