Look At Me!
“Normally I don’t have a problem with cameras, but these are turned
the wrong way.” – a quip from city council member Brent Taylor
at a council hearing last week, where all attention focused on
Mayor Herenton’s announcement of the city’s victory over would-be
incorporators. Unfortunately for Taylor, he was hemmed in behind
the camera crews and was unable to get involved in the ensuing
photo-fest.
Bad Role Model
It seems that city leaders are always looking for a model for
downtown development, whether it be St. Louis or Nashville or
wherever. Well, why not Beirut?
“If Memphis officials think they have a daunting task in revitalizing
Downtown, all they have to do is take a look at the effort being
undertaken by Lebanon to rebuild the war-ravaged central business
district of Beirut.” So began a recent item in the Memphis Business
Journal about a Lebanese real estate developer meeting with local
officials to discuss what Beirut and Memphis can learn from each
other about urban redevelopment. The headline read “Downtown Is
Cakewalk Compared to Beirut,” and we should hope so since, as
MBJ details, “Beirut was devastated by a 17-year war, which ended
in 1990 and all but ruined its central business district. More
than 1,000 buildings were destroyed during the war, and the once-thriving
area was literally reduced to a garbage dump.”
It probably doesn’t even have a trolley.
What’s In A Name?
Ever since Memphis State University became the University of Memphis
in 1994, the school has had a hard time convincing its graduates
to use the new name. Apparently, it’s a problem for fictional
graduates as well. Rudy Baylor, the idealistic young attorney
in the latest Grisham-novel-turned-major-motion-picture-event,
The Rainmaker, mentions several times in the film that he graduated
from “Memphis State,” despite the fact that the action is set
in the present. Rather than mourning the loss of a potentially
valuable public-relations plug, however, the university doesn’t
seem particularly bothered by the anachronism.
“If we could round up all the people who continue to call us Memphis
State and charge them a quarter each,” says Curt Guenther, assistant
director of the U of M’s media-relations office, “we’d be filthy
rich by now.”
Verbatim
“And now he’s written a book. A book I will not be reading. I
don’t need to. For 25 years now, I’ve had to put up with LP’s
loud mouth. I know all about the stories in the book because LP
never shuts up. In fact, he’s been calling me late at night and
reading aloud from his book on my answering machine. He’s annoying.
I see enough of him.” – from Anfernee “Penny” Hardaway’s foreword
to Knee High and Livin’ Large, a new book by his shoe-shilling
alter ego Li’l Penny. |
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City May Sell Memphis Light, Gas and Water
by John Branston
 he city of Memphis may sell Memphis Light, Gas and Water, the
largest three-service municipal utility system in the country.
Mayor Willie Herenton was scheduled to make an announcement to
members of the city council Tuesday afternoon. A press conference
was also scheduled. Both occurred after this newspaper’s deadlines,
and the mayor’s office declined to release details prior to them.
The Flyer confirmed the story with investment banking sources
and others.
The proposed sale was apparently driven by deregulation of the
utility industry as well as concerns for the financial welfare
of Memphis in light of the difficulties of annexing new areas
into the city.
MLGW has been a division of Memphis since it was created in 1939
by the Tennessee General Assembly. It is managed by president
Herman Morris and a five-member board appointed by Herenton.
The announcement came as a surprise to almost everyone. About
a month ago, Morris sharply criticized a Flyer story that said
the utility was a valuable asset that might be for sale if the
city can’t grow via annexation.
MLGW, which serves Memphis and Shelby County, is a huge asset
for Memphis. The company’s pension plan is worth close to $1 billion,
and its utility plants and other assets are worth at least $1.3
billion. The utility owns and operates one of the largest artesian
water systems in the world.
It has 385,000 electric customers, 287,000 gas customers, and
216,000 water customers. Operating revenues were $1.014 billion
in 1996. MLGW buys 10 percent of TVA’s electricity. Each of MLGW’s
three divisions has a AA credit rating. The company paid $32 million
in lieu of taxes to the city of Memphis in 1996.
Its pension plan is a gold mine worth over $800 million. The exact
total was $761,053,000 at the end of 1996, and 1997 has been another
big year in the stock market. There are 2,900 retirees and beneficiaries
and about 2,600 active plan members, according to MLGW. That works
out to roughly $150,000 per person.
MLGW has $267 million in long-term debt. But it has total assets,
including utility plants in service, of $1.37 billion.
Although no politician flatly suggested putting MLGW up for sale
or “in play” in investment banker jargon during the annexation/incorporation
controversy, both Herenton and Shelby County Mayor Jim Rout alluded
to the utility at various times. In responding to Herenton’s Formula
for Fairness, Rout said the county would be glad to take it under
its umbrella.
But when the Flyer wrote a story in October headlined “MLGW Is
a Hidden Asset For Mem-phis” that detailed the value of the utility
company, Morris was quick to object.
“The suggestion that MLGW or the pension benefits paid and earned
by these loyal employees over the course of their career are be-ing
viewed as a bargaining chip in the incorporation/annexation debate
causes us extreme concern,” he wrote in a letter to the Flyer.
“While I recognize that there are many difficult issues facing
our community, I must voice my vigorous disagreement with your
suggestion.”
City council members were generally surprised by the announcement.
John Bobango said he has three concerns about a sale: what will
happen to customer rates, what will happen to employees, and how
the city will use the proceeds.
“Overall, I think MLGW has been an excellent corporate citizen,”
Bobango said. “I would be concerned about the new corporate culture
of any purchaser.”
MLGW has announced that it plans no rate increases for any service
until at least the year 2001. The company has never had a layoff
in its history.
“It’s an interesting notion, but one that deserves extensive evaluation
by the council,” said Tom Marshall. “It is the council’s obligation
to keep the ratepayers’ interests first and foremost, and depending
on how this proposed deal is structured, I will reserve my final
judgment.” n(Staff writer Phil Campbell contributed to this story.)
Annexation: What Now?
by Phil Campbell
The incorporation law is now dead, struck down by the Tennessee
Supreme Court. The city council celebrated with the mayor last
week, with hugs, handshakes, and photo ops for everyone on a day
the mayor dubbed “historic.”
But the party is short-lived. Now the mayor and the city council
have to grapple with the aftermath of the state law that screwed
up their well-laid plans, and they’re finding that things are
a lot more complicated than when they were approving annexations
back in April.
How should annexations proceed? On one hand, there’s the mayor’s
“Formula for Fairness,” which calls for a five-year moratorium
on annexation. On the other hand, there are the annexation guidelines
that the administration proposed and the council approved last
year, which had their own formula for growth, one based on whether
developed land outside and adjacent to Memphis would be profitable
for the city to take.
Tying up both these hands are two potential issues: The state
legislature may or may not pass a law this upcoming session that
would govern how future incorporation and/or annexation can occur
in Tennessee. And city and county relations may or may not get
better as representatives from both sides try to agree on a redistribution
of the property-tax base.
Herenton said last week that he still wants the “Formula for Fairness”
to be considered. When pressed, though, the mayor said he needed
time to think about what, exactly, his administration would do.
As of this Monday, his staff hasn’t met to begin work on a comprehensive
plan.
As for the mayor’s relations with Shelby County Mayor Jim Rout,
Herenton doesn’t seem to consider it a major concern. Asked on
Monday, Herenton said that he has yet to discuss the Supreme Court
decision with his county counterpart.
Not surprisingly, city council members have differing views on
what to do next.
“I think that we have to see what kind of action the state legislature
takes,” says council member Rickey Peete. “That could answer that
question for us. If the legislature restricts the annexation powers
[of a city], that could directly impact [us]. If, in fact, the
legislature does nothing, then I personally don’t have a problem
with us utilizing the Formula.”
--CONTINUED |