Memphis City Council makes emergency decision to escape financia - Action News 5 - Memphis, Tennessee

Memphis City Council makes emergency decision to escape financial ruin

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(WMC-TV) - Memphis city leaders are scrambling to escape financial ruin after the state comptroller sent an unprecented letter, warning the city that it is on shaky ground.

Behind the scenes, lawmakers are calling the day they aired the city's bleak financial outlook "Black Tuesday".

Now, they are in fix it mode.

"We do not want our city to end up like Detroit, having someone else manage our fiscal affairs," said Memphis City Councilman Myron Lowery.

Memphis leaders are making every effort to get back into compliance with the state comptroller.

"The ultimate control of the budget lies within the city council and it is our responsibility to do something about it," added Lowery.

Tuesday night, the city council took emergency votes and moved around money to pull four city funds out of the red.

In addition to replenishing the negative fund balances, Memphis Chief Administrative Officer George Little says they are going to make all of the funds whole.

The city has stacks of paperwork to fill out, some documents date back to when the FedExForum was built.

They hired an accountant to address pressing issues within 60 days.

"To take care of any technical operational deficiencies," said Memphis Mayor A C Wharton.

Then, there is the long-term debt issue.

Council members learned interest is about to balloon.

"We're facing a real challenge. Next year, the debt service on our bonds will be $21 million more than this year," said Lowery.

Interest will balloon again to $63 million in 2019.

"Taxes going up, employees getting fired, salaries getting cut. That will happen," warned Memphis City Councilman Shea Flinn.

The mayor is working on a five-year plan to manage big issues.

"Pensions, post-employment benefits, falling revenues as a result of the reappraisal," he said.

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