MEMPHIS, September 1, 2026 - The president of Memphis Light, Gas and Water asked the Council's MLGW Committee to extend a payment agreement first put in place in 2001 for another twenty years.

The item was one of two on the utility's consent agenda for the day. He told the committee the utility will have had $185 million in approvals through this meeting.

What the agreement does

He described it as an extension of a payment in lieu of taxes arrangement between the City of Memphis and the utility. The term expires in 2028. He said he received notification that the city desires to extend it.

The extension allows water division revenues of $2.5 million a year to continue to be paid to the city as an annual dividend, as a payment in lieu of taxes, to be used for the benefit of the facility at 191 Beale Street. That is the FedEx Forum.

He said it is part of the overall package the mayor is assembling for the extension, rehabilitation and operation of the arena, as part of a larger effort underway.

The question that went unanswered

Councilman Dr. Jeff Warren asked how the $2.5 million figure was arrived at and whether it is enough, and whether there is flexibility to help maintain the arrangement if needed.

The utility president said the amount was agreed to in the original agreement between the mayor and the utility president at the time. He said that in the overall package being put together, this is what the mayor has asked for, a continuation of this amount, and that there was no request for an increased amount.

He added context on the utility's broader payments. This is not the only payment in lieu of taxes the utility makes; there is another amount paid on top of it that goes to the general fund for water. Overall he put the utility's payments at about $72 million and described Memphis Light, Gas and Water as the largest single revenue stream for the City of Memphis. He said payments rise as new infrastructure comes on because they are based on plant value, calculated annually with the Council attorney, and that the figure drops when the state equalization rate goes down, which he said happened in a recent year.

Councilman Warren then asked the question directly. How much was $2.5 million worth 27 years ago, and what would that same amount be worth today. He said that was his point.

The utility president acknowledged the time value of money and moved to the second question. No figure was given.

The other consent item

The utility asked to extend an electronic board agenda solution in the amount of $47,699 through September 30, 2027. He identified the vendor as Granicus and said the system is very similar to what the Memphis City Council uses, handling meeting scheduling, minutes, board member votes, approvals and recordings. He said the utility will put out a request for proposals for another vendor during the coming year.

Councilman Warren asked whether the utility is having as much trouble with Granicus as the Council is, and how that service could possibly be worth $50,000 based on its functioning. The utility president said that is why the utility wants to put the request for proposals out, that it has a number of challenges, and that the system is less flexible than the utility would like. Councilman Warren said the Council's system goes down about half the time and seems to be working less well than when he joined the Council.

What happens next

Both items went forward on the utility's consent agenda. The utility said it will issue a request for proposals for a replacement agenda system during the coming year. No date was set.

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