School merger may cost more than originally expected - WMC Action News 5 - Memphis, Tennessee

School merger may cost more than originally expected

Shelby County Commissioners have serious concerns about funding when Memphis and Shelby County Schools merge in August. Shelby County Commissioners have serious concerns about funding when Memphis and Shelby County Schools merge in August.

(WMC-TV) – Shelby County Commissioners have serious concerns about funding when Memphis and Shelby County Schools merge in August.

Shelby County Commissioners said they'll have to walk a financial tightrope to keep costs down for every taxpayer in the County.

Commissioner Terry Roland said his greatest financial concern about the Memphis and Shelby County Schools merger is the city district's $1.1 billion in unfunded liability.

"There are only two ways to handle that," said Roland. "And that's to either go up on property taxes or go down on the benefits for the teachers."

The Other Post-Employment Benefits (OPEB) liability comes from retiree life insurance, health care and deferred compensation.

Even Commissioner Steve Mulroy, who supported the merger, is concerned.

"MCS needs to do a better job of putting in reserve money to fund the OPEB liability, absolutely," he said.  "But I don't know whether that changes the calculus with respect to the school merger though."

Roland said his fears about the merged district's finance extend beyond the OPEB liability.

"If that $1.1 billion doesn't scare you, we're talking about having to hire at least 100 deputies to put into these schools," he said.

Roland said the MCS security detail will dissolve when the school district ceases to exist and staffing the schools with county deputies will increase costs.

"Whatever seems to be the most cost-efficient method of providing the security is what we should look at," said Mulroy.

But the money problems don't stop there.

Commissioners are also concerned MLGW will stop giving $686,000 in free water to MCS.

"When Memphis City Schools dissolves, that agreement dissolves," said Roland. "So we've got to factor that in too."

"It bothers the heck out of me and I hope the city council will put pressure on MLGW," said Mulroy. "Precisely at the time we need to pitch together to make the school merger work, MLGW is going out of its way to make it harder."

Mulroy also said the utility should extend its free water program to county schools.

The Transition Planning Commission is still mapping out the structure for the combined school system and everyone involved in the merger should have a true understanding of its costs in August.

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