Friday, May 30, 2008 | Mayor Jerry Sanders says he wouldn’t have believed it if someone told him, back when he took office in 2005, that he would begin his reelection campaign with the city of San Diego still stranded without a credit rating.

Luckily, for Sanders, he didn’t have to face the even scarier prospect of going into Tuesday’s primary with such a major campaign pledge unresolved. Earlier this month, Standard & Poor’s reinstated the city’s credit rating after a four-year suspension, clearing the way for the city to return to Wall Street’s good graces after years of delays and frustrations.

The announcement marked a major milestone in the city’s attempt to recover from the deep-rooted financial crisis that prematurely drove Sanders’ predecessor from office. However, days earlier, Sanders took a step backwards in his hopes of fulfilling another one of his key 2005 campaign promises when the City Council failed to approve his proposal to create a new employee pension plan, throwing the fate of the fiscal reform into the air.

The two drastically different results of this month underscore the ups and downs Sanders has experienced in attempting to complete the detailed list of promises he offered voters to separate himself from a crowded group of candidates in 2005.

That campaign, held at the depths of the city’s financial meltdown, essentially became a race of financial proposals, and it shows in Sanders’ list of promises. He pledged to back the city attorney’s legal challenges to employee pension benefits, threaten bankruptcy and privatize city services. He promised to demand the resignation letters of 300 managers and change a figure in the formula that calculates employee pensions.

A review of Sanders’ progress on his 2005 “Action Plan for Fiscal Recovery” reveals a mixed picture. For example, he successfully asked voters to approve measures allowing the privatization of selected city departments and requiring voters to approve any future increases to city employee pensions. He also has trimmed $50 million in costs through efficiency and job cuts.

The mayor added a significant notch on his reelection belt with the credit-rating restoration. Although that isn’t specifically listed in his action plan, it was listed daily by each candidate in the election as key to fixing the city’s problems.

However, the slog back to Wall Street’s good graces took much longer and cost millions of dollars more than anyone expected. Whether or not Sanders institutes the hybrid pension system he’s trumpeted for years now hinges on forces somewhat out of his control. He is asking the City Council to place an initiative on the November ballot that would allow voters to decide whether to institute a plan that he says will save the city more than $50 million over its first 11 years of existence, although the City Council could alter what proposal actually goes before voters.

He’s also abandoned a number of promises, saying that they were either unworkable or unreasonable given the City Hall climate.

In an interview reviewing his campaign promises and reflecting on his first term in office, Sanders said he had no idea how bad things were going to be when he arrived at the helm, despite the city’s well-publicized problems and the many investigations swirling around City Hall at the time.

“I think we’ve made actually pretty rapid progress in 28 months given what we’ve faced. And I just hope people will put that into context and not just remember the last three months or six months and remember what the city looked like when I took over in 2005,” Sanders said in the interview last month. “And I think if they look at that and look at where we are right now, they’ll see we’re making tremendous progress.”

The mayor conceded that the job had been harder than he imagined. “I’m not the best politician in the world. I’m going to make mistakes. I made those promises in good faith that I could get them done. … And you can chalk that up to political inexperience, you can chalk that up to a number of things, you can’t chalk it up to a lack of effort or honesty.”

It’s an important measurement for Sanders. This time around, he’s not floating new proposals and holding regular press conferences to unveil ideas. Instead, his pitch, told in periodic debates and in front of grocery stores on the weekend, is pretty simple: Look what I’ve done so far. If you like it, please give me a chance to keep doing it, I’m on my way to getting the city back on track.

Promises can be an inflated currency on the campaign trail. But the 2005 campaign was unique in how detailed the plans were and how narrowly they were tailored to one task: solving the city’s pension and other related financial problems.

Glen Sparrow, San Diego State University professor emeritus, said there was uncertainty during the 2005 election about how bad things truly were at City Hall following Murphy’s resignation.

“So it’s easy at that point. Promises can be made or commitments made and then you can get there and say, Jesus, they didn’t tell me when I opened the door it would be like this,” said Sparrow, who advised the mayor on his transition team. “Although there were a lot of us saying this is a mess and this is not an easy task.”

To be sure, Sanders hasn’t spent his time solely on checking off his campaign to-do list; he’s dealt spent plenty of time on the type of things that tend to pop up in a mayor’s tenures: disaster (the 2007 wildfires) and scandal (the Sunroad saga). And he’s taken up other causes outside of his principle plan, such as establishing a five-year financial forecast and refurbishing the city’s infrastructure.

Still, a look at Sanders’ progress on these campaign promises offers a look at how the incumbent has done in keeping up with his pacts with voters, his effectiveness at enacting change and how far he’s gotten in getting the city “back on track,” as his campaign slogan suggests.

His opponent, Steve Francis, regularly cites some of Sanders’ unfinished business as one of the incumbent’s failures. But he’ll have perhaps an even more ambitious slate ahead of him if he’s elected. Francis’ 54-page vision plan and his campaign ads span a wide spectrum of ideas and proposals, some of which don’t even fall under the mayor’s control, such as grocery prices and the school district.

The review of the mayor’s progress in living up to his central campaign pledges found that:

  • Despite promising to use the threat of bankruptcy to force employee unions to renegotiate their contracts, Sanders almost immediately abandoned talk of going into Chapter 9 municipal bankruptcy. He never called the unions back to the table.

Sanders said he met with two or three law firms to assess the possibility of going into bankruptcy. “And of course a law firm is always going to tell you you can go into bankruptcy,” he said. But the mayor concluded that from those talks that wasn’t realistic because the city was paying its bills and there weren’t cash-flow problems.

“And I will tell you that unions have been more recalcitrant than I thought they were going to be,” he said.

He also threatened to cut 10 percent of the work force should the unions fail to go back to the table. Although the cuts were never used as a threat to get the unions back to the table, the mayor says he will have cut 10.3 percent of the workforce by the time his 2009 budget is approved by City Council.

  • The mayor originally supported City Attorney Mike Aguirre’s legal challenge to employee benefits, but has since soured on the idea — as the challenge has failed in court — and the city attorney himself.

“I was told we could win,” he said. “Now, looking back at it, I’m not so sure we could win those.”

Sanders said the Municipal Employees Association, the city’s white-collar employee union, simply had good legal representation in Ann Smith. “I think she’s a better attorney than the city attorney,” Sanders said. “So I think it’s a combination of them having really good attorneys and us not.”

  • Sanders offered up a myriad of hyper-specific proposals for salary levels and benefit changes San Diego’s pension system in the 2005 campaign, as solving the pension system’s $1 billion-plus debt was central to the campaign. He has had mixed success in fulfilling these.

He promised salary freezes until the city’s financial stability was restored. And he partially delivered on the goal.

He has offered no salary increases to the city’s white-collar workers, blue-collar workers and deputy city attorneys.

In the midst of a recruitment and retention crisis, however, the mayor last year gave police an 8 percent-to-9 percent raise, and again gave them a 6 percent raise this year.

He’s also backed off of his original proposal to increase the retirement age for public safety employees from 50 to 55.

“One of the things we found out pretty clearly is that retirement plans for cops are pretty much all the same statewide and with the nationwide and statewide shortage of police officers, trying to recruit when you’re not doing the same thing as everyone else makes it really tough,” Sanders said. “That’s the reason we did give the raise to police officers, to stop people from leaving, and that was a business decision based on the market.”

The proposal was coupled with one to increase the retirement age of general workers for a total savings of $15.7 million. General workers haven’t seen their retirement ages increase, either, but the mayor says a similarly effective proposal is in the new pension system he will ask voters to approve in November.

Sanders pledged to require employees to pick up a significantly larger share of their healthcare costs, cap future costs of retiree health care and push to eliminate a host of politically unpopular pension benefits, such as the ability to purchase extra years of service and DROP, or Deferred Retirement Option Program.

In the interview, the mayor said his office found out that the retiree health care is a vested benefit that’s untouchable, but said that by moving police and fire into a new health care system, the city has cut costs. He also planned to do the same for the rest of city workers, however, that proposal died for the time being after the City Council failed earlier this month to approve the mayor’s new labor contracts.

His office recently brought lawsuits challenging the validity of DROP and the service credit benefits for all employees that haven’t yet participated in them, something police and firefighters are encouraging so that a legal determination can be made once and for all.

The mayor also promised to force employees to pick up 50 percent of their share of pension contributions. He’ll need his November ballot proposal to pass to be successful; the new pension plan wasn’t pursued until this year, he said, because it’s the first year all three non-public safety unions have been at the bargaining table.

Sanders also said he would use pension obligation bonds in order to borrow money and help pay down the pension deficit, however, those efforts have been thwarted by a city attorney opinion challenging the offer’s validity and the city’s lock-out from Wall Street.

Finally, the mayor abandoned his plan to institute mandatory work furlough for city employees at a savings of $6 million annually, saying that it made it too difficult to provide city services.

  • Three ballot proposals stood front and center in Sanders’ 2005 campaign: One to allow for the privatization of certain city services, one to mandate that city voters approve all future pension increases and another to create the hybrid pension system.

Voters approved the first two in 2006 with the mayor serving as their chief promoter. “That’s one of the things that’s been lost in all of this,” Sanders said. “I don’t think people remember three weeks ago.”

Eleven city functions were selected earlier this month for possible privatization, but none have yet been completed. The process is called “managed competition,” and its supporters point out it is different from standard privatization in that city workers get a chance to compete to keep the work.

Francis has criticized the mayor for his slow movement in this regard. Sanders claims that he legally had to go through a rigorous negotiating procedure to carefully do everything by the book.

After getting into office, the mayor dropped the idea of enacting the hybrid pension system through the initiative process and instead attempted to negotiate a new pension system for new, non-public safety employees during this year’s labor talks. The talks hit a dead end and the council ultimately balked at the contract he asked that they impose upon unions.

Now, he’s going back to the council and asking them to put a different hybrid plan on the November ballot for voter approval. The council could alter the proposal or put an entirely different proposal before voters.

In 2005, when questioned how he would win the support of the City Council needed to enact some of his reforms, he always had an easy answer available: Leadership. He would be the mayor who could get it done.

To that end, Francis has leveled some of his most pointed criticism of his opponent, saying he’s failed to fix the city’s structural budget deficits and display the leadership needed from a big-city mayor.

“The mayor has often said it’s the toughest job he’s ever had,” Francis said. “If it’s too tough for him, he should go do something else.”

  • Finally, the mayor proposed a massive streamlining of city services through what’s known as “business process reengineering.” He now reports that the undertaking has resulted in $41 million in annual savings, a sizable portion of the $50 million he said he’s cut from the city’s structural budget.

“I feel like we’ve been successful in really taking a look at the whole organization and restructuring it,” Sanders said.

The process has been criticized by Independent Budget Analyst Andrea Tevlin for moving too slowly and keeping important information away from the City Council. Tevlin also said it’s been impossible for her office to ascertain whether cuts came directly from BPR or other budget cutting.

The mayor also promised to cut 100 management positions at savings of at least $10 million. He said he has eliminated 98 of those positions for a savings of $9.9 million.

He also pledged to alter the way the city uses its federal Community Development Block Grant funding. Reforms have been instituted under the CDGB program following a federal audit and more are planned, Tevlin said. The mayor has also, as he pledged, worked to revamp the city’s Real Estate Assets Department.

Sanders said he’s proud of what he’s accomplished and it’s important to realize that he didn’t have a four-year term like most mayors.

“We obviously haven’t accomplished all of it and I think when you look at promises you’re usually looking at a full term and it’s only been 28 months,” Sanders said. “The second part of it is you don’t know what you don’t know in a campaign. I thought we could do things we couldn’t.”

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