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Wednesday, Nov. 8, 2006 | San Diegans elected Jerry Sanders to the Mayor’s Office a year ago in hopes that the former police chief would turn around the flailing city.

On Tuesday, Sanders received a second vote of confidence when voters tweaked the city’s bylaws to give themselves final say over employee pension boosts and permit the mayor to outsource city services to the private sector. The mayor pushed the two initiatives as ways to both prevent another pension crisis and as a way to help manage the current one, as he said the privatization measure will enable him to significantly trim payroll costs from the cash-strapped budget.

“Tonight, San Diego voters have spoken,” Sanders said. “They’ve taken important steps toward getting the city back on track.”

San Diegans passed Proposition B by a 73 percent-to-27 percent margin Tuesday, enacting a requirement that voters must approve any new pension benefits for city workers after they are agreed to by city administration and employee unions. The proposal faced no organized opposition.

Proposition C, which allows private companies to compete with municipal employees for city work, also passed handily. The measure coasted to victory despite last-minute, labor-sponsored television ads. About 63 percent of voters supported Proposition C; about 37 percent opposed it.

Sanders held up the two propositions as key reforms that would allow him to better slay the city’s mounting workforce-related costs, which include $1.4 billion deficits in both its employee retirement plan and its retiree health insurance obligations.

Tuesday night, the mayor thanked supporters at the U.S. Grant Hotel for backing his proposals, but toned down the enthusiasm he showed during the campaign by putting the initiatives into a broader context.

He described the measures as being just pieces of a bigger puzzle he needs to assemble in order to restore the city’s financial health.

“B and C are important reform tools, but they’re just tools,” he told the crowd, many of whom chipped in the more than $650,000 that was spent in support of the measures during the campaign.

He said the measures fit into a five-year financial plan that he will unveil next week. He said the plan will spell “pain for citizens and pain for city employees,” but wouldn’t elaborate beyond a hint that the plan does not include tax increases.

Sanders envisions the propositions to significantly influence key aspects of the city’s annual day-to-day budgets, as well as the long-term debt it has incurred in its pension plan.

Proposition B is unlikely to be a factor in the coming years, as a political climate so soured by the city’s pension problems would hardly support increases in employee pensions. It sunsets in 15 years.

Proposition C became a more contentious issue during the final month of the campaign. Opponents flooded television channels with commercials that claimed the measure could endanger residents’ safety because for-profit companies could be hired to replace police officers or firefighters.

Sanders hopes that competition between city employees and the private sector will cut the city’s costs on an ongoing basis. He also hopes any elimination of positions from the municipality’s rolls will also ease the burden of the city’s behemoth pension debt.

Proposition C’s skeptics, who began campaigning just weeks ago, shot several criticisms at the outsourcing initiative, known as “managed competition,” but their arguments did not appear to pierce the popularity of Sanders, who became synonymous with the measure.

“All the mayor has to say is that it’s going to fix financial problems, and that’s good enough for voters,” said Christopher Crotty, a veteran political consultant that normally handles Democratic campaigns. “This was a much more disciplined campaign than anything I’ve seen in San Diego in a very long time.”

But Crotty said that the mayor’s current good standing with the voters could shift when Sanders does start presenting the tough choices he said he would in future budgets.

“When the next budget comes up, when pink slips start getting handed out to employees and city programs are not funded, well, that’s when people will start saying, ‘Hey, I thought you had a plan, I thought you were going to make this better,’” he said.

Others agree, saying the propositions were politically expedient but could lack the real teeth needed to steer the city toward fiscal health.

“I think voters are going to be surprised that the package of Propositions B and C don’t address they city’s financial problems,” said City Councilwoman Donna Frye, who was on the losing end of a mayoral campaign against Sanders last November.

Frye endorsed Proposition B, but opposed Proposition C. Her proposal to fix the city as a mayoral candidate included a half-cent sales tax increase, and she said she still stands by her decision to pitch voters to pick up a bigger tab for the services they receive from the city government.

Sanders has had trouble implementing some of his recovery efforts. During his campaign last year, he promised to seek several deficit-cutting concessions from employee unions at the bargaining table, but had no such luck. His first budget proposal last spring included a massive borrowing plan that he said would help infuse money into the pension system while freeing up funds for fixing parts of the city’s crumbling infrastructure. Sanders later backed off his designs for the pension loan, though he has yet to make an ultimate decision on the plan.

Sanders said Tuesday he will kick off a wave of reform proposals that the City Council will begin weighing this month. The council this month will also begin hearing the mayor’s five-year plan and the improvements he has prescribed in response to the Kroll report, which scathed the city’s past and current financial practices.

“We intend to move forward immediately,” Sanders said.

Although the dust has cleared from Tuesday’s elections, opponents of Proposition C say they are still going to work hard to hold the mayor in check on the details of his outsourcing plan.

“That will be where the rubber meets the road,” said Donald Cohen, the executive director of the liberal-leaning Center on Policy Initiatives.

Cohen and other foes of the measure complained during the campaign that proper safeguards were not in place to prevent the city from outsourcing police and firefighting jobs; using city contracts to reward the political friends of elected officials; and contracting out jobs to “sweatshop” companies that will only save the city money by not providing comparable wages or health care to its workers.

Sanders has responded by making pledges to not allow the outsourcing of public safety jobs, although he has admitted that voters will have to explicitly place that protection in the city’s constitution in a future election.

He has tried to stem criticism of potential favoritism by including the creation of an independent review board to choose the contracts. The panel will be made up of employees and members of the public who are not financially tied to bidding companies. The mayor and council can only approve the board’s recommendations in total in an attempt to guard against political tinkering. Sanders said his only criterion for outsourcing a contract is that the outside company must be able to prove that it can do the job for 10 percent less than city employees.

Proposition C will also require an annual review of all outsourced contracts and a five-year audit of the entire managed competition program. Additional safeguards are expected to be announced at a press conference on Wednesday.

Sanders disagrees with unions’ efforts to force companies to pay wages and benefits similar to those city workers receive. He said the city is “in the business of providing city services, not social engineering.”

One thing is for sure, though: Most of the details have yet to be finalized. Lisa Briggs, a policy aide for Sanders, said the negotiations over the language that will enable the propositions are still “active” after more than three full months of bargaining. Union leaders said they feel confident that an agreement over the safeguards they want will not be reached.

Sanders said final decisions over the language should be wrapped up by early December.

Please contact Evan McLaughlin directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.

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