MLGW study suggests cutting jobs & closing offices

MEMPHIS, Tenn. — A new study out Wednesday recommends MLGW could save tens of millions of dollars if it cut hundreds of jobs.

Baker Tilly, a consulting firm which conducted part of the two-part study, recommended cutting 300 to 400 jobs as part of its dozen-plus recommendations.

How much money would MLGW save from this? At least $30 million, most of which came from salaries.

But the consulting firm said this doesn't have to be done right away.

The study recommended cutting jobs over the next 18 months.

Currently, MLGW employs nearly 2,900, according to the study.

But Baker Tilly admitted in its study that during its look into staffing levels, it did not take into account factors that may increase staffing, like MLGW's aging infrastructure.

"Benchmarking is not an exact science, and the benchmarking conducted for this report is only comparing MLGW staffing levels to customers served and ratios to internal staff. This does not take into account factors that may increase staffing levels, such as an aging infrastructure, the physical size of the utility service area, the demographics of the customer base, or numerous other considerations," according to the study.

The study also recommends closing four of the five community offices, stating it would save $4.9 million.

If the plan was implemented, Millington would close during the first year, North in the second year and Whitehaven in the third year.

MLGW said in a statement that it would save $92 million over a five-year period and an additional $40 million a year thereafter with the recommendations from Baker Tilly.

The total cost for infrastructure upgrades? $1 billion, according to MLGW.

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A second part of the study was released by MLGW, as well.

This study was conducted by a different group: HDR.

HDR recommended infrastructure improvements immediately.

"This report recommends taking immediate action to begin implementing improvements to the systems. To do so will require a significant investment in more capital expenditures. If the board and the city are unwilling to accept such investments many important projects and programs will be deferred," the group wrote.

"Doing so will almost certainly result in infrastructure failures, an increase to the overall implementation cost, and ever more likelihood of a failure that could result in serious consequences for residents, customers, and businesses in Memphis."

"Neglecting the essential system is no longer an option – serious failures are or on the brink of occurring at an increasingly rapid pace and schedule.  The ability to successfully apply temporary repairs rather than permanent fixes diminishes significantly with each passing day."

They continued, "we believe that the recommendations presented in this document are essential to maintaining reliable facilities that will allow MLGW to fulfill its responsibility for safely delivering services that create and sustain superior customer experiences and make MLGW a trusted provide of exceptional customer value in the communities we are privileged to serve."