watchdog

Wednesday, October 31, 2007

October 31, 2007

HAPPY HALLOWEEN

On Halloween it seems right to tell a few stories that I have dug up over the last few years about the Memphis City Schools, that huge TAXZILLA monster that eats up our tax money without returning much in the way of benefits or results. The Central Nutrition Center is only the tip of the iceberg.

One of my favorite incidents is the one involving Roland McElrath, our current City of Memphis Director of finance. After the City Council passed the disastrous January 2001 pension resolution allowing elected and appointed officials to retire after 12 years, regardless of age, and after Tom Marshall said that this was a really good ordinance which would help to get and retain good people, Roland immediately retired under the resolution. He started to receive his pension immediately and went to work for the Memphis City Schools at a salary of over $100,000.

• The next I heard, he was involved in the following boondoogle at the Memphis City Schools where he was involved in the School Trans contract which is shown below.

The internal audit found that John Britt left the board out of the loop when he increased SchoolTrans Inc.'s contract by $4.5 million in September 2002.”

We investigated and got a copy of the Internal Audit Report mentioned above. Here are some of the pertinent facts.

• In 2001-02 Memphis City Schools (MCS) began using SchoolTrans for medically fragile students because Laidlaw did not have air conditioned buses.

• In July 2002, Mr. Roland McElrath (as mentioned above he resigned from the City and took a job with the MCS and also took with him a $32,000 immediate pension under the January 2001 pension resolution) negotiated a two year contract with School Trans along with Mr. John Britt of MCS. All buses by SchoolTrans were to be air conditioned and were to have basic medical staff in transit. Ten exceptional children were assigned to six buses at a contract amount of $652,428.

• 34 days after the original contract was signed, Mr. Britt signed Addendum #2 which was written by Mr. Michael Jones of SchoolTrans and signed by both him and Mr. Britt but was not brought before the board as was previously agreed. This addendum specified that SchoolTrans had been directed to transport additional Specialized Exceptional Students increasing the minimum July 1, 2002 agreement by 15 additional buses. In addition, as also requested by MCS, SchoolTrans would be responsible for hiring nursing staff for all students requiring nursing at no more than $42.50 per hour (2 hour minimum) per bus per day. The terms of Addendum 2 would increase the benchmark amount of the original contract by $4,569,539.

• Finding #1- Clearly, Addendum #2 required Board approval but it did not get its approval. Addendum #2 was invalid.

• Finding #2- In February 2003, SchoolTrans was operating nine bus routes and carrying 21 students. On 2-16-03 SchoolTrans began invoicing the District for 21 buses and 21 CNA’s (Certified Nursing Assistants) per the agreement set forth in Addendum #2 which was never brought before the School board for approval. During an interview with Mr. Jones on 12-8-04, he was asked why MCS was being charged for routes not being operated. He stated SchoolTrans was contracted by buses, not routes. Mr. Jones contended that Addendum #2 gave SchoolTrans the authority to make buses available. He stated that SchoolTrans always billed by the benchmark number of the contract which he maintains was increases to 21 by Addendum #2.

• According to the Audit, MCS should request $529,703 from SchoolTrans for buses charged but not actually operated and for all CNAs charges but not supplied since February 2003.

• The cost per child was $207 a day in 2002-03. In 2004 the cost had dropped to $115 per day.

According to the contract, the District was to conduct a survey at the end of each school year to evaluate the services provided by SchoolTrans. If the survey resulted in an approval rating of 95% or greater, the District would award $10,000 to SchoolTrans. Guess what? They did their own survey and billed for $20,000 and got paid. According to SchoolTrans, they did not maintain copies of the surveys. The MSC is requesting the return of the $20,000.

The other story that is appropriate is the MGT report which was a $500,000 study done for the Memphis School System to report on possible savings and to report on things that went wrong and things that they were doing right. Shown attached is the report showing that for new construction and renovations projects, the budget overruns amounted to $81 million dollars. Happy Halloween.

Click here to see how $82 million of our tax dollars got wasted on school projects

Sunday, October 28, 2007

October 29, 2007

Equal Opportunity Bribery

The election is not yet completed and already politicians are trying to change and ethics standards and to weaken the open meeting and open records laws. Examples are the Shelby County Commission and the state legislature. Congratulations should be given to the Commercial Appeal for calling to our attention the actions of State Representative Ulysses Jones (Memphis) who wants to change the open meeting law to allow the secret meetings of less than a quorum. This would allow special deals to be worked out in secret (e.g. you vote for my bill and I will vote for your bill regardless of the merits). Also the CA pointed out the recent changes in the already worthless County ethics standard sponsored by Democratic Commissioner Sidney Chism and passed by the County Commission. This will allow things like free football and basketball tickets as long as they all get free tickets (equal opportunity bribery).

I like full and open discussions at public meeting with all the records posted on the website of the City or the County. But if the politicians want to propose something in advance of the meeting, I would suggest that they put the proposal in writing by email and send it to all of the other members of their political body with a copy to the news media plus a copy on the official website of the City or the County. Then the recipients of the email could respond with the same open record requirements. However, one on one meeting and telephone conversations about such deals are illegal and should remain so.

I would remind the readers of the natural tendency of politicians to restrict the public from their decision making and their freedom to wheel and deal without oversight. Please do not forget the change in state law in the 1990s which stated the following concerning the County Charter provisions allowing citizen petitions such as the one for term limits for the county.

Editor's note: The Charter, § 5.05C., which states "at least 15 percent of the persons who voted in the last gubernatorial election" is superseded by the state law, T.C.A. § 2-5-151(d) which states "at least fifteen percent (15%) of those registered to vote in the ...county."

In other words, the politicians did not like the fact that it took two few signatures (too few in their opinion) to get the term limit item on the ballot. Therefore they raised the bar to make it more difficult for the voters to mess in their business. All they want is for the taxpayers to pay their taxes and shut up.

Monday, October 22, 2007

October 22, 2007

THE EARLY VOTING CYCLE

I recently was a candidate for the Memphis City Council (Super District 9, Position 2) and while I did not win, I ran well and finished third in a field of six getting 20% of the vote.

After the election I talked with many of the other candidates for the various smaller districts and the super districts and there seems to be general agreement that the extended two week period of early voting is a bad idea that greatly increases the cost of campaigning but does not increase the actual voting totals. Also, as happened this year, many people voted before certain information came out about some of the candidates.

Therefore I would propose that in the future, early voting occur two to three days immediately before the actual voting date. For instance this year the final date was Thursday, October 4, 2007. Early voting could have occurred on Monday and Tuesday and the final vote on Thursday. This would cut the cost of the election to the taxpayers and certainly cut the cost and the length of the campaign to those running.

While there is nothing that can be done about signs, they are an eyesore and a distraction that takes away from the debate of ideas. Public television should be used to have a full and thorough debate between the various candidates giving them time to question each other and to display their ideas and their knowledge.

The election commission should reconsider the early voting cycle and change it to a shorter, more compact and less expensive model.

Joe Saino

Monday, October 15, 2007

October 15, 2007

THE ELECTION MUST BE OVER AND NOW HERE COMES THE BAD NEWS THAT THEY DID NOT WANT YOU TO KNOW BEFORE YOU VOTED!!!

It is interesting that during the recent election, I repeatedly said that the City and the MLGW were planning tax and rate increases but they would not tell the voters about them until after the election.

Well the post election reports are beginning as the recent article in the Commercial Appeal reported. They want a gas rate increase and a water increase but they are softening it with an electric rate decrease. About time.

The recent article says that the gas division is losing money again and the reason for the increase is that state law says that if you lose money in a division for three years running, you cannot borrow money with three consecutive years of net income losses.

First, it is hard to see how the MLGW, which is a monopoly, can lose money when they can charge whatever they want with their rate structure that includes a PGA (purchased gas adjustment). However, they have managed to do that in 2006 to the tune of $12 million dollars. Apparently they are losing money in 2007 but we have to take their word for that as they have monthly statements that show that but they do not publish them on their website. Also they do not publish their budgets on their website. The monthly statements and the budgets should be published immediately.

Moreover, as of the end of 2006 they showed total current assets for all three division of $675 million and total current liabilities of $369 million, an excess of $306 million. In the electric division, this excess is $197 million, in the gas division it is $70 million and in the water division it is $39 million. State law and the Memphis Charter are clear that the following statement should be implemented.

“Any surplus thereafter remaining over and above safe operating margins, shall be devoted solely to rate reduction.”

No one believes the MLGW that the net monthly increase will be only $3.26 x 420,000 customers x 12 months = $16.4 million.

Over and above the MLGW is the issue of GASB 43/45 (Government Accounting Standards Board) rules which calls on the MLGW, the City of Memphis and Shelby County Government to account for the unfunded liability of the retirees’ health care and life insurance costs. So far, the City, County and the MLGW have been paying only the annual costs and the unfunded costs are many millions more. The County has already said that it will add 22 cents to the property tax rate. The City and the MLGW have not said yet how they will fund this. There are three choices. 1) Raise taxes, 2) Cut benefits for retirees and 3) do nothing and see their bond ratings lowered.

However, there is a fourth choice and that is to cut wasteful and unneeded spending, cut expenses and cut expenditures to cronies and friends of the politicians. This is what the newly elected city council members promised. Will they follow through?

Tuesday, October 09, 2007

October 9, 2007

WHO GAVE TO HERENTON AND HOW DID HE SPEND HIS CAMPAIGN MONEY!!!

Welcome to 4 more years of Willieworld. For the readers edification and education, I have published who gave to the Mayor and how did he spend his money for his recent election.

Take a look at who gave to him. Also note that Reginald French got $10,000 as a campaign consultant.

Click here to see who gave and who received Herenton's campaign money

Wednesday, October 03, 2007

October 3, 2007

MORE BIG SPENDING FOR THIS $30,000 JOB

The spending figure for 9-2 was $371,940.84 up to September 24. The figure for 9-3 was $325,161.07.

Lit spent $128,163.34 and he put in $90,723.75 of his own money. He raised $53,568.52.

Hedgepeth spent $112,107.01 and he put in $4,459.21 of his own money and Gene Gibson Jr. loaned him $8000. He raised $116,226.30.

Desi Franklin spent $60,311.31 and raised $58,324.00. She loaned her campaign $5000 and got a $4095.78 loan from Jeff Warren for School Board campaign.

Mary Wilder spent $24,579.41 and raised $11775.00. She loaned her campaign $30,000. Mary's copies were so light that I could not make copies so I just put the first recap page in the attached pdf file.

Brian Stephens (Dist 2) spent $41,536.77 and raised $46,985.25.

Scott Pearce (Dist 2) spent $37,917.89 and raised $12,825.00 and had loans of $27,000.

Bill Morrison (Dist 1) spent $17,367.50 and raised $29,760.00.

Scott McCormick who really did not have to do anything as he had no effective competition raised $27,450.00 including money from Robert Spence Jr., $5000 from ABC-ED PAC, $3000 from Federal Express PAC, $2000 from Build PAC, $2000 from MMHLAPAC, $1500 from M-PACE, $1000 from IREW Educational Committee, $1000 from TN Realtors PAC and $1000 from West Tn Chapter of Associationed Builders and Contractors PAC.

Regards, Joe Saino

P.S. By the way, I promised to donate my City Council salary to MIFA should I win.


Click here to see how much these people have spent to get this $30,000/year job and who gave them the money

Monday, October 01, 2007

October 1, 2007

WHY WOULD GROWN MEN (OR WOMEN) SPEND $500,000 FOR A $30,000 CITY COUNCIL JOB? THERE HAS TO BE A BETTER WAY TO GET GOOD PEOPLE TO MANAGE THIS MESS!!!

$371,940.84 has been spent as of September 24, 2007. We are well on the way to 1/2 million dollars for a $30,000/year job. Does it make you wonder? Is it all for good government? One candidate loaned himself $170,000. Another got a $1000 contribution from John Elkington who has not paid one cent to the City of Memphis on Beale Street contracts since 1986. Mmmmm. Take a look at the reports.

Click here to see the Shea Flinn report and his $170,000 loan to his campaign

Click here to see the Kemp Conrad report with all the usual assortment of special interest contributions and the $1000 contribution from John Elkington and the $250 contribution from Dorchelle Spence of the Riverfront Development Corporation

Click here to see the Frank Langston report

Click here to see the Joe Baier report

Click here to see the Joe Saino report