More red-light cameras in proposed Memphis budget

April 20--If the Memphis City Council approves Mayor A C Wharton's proposed budget, the city would install 30 new red-light cameras to catch traffic violations at intersections.

The city has operated such cameras for several years, but is considering expanding the program as part of a broader effort to boost collection of fines and fees.

That's one of the notable items that got relatively little attention when the mayor presented his $596.8 million spending plan for the next fiscal year to the City Council last Tuesday. Wharton focused on the big picture: He's calling for what he described as painful but necessary cuts in retirement and health benefits. The administration plans to use the savings from those cuts to increase contributions to the city's underfunded pension plan.

However, the administration's 408-page proposed budget plan contains many other details that could touch thousands of lives in the fiscal year that starts July 1. Here are some of them:

Health insurance premiums could rise. Wharton's administration spoke in favor of ending a city health-care subsidy for many retirees and for reducing health-care benefits for current employees, including boosting a surcharge for smokers from $50 a month to $120 a month.

But a note on page 15 of the budget document hints that even more pain could be on the way for employees and retirees: "Healthcare premiums are expected to increase in (fiscal year) 2015." City finance director Brian Collins said health-care costs are rising. Because the city is self-insured, it has direct responsibility for claims.

Collins said the mayor's administration asked the City Council last year to increase premiums, but the council didn't, and now the city needs a bigger increase in premiums to make up for it.

City Council Chairman Jim Strickland said he remembers last year's request to increase the premiums. "But there was little to no documentation to prove or show how much they should be increased, and they did not have that at the time we voted on the budget," he said.

The city's actuaries are still determining what the new health-insurance rates should be, said Quintin Robinson, city Human Resources director. For many retirees, the premium increase would go on top of another cost increase. Currently, the city pays a subsidy of 70 percent of the health-care premium and the employee pays 30 percent. The city has proposed moving retirees eligible for other insurance to an "access only" plan, meaning that they could stay on the city health insurance but would have to pay the entire premium. Retirees are speaking out strongly against the plan.

Debt service payments would rise. The proposed budget also dedicates much more money to paying off old debt borrowed to pay for various construction projects and purchases of equipment.

Of the property-tax rate of 3.40 per $100 of assessed value, $1.11 would go toward paying off debts. That's about 20 cents more than last year, or roughly $20 million, and the property tax flowing into the general fund is dropping by the same amount. The general fund pays for core services such as police and fire protection.

"Over the next couple of years, even though our total debt is actually flat to slightly declining, the way it's structured is our debt payments on that debt are going up," Collins said.

As of June 30, the city's bonded debt totaled $2.2 billion, of which $1.3 billion was backed with the full faith and credit of the government.

Some projects would get additional funding. The proposed capital improvement budget, which is separate from the general fund budget, includes $24 million in funding to purchase the dilapidated Raleigh Springs Mall and turn it into a center that combines retail and government services such as a new library and a community center.

In November, the City Council approved a $7.6 million expenditure to place a new police traffic precinct at the mall -- the money had previously been budgeted to build the precinct nearby.

Wharton's administration also proposes boosting its contribution to Memphis Area Transit Authority by about $2 million, to $22.2 million.

A grant of $250,000 would go to the Memphis Rock 'n' Soul Museum, which has asked for $500,000 to build a music hall of fame on Beale Street.

An additional $1 million would go to the National Civil Rights Museum.

The budget debate continues on April 29 with several hours of scheduled department-specific hearings. Discussions are likely to last until June.

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