Memphis leaders debate spending
Priorities differ between mayor, council members
The Memphis City Council and Memphis Mayor Jim Strickland’s administration have competing priorities for the city’s one-time windfall of federal stimulus dollars.
The debate over how the money should be spent dominated hours of the council’s meeting on Tuesday, first in committee and then during its regular session. The Strickland administration, because it runs the city, are the ones with the money, but they don’t have the power to spend it.
The city council has budgeting power and its members have their own, myriad priorities for the unprecedented money Memphis is getting under the American Rescue Plan Act. The city got $161 million. After $16 million in bonus pay to city employees, $1 million to Collins Chapel Connection Hospital and $3 million to Regional One, there’s about $140 million left to spend.
It’s up to the Strickland administration to find enough allies for its priorities so that the council doesn’t wholly rewrite the funding script.
Funding dominates meeting, no solution found
The fight centers on whether the Strickland administration’s priorities — shoring up some special revenue funds that were hit by the pandemic, broadband and further funding for the Memphis Police Department. Here’s a
list of the administration’s priorities:
• $39.4 million for revenue replacement
• $5 million for city construction costs
• $5 million for city-owned assets such as Autozone Park and the Memphis Museum of Arts and Science
• $6 million in technology for the Memphis Police Department
• $12 million for recruitment incentives
• $6.6 million for an MPD take-home car program
• $20 million for broadband expansion
Some on the council would like to see further investment in education and money for combatting food insecurity.
h $6.75 million for Communities in Schools (funded by revenue replacement)
h $3.78 million for Equity to Prosperity (funded by revenue replacement)
h $3 million for a grocery store initiative in District 7
h $4.68 million homelessness (funded from broadband line-item)
h $5 million emergency relief program (funded from revenue replacement)
h $3 million for an artist emergency fund.
The council’s amendments to the ARPA funding plans have caused consternation among the Strickland administration. The city has budgeted $38 million as revenue replacement for certain special revenue funds. If it does not use that money (or doesn’t use all of it) for revenue replacement, it would have to make up the funding gap using the city’s fund balance — a savings account.
Administration says bond rating at risk
The city already plans to spend $23 million from that aforementioned fund balance to make up a shortfall in this year’s budget. And spending down the fund balance is not without consequences.
In May, Shirley Ford, the city’s CFO, said spending $23 million from the fund balance would not impact the city’s credit rating or interest rates.
On Tuesday, faced with the council’s plan to cut $20 million from the $38 million in ARPA funding budgeted for revenue replacement, Ford sounded the alarm. She told the council that such a move could impact the city’s bond rating because the city could be required to spend more of its fund balance.
Ford’s disclosure prompted some consternation among the administration’s allies on the council, particularly Chairman Frank Colvett, Councilman Worth Morgan and Chase Carlisle.
Following Ford’s comments, Carlisle made a motion that would’ve split the remaining $140 million in funding into two buckets $120 million of mostly Strickland priorities and $20 million for the council to allocate later. With two members absent, that motion failed.
Then Carlisle made a motion to punt allocating the money until Sept. 21. That motion passed, the council zipped through its remaining agenda and then recessed its meeting — a procedural step that allows the council to resume and tackle the funding again.
That motion passed, ending the discussion of how Memphis should spend the money. At least for a few days.
There’s a compromise in there, somewhere. Maybe.
In interviews Tuesday evening, two members on opposite sides of the funding debate appeared to signal the huddled conversations and events of the past few hours were headed towards a compromise — at least on the $38 million in revenue replacement.
“It’s hard to argue with revenue replacement,” Councilwoman Michalyn Easter-thomas said during an interview Tuesday as some of her colleagues still huddled on the council dais.
Colvett, the chairman, said he was hearing some “baseline agreements” among members of the council. He said the money for replacement “feels sacred now.”
The chairman pushed for a resumption of the meeting in short order to cement the compromise.
“It’s going to require our council members’ ideas and council members to compromise with other council members on those ideas to make it all work,” Colvett said.
Easter-thomas’ comments also hinted at where there could still be friction — the federal cash Memphis wants to spend on police bonuses, relocation incentives and take-home cars.
“I still don’t understand how takehome cars and bonuses and incentives are helping individuals directly in our communities. There is still no direct line and administration hasn’t been able to show me,” Easter-thomas said.
As Easter-thomas spoke,a few remaining members huddled together. Their words were muffled, but they nodded intently as they sat or stood inches apart, masks on or off depending on the member.
The negotiations underway Tuesday likely stretched the limits of Tennessee’s Sunshine law.
Samuel Hardiman covers Memphis city government and politics for The Commercial Appeal. He can be reached by email at samuel.hardiman@commercialappeal.com or followed on Twitter at @samhardiman.
“It’s going to require our council members’ ideas and council members to compromise with other council members on those ideas to make it all work.”
Frank Colvett
Memphis City Council Chairman