TAKE IT TO THE BANK: Memphis City Council member Bill Morrison, right, has been in talks with MLGW president and CEO Jerry Collins about securing a new electrical service contract for The Pyramid – something that’s expected to save taxpayers more than $90,000 a year. Also shown: Councilman Joe Brown. -- DAILY NEWS FILE PHOTO
MLGW Deal Could Slash Pyramid Upkeep Costs
Of the $560,000 Memphis and Shelby County would have paid for Pyramid-related costs during the coming fiscal year, almost half would have gone toward a single item: the empty arena’s power bill.
In the context of the city’s half-billion-dollar operating budget, a five- or six-figure price tag for one item might not seem like much.
But once members of the Memphis City Council got a look at the financial picture of the Downtown landmark and what it takes to maintain it, The Pyramid’s hefty utility bill quickly became a target.
And the result is something that should make taxpayers happy. Memphis Light, Gas and Water Division is poised to substitute a new electrical service contract for The Pyramid, a move that’s expected to result in about a $100,000 savings to the city and county.
‘Interesting’ indeed
The Pyramid’s power usage struck council members as unnecessarily high as soon as they were shown the latest numbers last week.
With Bass Pro Shops all but certain to build a store and other attractions in The Pyramid, the general feeling among council members is the city should figure out the absolute minimum it needs to pay to keep up the arena. And then pay no more than that.
Members of the council realized the city has a long way to go before it reaches that bare minimum, once they were told MLGW calculates the bill for large buildings such as The Pyramid based on the prior year’s utility usage – whether that power is consumed or not.
Chuck Jabbour, a representative of The Pyramid’s management company, SMG Management, told council members last week that a few events were held in The Pyramid in 2007. His point was that a comparison of last year to 2008 would not give a true picture of the arena’s current utility usage.
“It’s interesting to be consuming $5,000 of utilities (a month) and then pay more than $10,000 on top of that,” he said.
‘Significant reduction’
The emergence late last week of a legal scenario that appeared to give the council the option to drastically cut or even eliminate $93 million in funding to the city school system caused the body to take a step back from what had been an intense look at the city budget. Until then, the council was wrestling with the usual cost-cutting demands of the budget-writing process.
Memphis Mayor Willie Herenton also had placed a request for a 58-cent property tax hike on the table.
That’s one reason why, when the council was shown The Pyramid’s proposed budget that included such items as $115,000 in security costs, councilman Jim Strickland was skeptical.
“I’ve got a lot of citizens in my district that would love for us to provide that type of security for them, and we’re providing this for an empty building,” he said.
Even before the council got a look at the budget for the arena, meanwhile, talks with MLGW already had begun in an attempt to shave as much as possible off The Pyramid’s power bill. And on Thursday, MLGW president and CEO Jerry Collins sent an e-mail to councilman Bill Morrison that contained promising news.
“If SMG (Management) were to write a letter to MLGW to my attention giving MGLW 90 days’ notice to cancel the existing electrical service contract for The Pyramid, then MLGW will proceed to accommodate that request and will substitute a contract that better reflects the current electrical use of The Pyramid,” Collins wrote. “This should reduce The Pyramid’s utility bill by about $90,000 annually.”
Morrison, buoyed by the correspondence with Collins, took the news to fellow council members late last week.
“We’re in the middle of doing this. I just wanted to follow up with you guys,” he said. “We’re going to be able to reduce this so that it’s going to be money saved on the city and county side. So there should be a significant reduction in The Pyramid’s cost for our taxpayers.”
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