SAN DIEGO – Mayor Jerry Sanders will bypass the City Council and appeal to voters to change the city's pension system in the fall, after the council refused to impose his contract on three unions yesterday.

Sanders said he will not participate in any more contract talks, though Council President Scott Peters pressed him to do so.

The mayor had been opposed to any movement on his pension proposal.

But for a few hours last night, he accepted a Municipal Employees Association proposal to save the same amount of money as his plan – but retain a traditional pension instead of the Sanders plan, which mixes a pension with a 401(k) savings plan.

After the unions – and then the council – balked at his last-minute concession, he declared he would go to the voters.

Minutes after the meeting, Sanders said that he will not negotiate with unions any further, and he called on the council to put his original pension proposal on the ballot by the end of the month.

If the council declines, he said, he will mount a signature drive to have it placed before voters in November.

“Everything is off the table at this point,” Sanders said. “Bargaining is over.”

Overview Background: Mayor Jerry Sanders declared an impasse with three city unions Friday, in his effort to negotiate a contract with no raise and lower pension benefits for the employees. What's happening: The City Council yesterday deadlocked on a 4-4 vote, and therefore did not ratify the impasse. Future: Sanders may go to the voters, bypassing the council to impose his contract offer. One of the three unions, which represents blue-collar workers who collect the city's trash and work on city streets, could strike; they are set to meet tomorrow. A strike vote has not been scheduled.

The council voted 4-4 three separate times, and the ties meant the proposal to impose the pacts failed. Peters and council members Toni Atkins, Ben Hueso and Tony Young opposed the mayor. Council members Kevin Faulconer, Donna Frye, Jim Madaffer and Brian Maienschein backed him.

The Municipal Employees Association said its compromise plan would save the city $25.4 million per year, compared with $22.7 million in savings from a separate plan by Sanders.

Sanders accepted the union's pension proposal. All three unions protested that his adjusted plan was too abrupt, and didn't allow for negotiations on other items, like his plan to give them no raises.

Earlier, the Municipal Employees Association pension idea won the backing of City Attorney Michael Aguirre, who has been a strident union critic as the city has tried to recover from huge financial problems stemming from generous benefits previously granted without money to fund them.

“It's not many times that I say I completely agree with the MEA,” Aguirre told the City Council, five hours into a meeting on the subject.

To impose the mayor's contract, the council would have had to agree that the city has reached an impasse in negotiations with the Municipal Employees Association, along with Local 127 of the American Federation of State, County and Municipal Employees and the Deputy City Attorneys Association.

The plan Sanders now says he will take to voters revamps the pension system for the unions that would sharply reduce benefits for workers hired after Jan. 1, 2009.

Sanders called it the “most important” aspect of his plan, and has maintained for months that he is willing to impose it on workers. It would not apply to police officers and firefighters, who agreed to new deals last month.

The proposal, which Sanders touted as a hybrid retirement plan, combines elements of a traditional pension with those of a 401(k)-style fund. It would limit benefits for workers who retire early and, he argues, could reduce investment risks to the city.

For past stories and documents on San Diego's pension problems, go to pension.uniontrib.com.

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Jennifer Vigil: (619) 718-5069; jennifer.vigil@uniontrib.com