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Sounding Board: Funding Priorities

Daily Transcript Question: : What should be the priorities for the next mayor with regard to the financing of the city's pension deficit, the funding of long-delayed infrastructure maintenance and the continued operation of core city services?

There is no hurry to resolve the pension deficit. So, the mayor should just pay for both the legal, and the illegal, portions until a state court issues a final order (after the last appeal) on the mater. This could cost another billion tax dollars over the 6-8 years of litigation. But, in that time, the mayor will have excellent relations with the municipal employee unions and the business community; the first of which obviously supports this position, and the second of which refuses to weigh in against it.

The mayor will also be in sync with the majority of the City Council who hope that the difficult "adjustments" to the city's financial condition can come after they have moved on -- for some just two years from now.

Core city services will, of course, need to be severely cut. Just to find another $30 million for the pension fund in the last fiscal year, Park and Rec (for example only) was cut about 50 percent. Well, there will have to be more of that. Are we going to have another Cedar's fire that wiped out the I-15 communities and would have burned La Jolla and Pacific Beach to the ground were it not for a fortunate change in the winds on day three? Nah! We should assume that these kinds of things just won't come our way for the next 3 to 5 years. It's just not our turn.

Does trash really need to picked up every week? I don't think so.

Infrastructure? That could be a bit of a problem. But if, say, a sewer pipe broke -- it happens -- leached into the water system and caused casualties -- well, the mayor could quickly form a committee.

I think it's all good.

-- Pat Shea

Attorney, former San Diego mayorial candidate

Any crisis must be looked at as an opportunity to make lasting change. It is only in times of crisis that it is possible to convince entrenched interests to sacrifice those interests for the common good. If the situation is handled correctly, our next mayor will be able to bring back core city services to previous levels, remove the backlog of deferred maintenance that is causing our infrastructure to crumble and still allow the hard-working men and women who serve us at the city to have a fair retirement.

The next mayor must do three things and they must be done in order:

First, he or she must put together an honest budget and an accurate accounting of all city assets. Unfortunately, it has been many years since the city has done either. The challenge ahead involves more than just a pension shortfall, and enacting a comprehensive solution first requires a complete understanding of the entire scope of the problem.

After putting a true dollar figure on what it will take to restore the city's fiscal health, the second thing the mayor must do is to cut the budget. The most logical way to accomplish this will be removing redundant jobs and streamlining the operation. Many of the positions that will be cut do have civil service protection, but they can still be eliminated by not filling positions that are currently open, further attrition and/or in negotiations with the unions. Many other positions are at-will and can be eliminated immediately.

The next mayor must also prioritize expenses. The city simply cannot be all things to all people. If it does not involve public safety, infrastructure, parks, recreation centers, libraries or an expense that results in net revenue to the city or one mandated by the state or federal government, it must be cut.

Thirdly, there will still be a need for increased revenue. Hopefully, most of this can come from better utilization of our current assets. That is why we need an accurate accounting of all that the city owns. After making the hard cuts, maximizing the revenue available from current sources and having a court determine which promised pension benefits need to be paid, the mayor then will need the political courage to ask the public to approve a general tax increase to make up any additional budget shortfall that may exist. If the public has confidence in the steps taken previously, they are likely to be willing to pay an extra 50 cents for every $100 they spend if that is what it takes to make San Diego America's Finest City again.

-- Andy Berg

Director of Local Government Relations and Economic Development, National Electrical Contractors Association, San Diego Chapter

The problems are so extensive, so rife with secrecy and deceit, and possibly complicated by outright fraud, it is difficult to grasp. What has taken years to develop will not be resolved in a day, nor with a simple solution.

Each of the issues demands full attention. So it is important to take the most grave and deal with it first. The pension deficit impacts everyone. Step one is apparent. Identify clearly, through legal action initiated immediately, which benefits, if any, are indeed illegal. Eliminate them. Phase out the defined benefit plan and create a rich but supportable defined contribution plan, giving employees management control of the investments and city management control of the contribution levels. If necessary, bargain to impasse with the city employee union leadership if it won't accept this change, and make it happen.

Tackle the infrastructure maintenance imbalance with a streamlined process of doing the work. Offer to contract out not necessarily to take the work away from public employees but to utilize the market place and competition as an arbiter. City employees will either rise to the occasion, improve productivity and performance and get the work done or a private contractor will.

Core services like police and life safety can't be relegated to the "we will get to it" pile, but they aren't first on the list because the only real opportunity for adjustment is at the administrative burden level. When the city gets control of pension costs, for example, it can devote more revenue to core services. Until that happens, its only alternative is to identify administrative cost savings and implement them. The strong mayor form of government will more likely allow that.

-- George W. Hawkins

President and CEO, Associated Builders and Contractors of San Diego

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