Tuesday, March 29, 2011

Mayor Says He and MCS' Cash Will Meet Again This Week on $57 Million Debt

Posted By on Tue, Mar 29, 2011 at 11:47 PM

Mayor A C Wharton at Tuesday press conference
  • JB
  • Mayor A C Wharton at Tuesday press conference
Although the public response from Memphis City Schools to his latest proposal for settling a $57 million debt dating from 2008 has been guarded at best, Memphis Mayor A C Wharton told reporters Tuesday afternoon that the City and MCS will “get around the table, and we’re not going to leave until we get it worked out.”

Wharton said his latest offer was in “good faith,” that he and MCS superintendent Kriner Cash were scheduled to meet again this Thursday, and that the relationship between the two was “still warm and positive.”

The new Wharton offer, contained in a supposedly “secret” letter to Cash dated March 25 and revealed by the news media this week, involves a trade whereby the city would complete payments on its annual $78 million obligation to MCS for the current year by mid-June if MCS would accept a five-year installment-plan arrangement for paying the reduced amount of $40.5 to discharge a $57 debt holdover from 2008.

The $57 figure is the court-ordered estimate of what was left unpaid to MCS under the state’s maintenance-of-effort formula in 2008 when a cash-strapped City Council gambled that county government would be held responsible as the appropriate body to make up the difference.

In his letter to Cash, Wharton proposed to deduct from the court-ordered $57 million the cost of what he said was $16.9 million in so far uncompensated services rendered to MCS by the City of Memphis. They included $12.5 for an “energy modification loan,” $2.4 million for a literacy program provided by the City, and $2 million for the costs of providing crossing guards and policemen in the Officers in the Schools (OIS) program.

The response from MCS has been lukewarm but not dismissive, with school board attorney Dorsey Hopson quoted as saying that MCS had “concerns” with the proposal but that the school administration intended to continue with negotiations.

Wharton’s attitude Tuesday afternoon was similar. He said, “It’s going to take compromise, regardless of who’s right and who’s wrong.” He said if agreement couldn’t be reached, “the only alternative is the courts.”

The mayor was clearly frustrated over the longstanding stalemate between the City and MCS. “Lawyers don’t come free, and we’re spending legal fees every day….We’re .spending money in 2011 about money that was supposed to be paid in 2008 and 2009.”

Meanwhile, said Wharton, the fact of the debt accounted “in large part” for the City’s difficult fiscal situation on the front end of preparing the coming fiscal year’s budget. “We’re looking at furloughs, pay cuts, on the maintenance side delaying fleet purchases, you name it.” Asked if layoffs were in the offing, the mayor said they were.

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