Guest Post from Councilman Lee Harris: The City Should End Litigation, Pay Its Debt to SCS

Since 2008, the City of Memphis and Memphis City Schools (now Shelby County Schools) have wrangled inside and outside of courtrooms over whether the City owes $57.5 million to the schools system. Although the City lost the initial court cases, the City continues to assert a variety counterclaims and it’s unclear when the litigation will end.

I believe the City should pay the school system the money and support education in Shelby County. We should have done it long ago. I believe the resort to continued litigation here, as in other areas, is a terrible and costly distraction.

Nevertheless, if we can’t stop this litigation, it’s at least time for the City to make serious preparations in the event that the City’s lawyers are unable to make SCS’s claim go away through this continued litigation or in the event a settlement is reached whereby the City agrees to make payment to Shelby County School. There is currently no financial plan in place for the City to cover this potential liability when the day comes. Every budget year, we ignore SCS’s claim. The school system’s outstanding judgment is just noted as a contingent liability on our financial reports and we move on, as if there are more important priorities.

I believe we should end the litigation. But, even if we can’t, the City should set aside a meaningful amount this budget year for the benefit of SCS. If the City doesn’t start preparing this budget year and it loses again in court, a large payment to the SCS would require the City to explore sudden and unplanned for changes in the budget. For instance, if the City doesn’t plan ahead and is forced to pay the entire $57.5 million in a single budget year, it would almost certainly mean significant budget cuts, depletion of the city’s reserves, or large-scale borrowing. If the city fails to plan to meet its potential liability now, later on we might be forced to place a significant hardship on the citizens and employees of the City of Memphis.

It’s time to get our financial house in order and, dare I say it, stop listening to our lawyers. It’s prudent to plan for an eventual payment to Shelby County Schools in the event that either the City of Memphis is ultimately unable to avoid this outstanding claim through continued litigation or in the event that a settlement is reached, since even a settlement would likely require the City of Memphis to make a substantial payment to SCS. It’s time to make sure that we have the resources to take care of this issue, when the time arises. We were all elected to do what’s in the best interest of Memphians.  Part of that means planning for future.

By Councilman Lee Harris

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