Thank you, Chairman Swearengen and members of the Council. Each year at this time, we come to you to present our operating budget for the coming year. Historically, and especially the last two fiscal years, we have been faced with very difficult financial choices.
While this year we still face difficult decisions, I am very proud to say we are in good financial shape. This is in large part due to your cooperation and collaboration through the years. I want to thank you, and I am eager to share some highlights of the FY2023 proposed budget with you today.
As always, I am grateful for your willingness to work with us and for your partnership as they will both be invaluable as we continue to move our city forward.
Today, I am presenting to you an operating budget of a little more than $750 million. The increase in this year’s budget is largely attributed to increased revenues from the 2019 public safety referendum coupled with a significant increase in online and local sales taxes, as well as, a return to more “normalized” post pandemic operations.
Before I get too far, I want to call your attention to the title of this speech, “A Budget of Renewal”.
It was given that name because with this budget city employees will be renewed with an increase in pay for their diligent service to our community; in concert with our Accelerate Memphis projects, city assets will continue to receive much needed funding for improved community use; and our city streets will be renewed with more money allocated to paving and to fight against illegal dumping.
I titled the speech the way I did because we are in a time of renewal and reinvestment in our city—the likes of which we have not seen in recent history.
With these thoughts in mind, I will summarize a few points as I present our budgets to you:
1.) A significant investment in City employees, particularly our public safety employees
2.) Tackling the blight of illegal dumping
3.) A dedicated funding source to MATA
4.) Highlights on my proposed CIP budget and One-time investments
1.) A significant investment in City employees, particularly our public safety employees
Each year, we are faced with the difficult choice of determining whether or not our revenues will allow for raises for city employees. Well, I am happy to tell you today this budget completes the six percent increase for firefighters (three percent last year and three percent this year), starts a 10 percent pay increase for police officers (five percent this year and five percent next year), and last but certainly not least, a much-needed two percent pay increase for general employees and a one percent Cost of Living increase for our retirees.
As hopefully you know by now, growing and sustaining our public safety workforce has and continues to be one of this administration’s top priorities. If we are going to get a handle on our decades-old challenge with violent crime, we must have a qualified and fully staffed police department to do so.
This budget also provides a significant boost to our public safety retention program. It expands the current yearly program to a five-year program, and allows public safety employees to choose the duration of their contract.
Simply put, for every one year our police officers and firefighters elect to stay with us, they will receive a 9% annual bonus payment up to five years.
This is a significant milestone, and one I am pleased that we are in a position to offer.
2.) Tackling blight caused by illegal dumping
For years, illegal dumping has been a constant source of frustration and a difficult challenge to manage as there was no specific team dedicated on a daily basis to fighting it. With this proposed budget, that will no longer be the case.
To continue our work of improving service delivery to the level at which our citizens deserve, this budget adds a dedicated unit of 17 staff members and equipment to our environmental enforcement department. This group will be tasked to focus exclusively on cleaning up illegal dumping sites that plague our city—a task that historically has caused us to pull solid waste employees away from our curbside trash collection efforts.
This newly formed, dedicated team to fight illegal dumping will provide a faster response to constituent complaints and a much-needed resource for neighbors and neighborhoods forced to deal with this challenge.
3.) A dedicated funding source to MATA
A keystone for any large city is an efficient public transit system. When I took office in 2016, funding for MATA was a little more than $23 million. We knew this was insufficient. Over four years and in partnership with city council, we increased this funding by 43 percent to almost $33 million in FY20. Then the pandemic hit and our revenues plummeted, and we were forced to temporarily lower our contribution by $10 million. Fortunately, MATA did not suffer financially as we were able to supplement that gap with federal funding over the last two years.
While we still have a way to go, this budget proposes funding for MATA restoring it back to pre-pandemic levels by adding $10 million worth of operating funds, and to go a step even further, it also, and for the very first time ever, establishes a dedicated transit fund. Most importantly, this dedicated funding stream will yield a permanent net increase to MATA’s operating budget by $4 million of funding in FY2023. This dedicated funding stream will grow to just around $11 million of additional revenue by FY2030.
This dedicated funding is proposed from expiring PILOTs. During the years of a PILOT, a company pays a reduced amount of taxes. When the PILOT expires, the business pays the full rate. These increased collections, subject to your approval, will comprise the new transit fund.
This funding will allow us to do our part to increase frequency of service and connect Memphians to the more than 10,000 unfilled jobs in our community.
4.) Highlights on proposed CIP budget and One-time investments
With respect to the capital improvement budget, over the last couple of years, we have proposed to you a budget that aligns with and supports our City’s capital needs for successful improved operations and continues to promote economic and community development.
For fiscal year 2023, I am proposing a CIP budget for general obligation bond support of roughly $95 million. We are continuing to maintain our focus on basic, core functions of City government—paving of roads, maintenance, necessary vehicles, and projects mandated by law.
For instance, in the last six years we have more than doubled the paving from the prior six years, and this year’s budget proposes to continue that pace.
This proposal also builds on the momentum of our Accelerate Memphis program by delivering a new Lester Community Center, a renovated Audubon Park Golf Course, and a new Mt. Moriah Police Precinct.
Furthermore, to accelerate the impact of our investment in MATA, we will also fund the local matching dollars necessary to get the Bus Rapid Transit program moving forward, thanks to a recently announced $46 million allocation for that program in President Biden’s budget this year.
Pre-K and Street Maintenance
I am also pleased to announce that because we have allocated a portion of our sales tax revenues dedicated for the purposes of street maintenance and Pre-K, our continued funding for Pre-K has been secured for years to come.
One-time Investments
Lastly, just a few months ago, Chief Financial Officer, Shirley Ford, closed the books on fiscal year 2021. Because of particularly strong retail sales during the last part the pandemic, we finished the year with revenues in excess of our expenses sufficient to increase our rainy-day fund and provide an opportunity for making additional investments in our City.
To put these excess funds to work for our citizens, I am proposing that we allocate and appropriate one-time excess revenues from the end of FY21 in the amount of $26 million to fund the following: the balance of the Harbor Docks project ($10 million), cost escalation for Accelerate Memphis projects ($10 million), an additional neighborhood splash pad and transform the former Davy Crockett golf course into the city’s first outdoor adventure park ($3.4 million), and to make an allocation of $2.6 million of funding for immediate capital improvements across our libraries, parks and community centers as the City Council so directs.
Members of the Council, while we still face many challenges in our city, as I said at the beginning of my remarks—we are in a time of renewal in Memphis. After two long years fighting the pandemic, we are finally seeing light at the end of the tunnel. Our economy is strong and new public and private investment is happening all around our city. Our employment numbers have all but fully recovered. Our tourism numbers, meaning people visiting and spending money in our city, is better than the national average.
And with this budget, we are keeping our foot on the pedal to keep that momentum going strong—all without a tax increase!
As we continue through this process, I look forward to working with all you to pass a budget that meets the needs of our citizens in a meaningful way and is fair to our employees.
Thank you again for your time today. May God bless you, and May God bless Memphis.
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