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Tuesday, February 21, 2006 | Mayor Jerry Sanders began walking this month the fragile line between staying true to his campaign promises and upsetting the employee unions he needs to lure back to the bargaining table where he hopes to install his ambitious recovery plan.

After extensive discussion on the campaign trail last year about how to best rein in the city’s rising payroll costs, the showdown between Sanders and the workforce he pledged to reform is underway, although early decisions the new mayor has staked out have struck a sour chord with city workers during the first few months of the administration.

Now the mayor hopes to secure a variety of concessions from employees. During the campaign he said he would freeze wages and require employees to pay more into the beleaguered retirement fund themselves. Sanders also wants to raise the minimum retirement age for future workers and ask current employees to accept a mandatory work furlough.

Sanders said he believes he and the leaders of the city’s five unions – blue-collar, white-collar, police officers, firefighters and deputy city attorneys – can work together, even if they have different goals.

“I understand what the unions have to do, and I think they know what I have to do,” Sanders said in a recent interview. “We’re not always going to agree, but we’re not always going to disagree, and that’s what I’m trying to point out.”

Sanders banked on his experience as police chief and the head of major local nonprofit groups to show voters he knows how to turn around “troubled organizations.” Reforming the way the 11,000-employee city of San Diego workforce did business was a major component of his recovery effort, from downsizing city departments to accepting the resignations of one-third of the government’s managers to changing the way pensions were doled out.

Bringing the unions back to the bargaining table and convincing them to go along with the reforms was the only way to save the cash-strapped government from municipal bankruptcy, he said during the campaign. And he said toward the end of the campaign that if the unions did not come back to the table to discuss these issues by May, he would consider bankruptcy.

But now as the mayor’s staff and unions meet, labor officials say they are disappointed with Sanders’ choices to champion City Attorney Mike Aguirre, the foremost foe of dyed-in-the-wool union supporters. The mayor’s push to ask San Diego’s voters to change the City Charter to allow private companies to compete for city work with the public employees further infuriated union representatives.

“We didn’t really have a relationship going in (to the negotiations), so we weren’t expecting a lot of good things come out of this,” said Joan Raymond, president of the American Federation of State, County and Municipal Employees Local 127, the group representing blue-collar city workers.

City workers have had their feathers ruffled over the past few years as union officials and city administrators have withstood a steady beat of accusations that they corruptly pursued fatter pension checks when the city was asking for mercy from its pension obligations in 1996 and 2002. Federal and local prosecutors are alleging the benefits and underfunding are linked and constitute a criminal conflict of interest, and Aguirre wants invalidated for the same reasons.

“It’s an interesting climate to start negotiations, but at same time we believe that we can, in good faith, meet and confer,” said firefighters union spokeswoman Katie Keach.

The city’s rank-and-file didn’t exactly find a political ally in Sanders nor his competitor, Councilwoman Donna Frye, during November’s mayoral election. Both embraced City Attorney Mike Aguirre’s lawsuits to determine whether the city can legally stop paying pension benefit boosts granted in 1996 and 2002. The benefit increases are the chief causes of the city’s nearly $2 billion pension deficit, which will likely chew up greater portions of the city’s day-to-day budget as City Hall attempts to pay down that bill.

In his first major speech, the State of the City address on Jan. 12, Sanders took his support for Aguirre a step further, saying he supported the city attorney’s efforts to reclaim the role of chief legal adviser to the San Diego City Employees’ Retirement System. A Superior Court is expected to rule on whether Aguirre or a board-chosen attorney will legally represent SDCERS, but his tentative judgment favored allowing the retirement board to choose its own general counsel.

Members of the Municipal Employees Association, the city’s white-collar union, anticipated the announcement and held a candlelight vigil, “mourning” the end of the mayor’s short-lived relationship with city workers, as organizers put it. The speech underlined the hand-in-hand relationship the mayor and city attorney have shared since Sanders took office, which has deeply frustrated union backers.

The MEA, which represents 6,000 workers, also staged a protest outside Sanders’ office the day he announced efforts to place two initiatives on the November 2006 ballot that would allow “managed competition,” where outside businesses competitively bid against city employees for selected services, and require the public to sign off on any new increases to employees’ pension benefits.

The mayor insists that both will save the city money in the long run, but recognizes that his methods are needling infuriating some city workers.

“Obviously since I announced managed competition and since I announced at the State of the City that Mike Aguirre should be involved with the pension stuff, it’s been a pretty strained relationship,” Sanders said. “But I don’t think it’s irreparable.”

The Mayor’s Office has been meeting formally with various unions about the proposed ballot initiatives on an advisory basis, which the full City Council is expected to weigh-in at its Feb. 27 meeting. Members of the council’s Rules Committee all but held their noses as they forwarded the initiatives onto the full council last week, an early sign that Sanders may have to gather signatures to get the proposals before voters.

Although he may not need the council to go along with his ballot proposals, he will not be able to avoid their review of the deals he cuts with the unions. If he hammers out contracts this spring with the Police Officers Association, Deputy City Attorneys and City Firefighters Local 145, only the council can finalize the labor agreements. MEA and Local 127 have contracts that extend past this year.

“He has to decide how he wants to involve the City Council as he goes along,” said Council President Scott Peters, who sets the city’s legislative agenda.

Sanders will likely be seeking from the unions short-term contracts that freeze wages and require employees to pay more into the beleaguered retirement fund themselves.

Peters said he it was uncertain whether union leaders would agree to another round of stingy contracts after workers incurred cuts to their take-home pay last year to help the city pay down its pension deficit.

“We have a little history with last year, when they made some concessions to help us solve the problem. I’m not sure what kind of mood they are in for additional cuts,” Peters said.

But Peters, like Sanders, said he recognizes that the coming year’s spending plan will include a much larger pension payment, and that the unions may have to be forced to make concessions in order to avoid employee layoffs.

“I’m concerned that, if the cash flow remains as tight as it is, there may have to be layoffs,” Peters said. “If the [unions] want to avoid layoffs they’ll have to cooperate.”

Sanders has already estimated that the pension payment will be about $300 million of the city’s nearly $900 million budget. That’s a far more expensive bill than previous years.

The city paid $163 million to SDCERS for the current fiscal year. City officials will have a clearer picture about its fiscal year 2007 contribution after the retirement fund’s financial standing is assessed by an actuary in March.

Please contact Evan McLaughlin directly at

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