San Diego Mayoral Candidates Battle over Pension Reform

November 8, 2005 ( - Not surprisingly, San Diego's troubled pension fund has been a key topic of the city's mayoral race which will conclude with Tuesday's vote.

City Councilwoman Donna Frye’s plan includes rolling back the municipal retirement benefits that City Attorney Michael Aguirre has said were granted illegally and contributed to the pension deficit, according to a San Diego News Tribune report. Frye has also has proposed downsizing the city’s workforce by 500 jobs and turning management of the pension system over to the state.

Frye plans to ask voters to approve a half-cent sales tax increase to help pump much needed revenue into the city’s general fund. “If all else fails, then the worst case scenario would be bankruptcy,” Frye said.

Meanwhile, opponent Jerry Sanders has supported dropping the current retirement system for new employees, freezing wages, privatizing services and slashing 10% of the city’s general workforce and 100 middle managers

Frye and Sanders, a former San Diego police chief, are battling to succeed Dick Murphy, who resigned two months into his second term amid the city’s mounting financial problems (See  San Diego’s Murphy: ‘The city needs a fresh start’  ).

San Diego’s mounting fiscal woes, and how to resolve them, have been the focus of the six-week campaign. A deficit of at least $1.4 billion in the municipal pension system, coupled with how the scope of the debt was disclosed to investors, is the subject of investigations by the District Attorney’s Office, US Attorney’s Office, FBI and the Securities and Exchange Commission.