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In State of the City, Sanders pitches 401(k) plan, CleanTECH

San Diego Mayor Jerry Sanders used his State of the City address Wednesday night to assure residents that the city will make it through difficult times.

Sanders has spent his entire tenure as mayor discussing the city's pension deficit, and after the economic downturn in 2008, he's dwelled on budget gaps and business declines as well. On Wednesday, however, Sanders was guardedly hopeful.

"Our city won't put progress on hold, waiting for the economy to improve or revenues to rebound," he said. "We won't push off our problems on the next generation. We will act now, invest now, create jobs and lift our economy by our own efforts."

The speech, given at the Balboa Theatre, is the next to last for Sanders. His term expires in 2012.

Sanders, the former chief of the San Diego Police Department, began his speech on a sad note, acknowledging the family of SDPD Officer Christopher Wilson, who was killed in the line of duty in late October.

He also thanked all the rescue workers and other city employees for helping the city clean up after the major rainstorm in December that caused flooding and nearly washed out the Poinsettia Bowl.

Sanders then pitched a new retirement plan for those employees, saying he wants 401(k)-style plans rather than standard pensions. He said he and Councilmember Kevin Faulconer will put such a plan before voters soon.

"Within government circles, this is a radical idea," he said. "It challenges the notion that public employees should be treated better in retirement than the taxpayers who foot the bill. But I'm no radical. I'm a realist. And enough is enough."

Sanders then appeared to take a swipe at City Councilmember Carl DeMaio, who recently filed papers indicating he will run for mayor in 2012. DeMaio has been vocally touting a plan that would overhaul the city's financial structure, including 401(k) plans for employees.

DeMaio is a Republican, like Sanders, but he has criticized the mayor for not being tough enough on some issues.

"Now, some will say this approach is too bold. Or that it doesn't go far enough," Sanders said. "But my motives are clear. I'm not running for mayor. I'm not clamoring for attention."

Sanders suffered a political defeat in November when voters rejected Proposition D, which would have enacted a temporary half-cent sales tax in place, as well as financial reforms. Sanders supported the proposition but voters did not. However, he said in his speech that he learned from the loss, and appreciates voter anger.

"First, they're angry that our pension costs are the fastest-growing part of our budget, while the funds available for critical services are shrinking. Believe me, I am just as angry," he said. "Second, they don't want city leaders to balance the budget by reaching into taxpayer wallets. They expect us to solve the problem without tax increases. That's what we intend to do."

Sanders touted his efforts to help San Diego's economy during the recession, especially with the CleanTECH program, a public/private partnership with the trade group Connect that is trying to foster a sector of environmentally friendly companies in the region.

"Cities compete fiercely for these jobs, but we come out on top time and again in the battle to retain and attract companies," he said.

In the coming year, Sanders said he hopes to bring more city departments, including street sweeping, public utilities, and sidewalk and street maintenance into managed competition, where the city's labor unions compete against private companies.

He also plans to merge the city's development services and planning departments, reorganize the public works department, reform the public utilities department to eliminate the bid-to-goal program and centralizing the information technology. He said this will save millions.

Sanders has already eliminated more than 1,400 positions, saving $94 million a year, and said his reforms have made an additional $88 million in annual permanent budget reductions.

However, Sanders noted that all of the city's efforts could be hindered by the state. He particularly decried Gov. Jerry Brown's plan to eliminate redevelopment agencies, saying that the redevelopment agency has been responsible for major turn arounds in San Diego, especially downtown. Sanders said he wants to move forward with redevelopment projects like expanding the San Diego Convention Center.

"I'm here tonight to tell you that I will give you everything I have to see our plans through," he said. "My last day in office will be as busy as my first, and this will be a time of achievement and progress."

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