Getting Our City Back on Track

By Jerry Sanders

Jerry Sanders' accomplishments since taking office

• Created the Five Year Financial Outlook that now guides the City's budgeting process, forcing the City Council to prioritize expenditures. For the first time, the City is meaningfully investing in infrastructure and paying down its debts.

• Proposed the City invest an additional $146 million in FY09 for these obligations, all of which were previously under-funded or ignored.

• Significantly increased the funds the City will spend on deferred maintenance and capital improvements from $2.3 million when he took office to $107 million in FY09, a 4,467% increase.

• Streamlined City operations resulting in savings of $50 million per year, including permanently eliminating 670 positions.

• Additional savings will come from the voter-approved Managed Competition process proposed by the Mayor and approved by voters. Twenty-six functions are now being targetted.

• Received previously delayed "clean" audit opinions for FY03, FY04 and FY05, with plans to re-access the bond market this year to finance key infrastructure improvements, and to have completed audits for FY06 and FY07 this calendar year.

• Secured a settlement with the SEC and began implementation of the Kroll report resulting in a completely new set of financial controls ensuring that the mistakes of the past can never happen again. As of January 2008, 76% of the Kroll recommendations have been completed.

• Established a retiree healthcare trust so that this $1 billion obligation + long ignored by the City and many other public agencies + could be dealt with forthrightly.

• Successfully lobbied state and national leaders to give our region close to $1 billion in new funds for emergency preparedness, transportation infrastructure and environmental projects. Prior to the Mayor taking office, the City was virtually absent from the corridors of power in Sacramento and Washington, D.C.

• Prepared and secured approval for two balanced City budgets that ended the shell games of the past.

• Appointed the City's first ever Chief Financial Officer and a new City Internal Auditor.

During his two-year administration, Mayor Sanders has made tremendous progress safeguarding taxpayers' interests on employee pension and benefits issues:

• Proposed Elimination of DROP and Purchase of Service Credits: As part of the current round of union negotiations, the Mayor has proposed the elimination of DROP and the Purchase of Service Credits ("Airtime") for those employees hired before July 1, 2005 who have not yet enrolled in DROP or purchased credits.

• Funding for the Pension System: After the courts refused to roll back employee pension benefits, the Mayor established a financially sound schedule for paying off the debt. The Mayor proposed and funded an aggressive 20 year amortization schedule that includes money to pay down the principal, not just interest.

• Limiting Pension Benefits: The Mayor brought suit against the Retirement System to limit the applicability of costly pension benefits to employees hired after July 1, 2005. Those benefits include the DROP Program, a 13th check, the ability to purchase service credits and retiree healthcare.

• Funding the Retiree Healthcare Liability: Mayor Sanders established a retiree healthcare trust so this $1 billion obligation is addressed honestly, not just passed on to future generations. In spite of the fact that the obligation has existed for decades, Sanders is the first mayor to set aside money to address the long-term obligation forthrightly.

• Reforming Employee Healthcare: To increase the City's purchasing power and save money, the Mayor reduced the number of insurance plans offered as well as the number of insurers. In addition, the Mayor also changed the benefits structure for employee healthcare thereby saving the City close to $1 million this fiscal year alone. The Mayor is proposing even further reforms as part of the current round of negotiations.

• Limiting Future Benefit Increases: In 2006, the Mayor proposed and the voters approved a ballot proposition requiring voter approval for any future pension benefit increases.

To lower the City's financial risks, reduce pension costs and eliminate excessive perks, Mayor Jerry Sanders is proposing a new pension plan for non-public safety employees hired after December 31, 2008:

• Lower Financial Risks for City: Because the new plan significantly lowers the benefit that future employees are guaranteed, the financial risks to the City associated with market volatality are greatly reduced. Currently, the City assumes approximately 75% of the investment risk associated with employees' retirement benefits. The proposed plan greatly reduces that to 57%.

• Lower Costs for City: The proposed plan will also lower the City's annual costs. The proposal places a greater reliance on "defined contribution" components as a way to reduce taxpayers' financial exposure. The expected long-term annual costs for General members is reduced almost in half from 16% of pay to 8.5% of pay. If General members were covered under this plan today, taxpayers would save $25 million per year.

• Proposal Ends Costly Perks: To further safeguard taxpayer funds, the proposed plan eliminates costly perks like basing pension benefits on the highest one year of pay, rewarding retirements prior to age 65 or having the City "pick up" a portion of the employees' pension contribution. At age 65 and after a thirty-year career with the City, employees can receive 119% of their pay in retirement. The new plan provides comparable benefits to the plans offered by CalPERS by lowering the benefit to a more conservative 80%, if employees fully participate in saving for their retirement.

• Completely overhauled the City's Real Estate Assets Department resulting in the first accurate and completely inventory of City land assets in years. Last year, the San Diego County Grand Jury praised the Mayor's approach to sell off surplus City-owned properties.

• Completed the first General Plan Update in 29 years. More community plan updates are now underway than ever before in the city's history.

• Performance Measurements: Sanders is the first mayor in the city's history to establish performance measurements so that citizens can judge the performance of their tax dollars.

• Accountability Measurements: The Mayor has inserted accountability measures in his major initiatives:

• Water and Sewer Rate Increases: The Mayor successfully fought for five safeguards: 1) an Independent Rate Oversight Committee to monitor expenditures from rate increase funds; 2) the establishment of a special reserve account in to which all efficiency savings will be deposited to lessen the need for future rate increases; 3) financial and; 4) performance audits will be conducted every year; and 5) future bid-to-goal contracts will be limited to one year.

• Managed Competition: The Mayor authored and then successfully campaign on behalf of a reform initiative that will help make government more accountable to the citizens it serves. The initiative contains a number of protections for both employees and taxpayers, including a provision that private contractors must submit bids that are at least 10% less than the ones submitted by city employees to be successful. The initiative also includes an Independent Review Board.

• Transparent Budgets: The Mayor's budgets have identified and funded long-term obligations and accounted for hundreds of "phantom" employees. Further, the Mayor changed the format of the budget document to make it more easily understood by citizens.

• Responsiveness: The Mayor established the city's first-ever Customer Services department; has held town halls to inform residents and solicit their feedback; and consistently communicated with residents by attending hundreds of community events and through almost daily news conferences.

• Lobbied on behalf of the expansion of the San Ysidro Border Crossing, the largest in the world, and the creation of a new commercial port of entry east of the existing Otay Mesa crossing. Construction on the San Ysidro expansion begins this summer.
• To date, the region has received over $100 million from the state's Transportation Commission for these efforts.
• Proposed that the City's world-class Convention Center be expanded. PUBLIC SAFETY

• Since Mayor Sanders took office, crime is down 4%. The City's overall crime rate is at 1960's levels, and violent crime is at its lowest rate since 1973, when San Diego had 600,000 fewer residents.

• Raised pay for police officers to more competitive levels so the city can recruit and retain qualified officers.

• Increased equipment funding by 60% for the San Diego Fire Rescue Department.

• In response to the October wildfires, the Mayor:

• Established and successfully managed Qualcomm Stadium as a regional evacuation center;
• Rapidly established the region's first Local Assistance Center to help those in need;
• Ensured that City infrastructure was repaired and/or replaced quickly;
• Obtained state funding to clear away debris from burned out neighborhoods; and
• Established a process to waive fees and help homeowners rebuild promptly.

• The Mayor is now co-chairing a multi-jurisdictional committee to better protect our region from future wildfires.

• Developed and secured approval for a comprehensive $1.4 billion plan to repair the City's water and wastewater infrastructure.

• Signed into law the City's first Recycling and Construction and Demolition Debris Ordinances, which will extend the useful life of our landfills and recycle millions more tons of material.

• Increased funding for storm water pollution prevention efforts by 85%.

• Installed a solar power generation facility that helped cut 2 million lbs of CO2 emissions from City operations.

• Increased energy efficiency at city buildings and park facilities; restricted City vehicles, which previously ran for hours, from unnecessary idling.

• Mandated that purchases of equipment and supplies be environmentally friendly.

• Championed a Cleantech (Clean Technology) Initiative that will help the City to promote the expansion, attraction and retention of businesses that develop products and technologies that provide environmentally sustainable solutions.