Behind the Headlines – January 20, 2017

Behind the Headlines – January 20, 2017


– [Narrator] Production funding
for Behind the Headlines is made possible and part
by the WKNO Production Fund, the WKNO Endowment Fund, and by viewers like
you, thank you. – The pros and cons
of de-annexation tonight on Behind the Headlines. (dramatic music) I’m Eric Barnes, publisher
of the Memphis Daily News. Thanks for joining us. I’m joined tonight
by Terry Roland, from the Shelby
County Commission. Thanks for being here again. – Thanks for having me. – Along with Bill
Dries, senior reporter with the Memphis Daily News. And so we’re doing the show only ‘cus of scheduling issues we’re
doing the show in two parts. We’ll have Patrice Robinson
from the city council also member of the de-annexation task force on later in the show. This task force has
met three, four times once again next week.
– Right, four times. – What would you like
to see come out of it? And I think you’ve
been on the show talking about
de-annexation before. You’re a proponent
of certain areas being able to de-annex
if they choose to. What would you like to see
come out of the task force? – Well I’m a common sense guy and when you look at the numbers common sense tells you
the city of Memphis is having to spend
10 million dollars above the revenue
that they’re taking in to service that area. So automatically they’d
save 10 million dollars. Then when they don’t
have to service it they get to keep
the sales tax and the commercial property taxes. They’re probably gonna be about 13 million dollars to the good. Alright they can take,
one of the other things that I’m big on
is urban renewal, redoing the inner city. They can take that
13 million dollars and go a long way and
fixing inner city back up. – And when you talk
about that area, what areas are
you talking about? – I’m talking about Southwind,
Windyke, and South Cordova. – Do you see de-annexation,
people talked about other areas wanting to de-annex, once you open the flood
gates you could have a huge out flow of
people and tax revenue. Again last year when the bill
came up in the legislature Mayor Strickland and
others talked about a hundred million dollar
loss in revenue and so on. Do you think that that’s
still a possibility that more than those
three neighborhoods, three areas could de-annex? – There’s the real
possibility that they could de-annex more
if they wanted to, but those three areas are
the ones that make sense. Like I said, they
could save at least 13 million dollars
a year that they could take and put back
into something else that would make the
city a lot better off. – Terry with these discussions
is there still the need, in your opinion,
for a bill in the Tennessee legislature
in the upcoming session? – A bill has to be realistic. We probably do need one to
hold their feet to the fire. It’s the question are they
gonna go kickin’ and screamin’. I haven’t seen the
template come out, but I talked to Alan Crone
the other day and he said when they unveil the
template at the next meeting that I would be very
happy and surprised. We’re all working
together on this thing and it’s really
for the betterment of Memphis and Shelby county. – Alan Crone being an
advisor to client solutions. – [Terry] Absolutely, yeah. – Go ahead Bill. – So let’s talk about South
Cordova, Windyke, and Southwind because that seems to be what we’re talking about
here at the core. These are areas that
are recently annexed. These are also areas
where you don’t have as many people who have moved in since the annexation as
you have in older areas lets say Hickory Hill
or some areas like that. So as I understand
it the city keeping some of the tax revenue
that’s generated in those areas is
part of a formula to compensate for people
who may have moved in there since that area became
part of the city. – Bill, that’s not really true. First of all, they’ve
done no improvements, they’ve issued no bonds,
there’s no bond indebtedness to anything that
was done out there. I don’t even think they’ve even
paved the street out there. Some of the area it’s not been that long ago that they did it, but arbitrarily these
people had to go back and pay back taxes over night. Retroactive taxes. To me, that’s unconstitutional. They had to pay for something
that they didn’t get. – So should the taxes
that go to the city should that not be
part of the equation if the city de-annexations
South Cordova, Windyke, and Southwind? – I think they should
be able to keep the commercial property
tax and the sales tax, but any other tax,
any other thing I don’t think it’s equitable. I don’t think it’s fair seeing
how they got a windfall, of back taxes that people
didn’t even owe to start with. So I think it would
be just a wash. – So you are going to
get as study from PFM coming up here next week. This will be the week
after that this is airing. Is that going to deal with
the migration in and out of all of these areas and
kind of set the stage for what you’re gonna see there and what you’re looking for? – Absolutely and
let me say this. One of the biggest
things in Shelby county to be us viable is
we’re gonna have to go down on
property taxes, okay. Well when you do that you got
to keep people from moving. If you keep annexing and
putting burdens on ’em they’re just gonna
move to the next county like their already doing. So what we need to do is
we got to reverse that. We got to stop the bleeding, we got to keep the
people that we have here, and we got to give incentives
to keep people from moving, and maybe entice people to
move back into the county. – When you talk about
the taxes and you’re fine with the commercial
real estate taxes staying with the city
and the south side. Just with the
commercial real estate just so I understand
how that would work, so if I owned a commercial
building in one of these areas I would pay x
percent to the county and continue to pay x
percent to the city. – [Terry] Right. – Do you think that,
have you heard from people, property owners who,
are they okay with that? I mean it sounds like, you
would think they would not be. They would want just
have county taxes, not continue to pay city taxes. – We’ve had none of
the building owners contact us or anything. None of the business
owners have contacted us. It’s been mainly
those three areas and it’s the residential people. I mean look, the
people in Southwind are paying for
garbage pick up and they don’t get garbage pick up. They have their own, it’s
a closed neighborhood, a gated community. So I mean… – And you don’t
worry that this will open the flood gates
to other neighborhoods? – [Terry] No. – You don’t think so? – I don’t think so. Let me tell you, if it we would have already
seen them mobilizing to de-annex if that
had been the case. We haven’t, it’s just
these three areas. And I told Mayor
Strickland I said, “Mayor,” he asked me says, “Terry how do we make
this problem go away?” I said, “Hey Mayor,” I said, “you’ve got it in
your hands right now. “By ordinates you can
de-annex those three areas “and then those folks
won’t be up here “in Nashville pitching
against you, you know?” And it’s just common sense. – [Eric] About five minutes
left here in this segment. – How do services work? Can the county step back
in, in these three areas and do what they were
doing until just recently and what’s the
fiscal note on that? – We can. The sheriffs department
never drew down after we lost the area. So now I will say this, we’ve had to take the
schools over since then so we would probably have
to hire about 18 more or 18 to 22 more
sheriffs deputies. Which is, I would
think probably about 11 million dollars at the most, but the county makes out because all those people
start paying fire fees and it brings the cost of
our fire department down. So it’s a wash. We don’t, it’s not a
big hit to the county. – We’ve talked to some
city council members that there are differing
opinions on the city council about this and as
you might imagine. One of those opinions
is the city of Memphis doesn’t need to be letting go of any territory at this
time that’s producing anything in the way
of property taxes. What do you say to them? – I’d say this, that if
you don’t want more blight, if you don’t want more
vacant neighborhoods, if you don’t want
the other counties over taking us in population
and taking our population away from us think like that, but if we don’t
do something quick that’s what’s gonna happen. Lewisburg, Mississippi
just to the south you ought to see it they done
built their third new school. Paid one third of
the property taxes that we pay here
in Shelby county. They could get on
385 and be anywhere in Shelby county to
work in 30 minutes. Now that’s competition. – When people talk about, I don’t know anyone
who likes paying taxes. I don’t know anyone
who likes paying the property taxes they pay now. And again, in the
city you’re paying city taxes and
then county taxes, but you’ve been on the county
commission how long now? – Seven years. – Seven years, you
were just the chairman. To reduce the property taxes,
just on the county side means you also gotta
reduce spending, right? – Right. – What can be reduced
on the spending side in order to create
property tax decreases? – Well this year, it’s
kind of a special year it’s gonna be, it’s
a reappraisal year. And I’m pretty sure
if my math is correct that you’re gonna see
a windfall of taxes if we keep the current tax rate. So I think actually, I
think that we can get the same bang for our
buck and probably go down about 25 cents on our
property tax rate. – Is that a
recalibrating the rate or is that after
you reset the rate? – It’s after we reset the rate. – What is Shelby property tax? I live in denial, they’re 4.3
or something residential, 4.1? – [Terry] They’re now 4.34. – 4.34, okay. – 4.34 or 4.36. – So you see it
happening that way more, but there isn’t some, and I should note you declared you’re running for
county mayor in 2018. I mean is there
also spending cuts? Are there spending
cuts that can go along with that reappraisal,
recalibration? – Oh yeah, I was
just talking to Bill about to instances in the county and I believe that if we
could go through there with a fine-tooth comb we could
find a lot of places to cut. Without cutting services. Evidently we’ve
got some employees, I’m not gonna call any names, but I’ll give a little teaser, that are getting
paid for nothing. So when we weed some
of those folks out I think we’ll have
some more money. – Alright, a minute
and-a-half left, Bill. – So back to the annexation. Are there other
areas of the state that are interested in this? Is there gonna have to
be state solution to this or a state standard
that’s set on this? – Bill let me tell you
what’s driving this. It really wasn’t Shelby county. What it was, you
know 20 years ago Public Act 1101, well
almost 20 years ago, said that each municipality take what draw a reserve
boundary of the area that they would grow
into in 20 years. Well a lot of
municipalities did that and they down turned
in the economy. Now it’s hard to give
services to those areas. So I think that’s
what’s driving this is a lot of these smaller cities across the state of
Tennessee are trying to get rid of some
of these areas. – And the Chattanooga
representatives in the House and Senate
were very active in this legislation and sponsored it.
– Hamilton county. – Yeah. – Well thank you for being here. We appreciate working
and the scheduling. We’ll be right back
with Patrice Robinson from the Memphis city council. We’re joined now by
Patrice Robinson from the Memphis city council also
a member of the task force. Thanks for being here. – Thank you for allowing
me to be here today. – Absolutely, and
I should reiterate that the only reason
we had Terry on earlier was just pure scheduling issues not that we all couldn’t be at the same table or
anything like that. So let me just start
though, you expressed reservations about
de-annexation when you were on the show I
think back in December. You’re on the task force. Again, this consultant
study that’s about to come to the task
force in the next week. What would you like to
see the task force do? What would you like to
see come out of this? – What I’d like for
the task force to do is really look at the
data realistically. We have been collecting data, and meeting, and
looking at the data, but we haven’t
seen it in a format where we could see
what is the benefits, what are the cost adjustments, how much would it
cost the citizens, what would the benefits be, what would be the pros and cons. And finally, at our
last meeting in December the consultant
brought to us a model that they like to use and
we’ll see it on the 26th so that we can look
at different scenarios and see what the benefits
can be for the city. What are the benefits
for tax payers and how can we provide
better services in our city and look
at the footprint. I believe that this
particular committee should really look
at this in depth and make a decision
based on the data. – So you are open to
some de-annexation
if the numbers work? – I’m open to looking
at the numbers and if that’s the case I am, I just want to say
I don’t just look at de-annexation and
say that’s the cure-all. What I’m looking at is,
what are those things that we can do to rightsize
our community and support that. What can we do to
make sure that we get the services to the
people that we serve and make sure that
we have a tax basis to support those services. – [Eric] Okay, we go to Bill. – It sounds like as if
when you get his model and see how the model
works that you think this might be a model
for future discussion. That if this comes up
again, then you can say okay here’s the process,
here’s what we need to know. Let’s run it through that
and see if it makes sense based on what we’ve done before. – Yes I think and it’s
a great foundation to start other discussions
in the community as well. We’ve got to start making sure that in our community we
have models that work. And we use those
models and we carry information through
’em all the time, but I’m thinking that
there are some other things gonna come out of this other
than just de-annexation. How do you move a city forward, how do you increase
your footprint, how do you reduce it, how do you provide
services for people who are basically on the
outskirts of the city. So I think there are a
lot of other discussions gonna come out of
this one committee. – Go ahead Bill, go ahead. – So if there are
specific discussions here around a de-annexation
and the issues becomes, okay the city has build
infrastructure in these areas or has put some amount of money in anticipation
of an annexation, if the talks get to,
okay the city gets the commercial property tax
for a certain amount of time. The city gets the sales
tax from that area for a certain amount of time,
let’s say 20 to 30 years to amortize whatever
the city’s debt was. Is that all there is
to the issue for you or is there more
involved in the issue? – I think it’s more
involved than that because not only are we
looking at infrastructure we’re also looking
at other things that the city have
provided in that area and they were looking at the
basic support of our community. Because we’re a city we
don’t have any revenue so all we have are tax dollars. So how do you
support the services and how do you make
sure that your citizens get what you say you’re
going to support. And how you do it to
make sure that citizens all have the same ability
to utilize those services. And listening to the
people who’ve come, the citizens have come out to
speak to us at the committee. Their major concern
is that there were some promises made that they
think were not addressed. And that’s another thing
that we need to talk about. What are we gonna
make sure we have in all of our communities? How do we make
sure those services are available to
everyone and how do we make sure that they’re
done with excellence? – Do you worry that
if people focus on South Corrdova,
Windyke, and Southwind as the last ones who are annexed and that is a compromise
people have talked about. If those three are allowed to go that could put the
whole issue to rest. I’ve heard other people
say that once you let one annexed area de-annex the
flood gates are gonna open. Do you worry that could happen? – Yes I do worry
because all you’re gonna do is open
another can of worms because there are
other communities, the Hickory Hill community is
really important to our city. Right now those citizens feel
a little disenfranchised, but because we have so
much industry in that area we’re about to draw
some additional dollars from the industry
and we don’t want to lose that for
the city of Memphis. So that’s why I’m trying to say that in doing this
committee as I’ve listened, and heard the data,
and as we were putting these notebooks together there are a lot of
pieces to this puzzle and when you start
putting them together and looking at them
it has a great impact. Just the businesses,
the communities, the services that are provided by the city, and how
we generate revenue. – And so when you
hear from citizens at the task force and you
hear if they email you, or call you, or
whatever and again, you’re in your first year right? Going into your second
year on this task. Do you feel mad that the
city has failed these people? Do you think that
these people are exaggerating their claims
of lack of service. What’s your reaction to hearing that these people
are so frustrated with the city of Memphis,
which you represent, that they want out? – Well because I
see it from a little different perspective as
a city council person. The same complaints that
they have in Cordova, I have in Whitehaven
Oakhaven, and Hickory Hill. – But so is that an
argument then that people say the city’s broken, or de-annexation would help
all these neighborhoods? – No I don’t think
it’s de-annexation I think it’s how we provide
services to our citizens. And that we need to be
providing more education, and provide a better
structure for our citizens. I am not condemning the staff, I’m not saying anything
negative about them. I’m just saying this is
how it has opened my eyes that there are a lot
of things we need to do and process
improvement and how we provide services
to our citizens. Just say trash pick up. We get trash pick
up on a certain day, but they’re
complaining that they don’t get the bulk pick
up at the same time just like the other
citizens of Memphis, but those citizens are
complaining as well. – To that end, do you
I know I heard Bill that Mayor Strickland
has talked about brilliant at the
basics again and again. He’s beaten that to death, but he’s stuck to that in part because he goes to
community meetings he says and he hears about
these basic services. Do you feel like the
Strickland administration had made headway on some of
these issues in it’s first year? – I believe they understand
what the issues are and that they are
working on them, but I am pressing public works to really come up with a plan that citizens can really
understand and know. We even talked about
just this past Tuesday at our committee meeting we
were just asking questions about the piles of
trash that are outside your trash receptor where you
pick them up every 21 days. How do citizens know when
your 21 days come up. It needs to be a schedule day. One day, every other week,
how much does it cost? Tell citizens,
what does it cost? Just be realistic. What kind of service
do citizens want? Do you want to pay
for a Cadillac service or do you want to
pay for a Volkswagen. You know we need
to communicate that and then we need to
educate our community and I am really, really
pressing the staff to do a better job
of communicating. – [Eric] About four
minutes left, Bill. – So if there’s another proposal
in the state legislature for de-annexation to
allow for the referendums and to apply statewide
presumably or to certain areas, does that complicate
the work that you’re involved in with the community? – Oh yes, that
complicates it even more because I’ve just stated
that as we looked at the data and looked at the information
that’s provided to us it’s more than
just de-annexation. You have to look at so
many individual services that have been provided. How much it costs, what
percentage of that cost those citizens have
already paid into it, how much do they
owe in the future? You have to have some
financial geniuses at the table to help us navigate through that so that the people
who remain in the city are not negatively impacted. – So if because South Cordova,
Southwind, and Windyke have been so recently annexed, does that make a more probable
case for their de-annexation than areas where they weren’t
in the city quite a while ago, they’ve come into the city and
been in the city for a while and people have actually
moved to those areas because of the sending services. So are these three
areas something that could possibly
be carved out? – We don’t know because the
data hasn’t proven that yet, but you said yourself
today that sometimes we made investments
in those communities before we even annexed them so
money has already been spent and we need to make sure
that we capture those dollars for the citizens of Memphis. – Speaking of,
earlier in the show when Terry Roland was
on he talked about in Southwind and Cordova,
these three areas, Windyke the numbers he’s seen,
the data he’s seen that it would save the city
of Memphis 10 million dollars. They are spending 10
million dollars more than they’re getting back
from those three areas. And so his point is, hey
that’s 10 million dollars the city of Memphis can invest
in other areas of the city. Do you believe it’s
10 million dollars? – No I don’t because
of the numbers the staff gives us
numbers that we ask for, but we didn’t drill down to
some other basic services that need to be added
to those numbers. So as we pull this
information together and as I’ve asked
additional questions and we’ve added
extra layers to this I think it’s gonna work out
to be a little differently. And as I even listened
to what Mr. Kennedy says on the Shelby county side. – Harvey Kennedy is the CAO, chief administrative
officer of the county. – Yes, and he has
proposed that even if we allowed them to de-annex
that he can’t even pick it up on his side because it’s a
too expensive of a proposal as we’ve talked and talked
about the different services. So it’s a lot more to it. We need to spend
a little more time with looking at the financial
impact on both sides. – How is this discussion changed because when the bills
came up in the legislature they really caught
city hall off guard. It was mainly because
there was a change over in administration at the time. Everybody was new, and so this kind of blew up pretty suddenly. So over about the last year
that y’all have to look at this what have you learned
about this issue that you didn’t know
and everybody was
trying to figure out what is this bill, and
where is it coming from, and are they likely to pass? – There’s two things
that I’ve learned that this is more
complicated than you think and it requires some
mathematical geniuses and some amateurization
and all kind of things that need to be talked about, but the thing that’s
most important to me is the second thing
that I’ve learned. That the issues that the people
have in those three areas that really want
to be de-annexed is the same, they
are the same issues that we have
throughout our city. – In next steps
you’ll get to report and then what do
you guys vote on it or what happens then, briefly? – Then the committee will
decide what we do next. – What you do next,
alright we’ll stay tuned. Well thank you for being
here, thank you Bill, and thank you for joining us. Join us again next week. (dramatic music)

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