Written by: Dr. Ray Bauer, Glenda Hicks, and Joe B. Kent

What makes this MLGW Mid-Year Review possible is the transparency offered by Doug McGowen and MLGW through the transparent publication of their monthly financials. So thank you MLGW. 

Recently, at the end of Memphis City Council's MLGW Council committee, before committee was adjourned, MLGW Committee Chair Phillip Spinosa began speaking about extending the practice of MLGW transparency to City finances.

Spinosa's remarks follow a tumultuous budget season where the Council was, on more than one occasion, surprised by multi-million-dollar surprises. Sadly, those remarks were interrupted in the public record by recording staff before the meeting adjourned, signaling lacking support for transparency within City Hall bureaucracy (Council).

Let’s hope Councilor Spinosa brings a resolution to Council to require monthly City of Memphis financial reporting from the Young administration. It’s known to be a needed practice after such a tumultuous FY25 budget season.

Most concerning in the MLGW financials is the moral hazard created by excess cash in the Gas division at $180M. McGowen has said he is just going to let the excess cash burn off over time. That in no way is a plan for excess public cash but an MLGW plan.

As long as the excess cash is there, the moral hazard is that some may find creative ways to spend public cash in ways that are not publicly beneficial. In this way, it must be remembered that MLGW is owned by City of Memphis taxpayers. Without a plan, MLGW should return $100M to City of Memphis coffers and the Memphis City Council should help them.

There is also $99M of excess cash on the Water balance sheet where there seems to be a plan for that cash for water infrastructure. But the Water  divsions's balance sheet deserves watching as there is a FY26 scheduled 19% increase in water rates. 

As far as Electric, they have $79M in deficient cash but issuing $180M in bonds will soon provide MLGW with more than enough cash to execute their capital investment plans. Near year end, will the 4% electrical rate increase still be needed? We will see.

MLGW is ahead by 1% at 51% with capital Water spend. At the same time, MLGW lags mid-year in Electric and Gas at 32% and 31% respectively.

Collectively, across all divisions mid-year, $55,140,302 in deficient capital spend is under serving ratepayers. Couple this with rising inventory across all divisions, increasing from 30% in 2022 to 45% mid-year in 2024 of capital spend, the MLGW system lacks $100M in deployed capital serving ratepayers. For more complete information see Taxpayer Justice in Check the Facts. 

Let’s hope MLGW catches up on their capital spend, and with the Memphis City Council’s help returns $100M in excess cash, from the Gas balance sheet to City of Memphis coffers. 

Dr. Ray Bauer - Co-founder of the volunteer MLGW watchdog advocacy group 21st Century Memphis or Bust!, PhD from Vanderbilt University .

Glenda Hicks - Co-Founder 21st Century Memphis or Bust!, MLGW Retiree, former MLGW Billing Representative/Specialist for residential, commercial and industrial customer accounts. Former Mortgage Lending Loan Processing Specialist,  Arkansas State University Graduate, Mass Communications Radio/TV Broadcasting.

Joe B. Kent - BBA and MS in Curriculum. Founder of the Taxpayer Justice Institute

Council MLGW Committee

MLGW 2024 June Financials

Taxpayer Justice – MLGW Dashboard