Mayor comes to Rancho Bernardo, says city on right path
By Elizabeth Marie Himchak
Mayor Jerry Sanders provided a positive assessment of where the city is headed when he gave what is likely to be one of his last speeches in Rancho Bernardo on Tuesday.
“I have 201 days left in office,” Sanders said. “I’m very excited to be moving on to a new phase in my life. But (being your mayor) has been a tremendous honor.”
He praised Rancho Bernardo residents — many of whom were among the 90 at the Conservative Order for Good Government’s luncheon — for their efforts in helping him turn the city around.
“Rancho Bernardo has given the strongest support of any community in San Diego,” Sanders said. “Everything I’ve done has been a result of everyone working together.”
He later added Rancho Bernardo’s high voter turnout combined with residents giving city officials ideas and putting pressure on City Hall were factors in forcing the City Council to make hard choices that took the city from a bleak financial future to one that will be ahead of most other cities.
Sanders said the city operated with a structural deficit for more than three decades. Though it had a balanced budget, that was accomplished by not making full payments on its obligations including employee pension plans, retiree health care and infrastructure maintenance.
This year, for the first time, he said the city is paying into every fund to the fullest extent.
“We’ve also built on our reserves,” Sanders said, explaining it was at 2 percent when he took office in late 2005, Wall Street wanted the city’s reserves at 8 percent and “now we are at 11 percent, which is pretty good.”
He said the city’s five-year financial outlook projects an almost $120 million surplus, which can go toward police, library and recreation center hours, and infrastructure.
On Friday, Sanders announced recreation centers and branch libraries were regaining five hours per week.
Sanders said when first running for office, some said San Diego’s only solution was to declare bankruptcy. But he said that was not the right path because even if every city employee was laid off, the city would not have been able to meet its financial obligations since the retirement system could not be included in bankruptcy proceedings.
The “different route” to solvency required difficult cuts and voter-approved measures. He said while the city’s future is looking brighter, there is much left to do. Part of that is passing Proposition B on June 5, which moves the retirement system into a 401(k)-style plan. Over 25 years, he said the city is projected to save $1.2 billion to $2.1 billion.
“We’ll be the first city in the country to go to that (system),” Sanders said, adding a 401(k)-only plan, rejoining Social Security or having a Social Security/401(k)-mixed plan would be options for employees to choose. “We’re looking to make changes so that politicians can never get us in that situation again.”
He was referring to City Council agreements in 1996 and 2002 to give employees more benefits in exchange for the city under funding pension and retiree health funds. The year before he became mayor the obligation was $136 million, but the city paid $36 million so the rest could go to other endeavors, he said.
He cited voter-approved measures including two in 2006 — mandating no retiree benefit increase without voter approval and recently implemented managed competition.
“The savings are fairly dramatic,” Sanders said, adding he likes to remind the city management team that it said 10 percent cuts in departments were not possible, yet when bidding for projects, savings have come in around 33 percent.
He said a plan to outsource information technology was approved on Monday, which “saves $7.4 million over five years.” If extended two more years, savings will be $21 million. Another aspect yet to go out to bid will likely save $30 million annually.
“This was a big victory, with a council vote of 8-0 in support,” he said, explaining the city used the same vendor for 30 years, which did not bid for the job. “We’ll see tremendous savings.”
He said other savings were achieved by eliminating 1,800 city positions over the past six years, reducing pay by 6 percent and employees paying half of their retirement costs. “We were not near that before.”
He said retiree health had an unfunded liability of $1.2 billion and now it is at $538 million.
As for accomplishments during his tenure, Sanders mentioned the city undertaking its largest street resurfacing project, going from seven miles in 2005 to more than 60 next year. “We’re trying to catch up on infrastructure as fast as we can,” he said.
He listed the convention center’s planned expansion — critical since it turns away a year’s worth of events annually and San Diego is the third most sought convention destination in the U.S. The expansion is projected to create 7,000 permanent jobs and 4,000 construction jobs.
A sports complex proposal for the east end of downtown will be unveiled within months. It calls for an entertainment zone between Petco Park, the convention center and a new football stadium, the latter built for year-round use.
He mentioned the Plaza de Panama project for Balboa Park and new Central Library that is 57 percent complete and slated to open next summer.
“We did that with redevelopment money before the state stole it … robbed us,” he said. “I’m a little angry about that.”
He said the $180 million endeavor is at “no cost to taxpayers.”
As for a new City Hall, he said that will be for his successor to pursue.
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