San Diego Case History

This piece was sent to me by a friend that lives in California.

This lady was raised in one of Toronto’s Ontario Housing Corporation projects. She lied to get her first job at age 13 over at the Dominion near Wellesley and Parliament. She entered university at 16. She has 2, children one with special needs. She built a special needs school with private money. She was an elected school board member and because she was a self-made wealthy person she did not accept any money for 8 years on the job. Her own mother didnt even know this, and only became aware of it when it was divulged by a local paper upon her retirement as Trustee.

Moreover, after discovering that the teachers did nothing when her child was being abused, she sued the school board and won. Next, she had the appropriate people fired, and then returned the settlement money back to the school – all while siting as an elected Trustee.

Her wealth allows her to have houses in different parts of the world, One of which is in Toronto. She is appalled at how our city is being robbed by the politicians. She was kind enough to share the following about what is happening in San Diego due to criminal acts and poor management:

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In 2004, the City had a deficit of more than $2 billion:

· the pension fund had a shortfall of more than $1.15 billion; and

· an additional $1 billion in unfunded retiree health care costs

The City had deliberately under-funded the pension system for years, relying on higher interest rates. Dick Murphy was Mayor at the time, but the majority of under-funding actually occurred under the previous City-Manager’s reign – Jack McGrory. Moody’s Investor Service downgraded the city’s general obligation bonds. Investigators from the FBI, the U.S. attorney’s office and the Securities and Exchange Commission were probing whether charges should be brought for the suspected filing of incomplete financial documents before the sale of bonds. The federal investigation, along with credit-rating downgrades from Wall Street, prevented the city from issuing bonds to raise revenue. They started to cut City services – it cost more to swim in the city’s pools; some public libraries cut hours; potholes and infrastructure were virtually ignored, etc. Nonetheless, in 2004, Murphy got re-elected. Ultimately, Murphy crumbled under the pressure and resigned. Several key City employees and union leaders (all union presidents, except the cops), get indicted for basically negotiating sweet retirement deals.

Fast forward to November 2005. Former Police Chief Jerry Sanders, a fiscally-conservative Republican, gets elected and develops a five year financial plan which sets the city on course to pay down the pension deficit in 20 years and alludes to benefit changes to be negotiated with the unions at the bargaining table. He even hints that the City’s previously attractive bond rating may return in the Spring of 2007. He also convinces the electorate to vote in a “strong Mayor” form of government, giving him all kinds of power without the need for council approval.

Fast forward to Spring 2007. The Mayor just gives the cops a 9% salary increase but cuts their health care benefits drastically. He is proposing no pay hike for the firefighters and a drastic cut in their health care benefits. The other two City unions are mid-term in their agreements and will not bargain until 2008.

He unveiled his fiscal year 2008 budget just last Monday. The Mayor has proposed privatizing a number of City services (which has the municipal employees union in an uproar). He just eliminated 710 jobs. Sanders told the council that he is looking toward slashing another 250 jobs in the following year’s spending plan. That would bring job cuts to 960, or 12.4 percent of the city’s workforce. The Mayor lucked out – San Diego’s high real-estate cost brought in 6% more in tax revenue than had been expected. He plans to use the money on the City’s infrastructure. The unions hate him – he has a 70% approval rating with the general public.

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