Article from the September 7th RBBA luncheon at the
Bernardo Heights Country Club that appeared in the
September 13th issue of the RB News Journal.

Sanders pushes for two city propositions
By Donna Hartings September 13, 2006

Nearly a year after taking office as San Diego mayor, Jerry Sanders isn’t letting up in his all-out
efforts to get the city back on its financial feet.

In addition to a remedial action plan based on the recently released Kroll Report recommendations,
Sanders is advocating a five-year budget plan and passage of two “critical” November ballot measures
— Propositions B and C.

“We need to understand that we have huge obligations lingering,” Sanders told more than 100
members of the Rancho Bernardo Business Association during a Sept. 7 luncheon at Bernardo Heights
Country Club.

It was Sanders’ third guest appearance in Rancho Bernardo in as many weeks.

While the $1.4 billion owed to the city’s pension system has been widely publicized over the past
two years, other less apparent financial obligations include an estimated $863 million in deferred
maintenance expenses and $800 million in court-mandated water and sewer system repairs and
upgrades.

“We can’t get there from here without changing something,” Sanders said.

Two of those changes are in the hands of San Diego voters as proposed city charter amendments
on the Nov. 7 ballot.

If Proposition B — the pension reform measure — passes, the city charter will be amended so that
any future increases in pension benefits must be approved by a voter majority.

And if Proposition C — the managed competition measure — also passes, the charter will be
amended to allow outsourcing of services traditionally performed by municipal employees if it is
determined to be more economical and efficient.

Sanders said he doesn’t necessarily agree with all 121 recommendations that have emerged from
the Kroll Inc., report on San Diego’s troubled pension plan system. “But if we start picking them apart,
pretty soon we don’t have 121 comprehensive measures and we need to embrace all of them to send
a clear signal out to Wall Street, the SEC and the district attorney and set this up as a model.”

But the Kroll Report, while it does tackle the city’s underfunded pension system, doesn’t solve the
city’s budget problems or how funds will be earmarked to cover other future expenditures.

“Right now, we careen from budget to budget,” Sanders said. “What we need to do is look five years
ahead and address deferred maintenance, pension plan obligations and make intelligent decisions.”

Because personnel expenses are about 90 percent of any budget, Sanders said he will work to bring
the city’s labor unions back to the table.

“I think what’s going to happen is we’ll reach a mediated settlement,” Sanders said. “I think
everyone is tired of going to court and we’ve made it very clear that we have to have new pension
and medical programs. We can’t sustain either one the way they are now.”

Although Sanders prefers looking forward, he theorizes that San Diego’s financial troubles probably
began as far back as the 1980s.

“People wanted more services, but no one wanted to raise taxes,” he said. “So we started getting
further and further behind.”