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Mayor probes future with TSD

TSD’s President and Publisher, Bernal E. Smith II, met with Memphis Mayor A C Wharton in City Hall. The New Tri-State Defender is endeavoring to inform readers about the plans, thoughts and actions of our elected and appointed officials through conversations with city and county leaders. One of the goals is to provoke dialogue and to initiate an ongoing conversation between leaders, readers and the community at-large.

Last week, TSD’s President and Publisher, Bernal E. Smith II, met with Memphis Mayor A C Wharton in City Hall. This is the first of two installments.  

Why not tap the ‘Saving Account?’

Bernal E. Smith II: Obviously, at this point, the requirement of the City to fund MCS is not a question of if, but of how and when.  If you are confident that the revenues from tax collections are going to come in adequately enough to provide the funding in a few months, why not go into the “savings account”, the city reserves and fund MCS and replace those as the taxes are collected?

 Memphis has stepped closer to becoming a model city but has to broaden approaches and connect all the stakeholders around a more comprehensive process of life-long learning, said Mayor A C Wharton. (Photo by Warren Roseborough)

Mayor A C Wharton:
  There are a number of reasons for why that isn’t a viable option.  First, the standards by which our creditworthiness is determined require that you keep 10-12 percent of your annual operating budget in reserves.  We are at $76 million now.  If we were to say MCS, here is your $55 million – that would take us down to about $20 million.  What that does is put you…your bonds become what’s known as junk bonds.  The City’s creditworthiness would be rocky, in horrible shape, if we took a plunge like that.  When it comes to issuing any kind of bonds for job creation or building a police station or anything else, it would be extremely more expensive – if we could borrow at all.  More importantly, once we took a hit like that as a City, it’s virtually impossible to pull (our credit rating) back up.  Secondly, in this day of natural catastrophes, we never know what might hit this town.  Twenty million dollars wouldn’t take us but maybe a couple of weeks.  What if the floods had gotten worse? Putting the City in such a position is something you simply do not do!  Thirdly, MCS has multiple cash streams and reserves that are much more handsome than the City’s reserves.  And the fourth reason is the City government under state law was never meant to be a guarantor of the payments to the school system.  Our job under the law is to take a portion of the tax rate and allocate it to school system, which is exactly what we do.  As the money comes in we send it to them and that’s what we’re going to do.

Taking the child hostage:

B.E. Smith:  This is an election year; you are running for re-election. There are some that say a lack of a swift resolution to this matter doesn’t bode well for you and City Council members politically.  There are 16,000 employees at MCS and the parents of 105,000 students . . . There is an obvious impact to the well-being of families but also a potential backlash – politically– in how they express that impact at the polls in October.  How do you consider that relative to how you make decisions in this matter, or is it even a factor?

Mayor Wharton:  This is like a hostage situation.  When someone calls you and tells you that they have your child and they are demanding a ransom, it is going to anger you, you think about what you are going to do when you get your child back! I looked at this like a hostage situation.  I went on national television and I said this is not the time to talk about the political meaning or consequences of this.  I said let’s get the children into a secure place first, and then evaluate what this was about or not about.  The child has not been released yet.  We have a promise and a potential resolution on the table.  School board Chairman Martavius Jones and I have met and talked and have come to an understanding about what needs to happen.  Once we get the final resolution then we will have plenty of time to evaluate the political implications, fallout or growth from this situation.  Ultimately, it will not be said that schools could not start because of the City of Memphis.

Maintaining payments

B.E. Smith:  There’s the short-term issue of the needs this year and getting a plan in place.  Are you confident that we can get a plan in place that allows the City of Memphis to make timely payments over a period of time?  Secondly, relative to the whole issue of maintenance of effort and removing the consolidation issue, long term, do you see the City being able to meet the maintenance of effort requirements to MCS?

Mayor Wharton:  Yes.  The funds are generated from payment of property taxes.  The economy will improve as we move forward and collections will improve.  And even when funds come up short from collections, due to delinquencies, there are processes in place to make sure that they are whole.  It doesn’t matter when the taxes are collected we make sure that the portion that should have gone to MCS goes to them.  There are always a certain amount of the people that become delinquent in their taxes, but 99 percent of the taxes levied are collected even if it is over a two- or three-year-period. The difficulty comes in when we collect less that what was levied.  We are so strained financially that we can’t fund or front uncollected short-falls to MCS when we are asking employees to take a 4.6 percent pay cut, when we’re laying people off, when we can’t clean up the city and cut vacant lots.

What the public hasn’t heard is that we’ve also had to delay the start of a new police class and a new class of fire fighters in the fire department so public safety is also impacted. Obviously, there is a balancing act here. It’s not as if we are up here tucking money away and giving raises. City employees have had no raises for several years with the highest compensated taking pay cuts before the recent across the board pay cuts that we made.  Has that happen at MCS?  No, it has not.  They’ve laid off some people but so have we.  The bottom line is that we will meet our obligations but over time some changes will have to occur.

Education vs. schooling

Mayor Wharton:  Sometimes people confuse schooling and education.  Schooling is what takes place in a red brick building from 8 a.m. to 2:30 p.m. for about nine months of the year.  Education is a 24/7 year-round endeavor.  When you look at the most successful cities the focus is on education.  I fervently believe, even if a court was to say, “City of Memphis, you don’t have to pay any money to MCS,” that city government has a moral obligation to play a major role in the broader educational process.  Meaning, as I did, in county government investing in early childhood education.  I think the City of Memphis could take half the $78 million dollars that we are now giving to MCS as an institution and plow it into early childhood education including support of family issues such as job readiness, rehabilitation, literacy, health care, etc.  Every child would have access to an accredited day-care center, no more leaving the babies with sister’s crack-head boyfriend.  If we just took half or a third of that money, just think what it would do to set a new generation on stronger educational path.

B.E. Smith:  I agree that there is a difference between education and schooling, but we are having significant challenges in our community relative to them both.  There needs to be bold leadership brought forth not just to resolve this funding issue but to improve public education overall.  These challenges impact the political processes and people’s level of participation; it impacts poverty levels, business growth, and ultimately challenges you, as an ambassador of the City, going around the world, attempting to recruit new businesses here. To the degree that we don’t have people educationally prepared to handle new job opportunities, we suffer as a community.  How do we get pass all the political wrangling to real leadership that focuses broadly on improving education from birth to post-secondary opportunities for the citizens of this community and, particularly, for African Americans?

Putting people first

Mayor Wharton:  Under the Memphis Tomorrow partnership we are supporting the People’s First Initiative.  It’s a process of bringing together all those stakeholders/contributors and covers the development of our citizens from birth, to being on a job, to taking care of their own family. We have one of the lowest enrollments rates in Head Start relative to the number of children that are eligible. Every child ought to have a good Head Start experience or the equivalent.  All of this is called for in the People’s First Initiative from cradle to job.  So this process starts actually with the moms’ before birth to support proper brain development even in the womb.  The mistake that we’ve made is that we’re too agency oriented and not focused on the universal responsibility of the entire community to make sure our children are nurtured with the best opportunities for success.  The key thing that’s been missing is someone taking the leadership role of pulling all of that together.  

B.E. Smith:  Well, that’s my original question, where does that bold leadership come from? Does it come from the Mayor’s office?

Mayor Wharton:  I will gladly take it.  Since I answer to all the people, I will be glad to take that role.  Our most important product is education.  During my tenure in Shelby County, I set up the Ready, Set, Grow program.  As a result of that program, we got 32 day-care centers fully accredited through the National Association for the Education of Young Children.  One of the reasons I sought to secure the Bloomberg funding was to focus on the development of people and talent.  If I had to redesign city government I would have a Deputy Mayor for Safety, Deputy Mayor for Education, not Schools but Education. So, yes, I accept that top leadership position, not to become another school superintendent.  I am referring to things much broader than schools.  If the judge were to say you no longer have the responsibility to fund schools, then we’d have the leverage to utilize those funds in other areas for the broader education of our children.  We could then become a model city for urban education.

B.E. Smith:  I think we’ve already made some steps toward becoming that model city but I agree we have to broaden our approaches and connect all the stakeholders around a more comprehensive process of life-long learning.  You reference another expected ruling or judges rendering on the school funding issues.  In many circles around the community it’s understood that the final rulings haves been rendered and it has been decided that the city owes the money to MCS.  Obviously, your understanding is somewhat different than that.  Is there another ruling expected?  Is there another appeal out there that is pending?

Mayor Wharton:  If you will recall, I took office on October 26th, around December 15th I went before the City Council and said let’s pay this money and let’s raise taxes to do it.  Folks said I was crazy.  I thought I was right then; I think I am right now.  Unfortunately, the way our government is set up, the counter claims that were filed in the lawsuit were led by the City Council.  They were sued, they have there own attorneys and they filed counter claims in response to MCS’ claims.  They have rejected the efforts to collect.  I don’t have the authority, to say, dismiss the City Council’s counterclaim…. I am optimistic that we will get to settlement based on what we have worked out, but it will be in the hands of the City Council.  

NEXT WEEK: The discussion deals with tax increases, efficiency in city government, alternative revenue sources/occupational privilege tax, sanitation workers and the potential for privatization, African-American business development and wealth creation, and the status of the Pyramid, Beale St. and the Animal Shelter.)

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