Thursday, February 19, 2009


The 10th season of the Memphis Grizzlies begins in the fall of 2010 which is under two years from now. What is significant about this fact? Well, I have attached the complete Memphis Arena Use and Operating Agreement between Memphis and Shelby County and Hoops, L.P.

The Mayor told the citizens of Memphis and Shelby County that he had to sign the agreement and that it was a good deal for Memphis because the Grizzlies (Hoops L.P.) had agreed to pay all operating expenses as expressed in the section 7(b) (page 19 of 53) of the operating agreement.

This section says: (b) Operating Expenses. In addition to the rent (rent consists of $1.15 per ticket, no ticket sales, no rent) required to be paid by HOOPS, HOOPS shall be responsible during the entire Term for all costs and expenses of every kind and nature related to the use, occupancy, possession and operation of the Arena Complex, including without limitation all operating loses. In addition, HOOPS shall be obligated to reimburse CITY/COUNTY in the amount of any deductible related to insurance coverage maintained by CITY/COUNTY in accordance with Section 9(a)(i) hereof.

However the hooker here is the next section, Section 8, Arena Repairs and Maintenance (page 19 of 53) Section (a) states that during the term of the agreement, the City and County will be responsible for and, at its cost shall make all Capital Repairs as shown in Exhibit B (pages 48 and 49 of 53). In other words, the big ticket items are to be paid by the tax payers, not HOOPS. HOOPS is responsible for (1) making all minor repairs, (2) undertake normal and routine maintenance, (3) provide adequately trained janitorial, maintenance and support staff and keep the Arena in a safe, uncluttered, clean, sanitary and sightly condition and (4) provide security for the Arena Complex 24 hours a day, 365 days a year. In addition the City and County have to pay for all fire insurance policies and other perils.

And for this, we gave up the right to have events in the unpaid for Pyramid and the Coliseum. [See section 21, 29 and 30(b), pages 34 of 53, 37 of 53 and 38 of 53]. Also HOOPS has a way to get out of the agreement if Memphians do not buy enough seats under Section 31(page 40 of 53), EARLY TERMINATION RELATING TO SHORTFALLS.

This terrible, stupid agreement was signed by Mayor Herenton and Mayor Rout on June 29, 2001. Mr. Heisley has stripped the investment of the well meaning local Memphis investors of their equity. No one ever accused Mr. Heisley of being dumb like our two Mayors.

Click here to see the full arena operating agreement which has cost us so much

Monday, February 16, 2009


With almost $800 billion dollars of bailout funds just voted by Washington politicians, it is easy to understand why the local media continues to not report on our local and state politicians who have made promises to public employees about retiree health care and retiree life insurance which they have no intention of funding for the long term. $3.63 billion is pin money in this absurd spending world.

A local Memphis School Board member asked me recently why I did not report on the unfunded OPEB (Other Post Employment Benefits) figure of the Shelby County School System. I did then ask them for this information and they promptly reported that their unfunded OPEB liability was $548 million bringing the total of the unfunded OPEB liability to $3.63 billion dollars for the City of Memphis, the Memphis School System, the Shelby County government, the MLGW and the Shelby County School System.

This got me to thinking about the rest of the state of Tennessee and I wonder what the total is for the entire state of Tennessee and then for the entire country. Add in Medicare, Social Security, the coming universal health care, etc. etc. etc. and you have to conclude that there is no promise that politicians will not make as long as long as you keep voting them into office.

In case you don’t remember, the local $3.63 billion dollar problem has been caused by local politicians promising to pay 70 to 75% of retirees’ health care cost without putting the money aside to pay for it in the long term. We must solve this problem by cutting this promise by 5% a year for the next 14 years so that the retirees can prepare their lives for other medical insurance. To continue to ignore this problem is unconscionable.

I have attached a file showing the relevant pages from the five actuarial reports with the unfunded figure shown. Also I have attached the five full actuarial reports.

City of Memphis $823,000,000
MLGW $709,000,000
Shelby County $353,000,000
Memphis City Schools $1,250,000,000
Shelby County Schools 548,000,000

Total $3,683,000,000

Click here to see the relevent pages from the complete OPEB reports shown below

Click here to see the OPEB actuarial report for the Memphis City Schools

Click here to see the OPEB actuarial report for Shelby County

Click here to see the OPEB presentation for the City of Memphis

Click here to see the OPEB actuarial report for the Shelby County Schools

Click here to see the OPEB actuarial report for the MLGW

Wednesday, February 11, 2009


I have noticed one immutable fact about government. When times are good and there is plenty of tax money, they expand government jobs. When times are bad and tax money is nonexistent, they claim that more government jobs are needed to solve the financial problem. And once the problem goes away, through no government action that I can discern, the new government jobs never go away.

I have been investigating two local government bureaucracies through open records requests. They are the Memphis City Schools (MCS) and the Shelby County Schools (SCS). I first asked for a list of job titles, number of employees, salaries and benefits. I had to finally sue the MCS in order to get the information which was 1334 sheets which undoubtedly came from an electronic spreadsheet which they refused to furnish. The SCS furnished the information in electronic format. I have attached several files showing a recap of the information I received. Here is my initial take on this information.

• There seems to be an overabundance of custodial helpers (1017) in the MCS system. I do not find this in the SCS system.
• There seems to be a lot of maintenance people in the MCS system (electricians, carpenters, sheet metal workers, etc). It seems to me that this work could be contracted out on an as needed hourly basis.
• There seems to be a wide range of salaries with the same job titles. e.g. in the SCS system, elementary teachers range from $100,000 down to the $40,000 range. There is a similar range at the MCS system.
• I find no reference to the MCS nutrition center workers although they may be in the list I got. The past scandal there requires further information which I am investigating.

The files that I have attached include the MCS salary schedule organized by job titles a to z with salary ranges and number of people in each job title designation. Also the MCS salary schedule high to low but not including Dr. Kriner Cash who makes over $250,000. Also I included 12 sample pages from the 1334 pages of information I received from the MCS system. On page 3 of 12 your will see the Chief Contracting Officer, Sybille Nobile at $145,000 salary plus benefits.

For the SCS system I included a pdf version of the spreadsheet they sent organized by salaries high to low and another by job titles a to z. Finally a file that shows the number of job titles in the Shelby County School system.
I know this is lot of information but the Memphis City Council and the Shelby County Commission need to analyze these two systems and figure out a way to reduce cost and make them more efficient without hurting the students. More money thrown at the system is not the answer. The answer is opening up the system to competition from private systems such as the Catholic Jubilee schools, voucher and charter schools and reform of the present two systems. More money thrown from Washington is still your tax money.

Click here to see the MCS salary schedule and job titles a to z

Click here to see the MCS slary schedule high to low

Click here to see some sample pages from the 1134 pages of the Memphis City School
job titles and salary and benefit schedule

Click here to see the SCS high to low salary and benefit schedule

Click here to see the SCS job titles and benefits listed alphabetically

Click here to see number of each titled job at the SCS system

Thursday, February 05, 2009


There is a good contrast between the City and the County on workforce reductions. I have attached two items that will be introduced in the Shelby County budget committee agenda today. It is a proposal for workforce reduction of 8.4% for the county producing a savings of $58,341 per position for a total savings of over $20 million dollars. Contrast this with the Mayor Herenton’s proposal of 100 buyouts at $70,164 per position which is shown in the third attachment. This is a reduction of 1.5% and produces no immediate savings. The City needs to match the County’s serious proposal and reduce the City employee roll by 8.4% or 530 positions and save up to $30 million dollars. We need serious reductions now to match what the County is doing and to help the taxpayers who are already tightening their belts.

Click here to see Mike Ritz's proposal for real immediate reduction in Shelby County's workforce

Click here to see the current workforce count for the County

Click here to see the high cost, low layoff plan from Mayor Herenton for the City