The Daily Transcript put this question to mayoral candidates Donna Frye and Jerry Sanders: As mayor, what would be your priorities regarding the financing of the city's pension deficit, the funding of long-delayed infrastructure maintenance and the continued operation of core city services?
Our city faces a serious financial crisis. This includes more than the approximate $1.9 billion unfunded pension liability and $500 million in retiree health costs. The financial problems also include a $2 billion infrastructure deficit and a $500 million unfunded needs shortfall, not including police and fire safety needs. In order to address the city's financial crisis in a comprehensive manner, beginning on day one of assuming office I will:
• Support the City Attorney's efforts to immediately cease recognizing illegally-granted pension benefits: Savings: $50 million.
As part of the General Fund budget cuts I will:
• Eliminate Bloated Bureaucracy and Reduce Overhead: Savings: $48 million ($34 million in salaries and $14 million in lower health and pension costs);
• Institute a real hiring freeze: Savings: $12 million
• Reduce use of outside consultants: Savings: $5 million
• Negotiate a management agreement with the State Retirement System to administer the city's retirement assets: Savings: $20 million
• Collect debt owed to city by the Redevelopment Agencies: Savings: $20 million
If, after making all the deep budget cuts, restructuring the pension, and streamlining the bureaucracy, we still need revenues to fund core city services such as police, fire, parks, pools, streets and infrastructure, I will ask the voters to consider a temporary 1/2-cent sales tax increase as part of my comprehensive plan until the current financial deficits are eliminated.
The package would also require a vote by the public for any future benefit increases, establish an annual cap on labor-related expenses, and require that the City Auditor be an elected, rather than an appointed, position.
-- Donna Frye
Candidate for mayor
To address the city's pension deficit, we will need to seek speedy court determination of the legality of employee benefits approved by the City Council in 1996 and 2002. Benefits ruled illegal should be terminated.
My next priority will be to get employee unions back to the table to renegotiate benefits. The focus of negotiations will include developing a schedule for phasing employee contributions to the 50 percent level mandated by the Charter, increasing employee contributions for healthcare benefits, raising the retirement age and expanding the basis for calculation of retirement from the final year of service to the average of the final three years.
Freezing employee salaries and expanded work furloughs will also be necessary until the city is on solid financial footing. If the unions do not make sufficient salary and benefit concessions, laying-off up to 10 percent of non-public safety employees will be necessary to reduce the city payroll costs and fund the pension deficit.
To reduce financial liabilities associated with future employees, I will propose a Charter change authorizing an affordable pension plan that combines a less costly "safety net" defined benefit plan with a new defined contribution plan similar to those offered in the private sector.
The voters will also be asked to establish a requirement that city-funded pension benefits cannot be increased without approval from a majority of the electorate.
In addition to the contingency of laying-off 10 percent of non-safety city employees, I will eliminate approximately 100 management positions to reduce costs and future year liability to the pension system.
Simultaneous with efforts to reduce personnel-related costs, I will seek voter approval of a Charter change to permit contracting out of appropriate city services that can be performed more economically and efficiently by the private sector, saving millions of dollars each year.
Finally, to free up additional funds, we will restructure the Real Estate Assets Department to ensure effective management of city holdings, and identify non-essential property that should be liquated. A policy for utilizing one-time land sale revenues for one-time capital and other non-recurring expenditures, not to plug holes in the city's operating budget will also be established.
In addressing the city's pension deficit with the steps outlined above, we will restore Wall Street's confidence, enable the city to return to the bond market and bond for neighborhood infrastructure.
Additionally, I propose redirecting Community Development Block Grant (CDBG) revenues for their original intent -- to support infrastructure programs within CDBG eligible communities - instead of the city council pork barrel program it has become.
Core city services
By reducing costs and eliminating duplication of efforts, we will create an organization that is more responsive to our citizens' needs. I will achieve this by shrinking mid-management and program manager classifications, consolidating and centralizing support functions such as public information, human resources, financial management and information technology. The result will be a flattened, customer-oriented organization responsive to the citizen's needs. The goal of my plan is to maintain core city services with an emphasis on public safety. I flatly reject my opponent's premise that without a tax increase basic city services will need to be cut.
-- Jerry Sanders
Candidate for mayor
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