Comptroller Bill Thompson was the featured speaker at the City Hall On/Off the Record breakfast held Sept. 12 at the law offices of Arent Fox. Speaking just after the anniversary of the Sept. 11 attacks, Thompson addressed his view of how the city has progressed since those dark days in 2001, how he thinks city pension funds stand and why he deserves credit for their health, and his thoughts about elected officials who might try to change the term limits law without putting the matter forward for public referendum.

What follows are selections from the transcript of the on-the-record portion of the morning.

Q: We have just passed the seventh anniversary of the Sept. 11 attacks. How do you think the city has progressed since then?
A: We have progressed dramatically. If you go back and think back, Jan. 1, 2002: mayor, comptroller, public advocate on the steps of City Hall. We were all being sworn in. It happens every four years. We were covered not just by NY1 and local print, local newspapers and television stations. We were covered by CNN, CSPAN. They carried the ceremony live. The eyes of the world were on New York. And the ground was still smoldering at Ground Zero. If you go back, would New York City survive? Would businesses flee Lower Manhattan? Would New York City continue to be a viable city? All of those questions hung in the air and the greatest sentiment was uncertainty. And there were new people being sworn in to run government. I think New York City has changed and progressed dramatically. If you look initially just at lower Manhattan, there was a lot of focus yesterday, I did a lot of interviews, at lower Manhattan, it's still the third largest business district in the country. The number of square feet for office space has declined a little bit, but if you look at Lower Manhattan now, it's still a strong business hub and it's also a great and continually growing residential area. It's a strong area. It's now a 24-hour neighborhood. It's progressed. You're looking at buildings like the Goldman Sachs building, which are being built, and others in Lower Manhattan. I think if you look, we have bounced back dramatically in that area. The number of jobs there are approximately the same as existed there before. And it's growth and development. The World Trade Center site, you've broken ground. And you've broken ground on the Freedom Tower.

Q: And by other measures?
A: The city's economy after we struggled for a few years. We were in a recession when we were attacked on Sept. 11 and we stayed in a recession while the rest of the country came out of it. We looked at budget gaps that were of record proportion, in excess of $6 billion. Fast forward a few years down the road, 2004, 2005, 2006, 2007-record surplus. We bounced back and were humming on all cylinders and, if you look, real estate, construction boom, tourism has grown, some of it fueled by a weak dollar, but we're having more tourists than ever before. Look, we went from record deficits to record surpluses. And New York City now, despite of the economic downturn and subprime mortgage crisis and Wall Street and what's happened there and the credit crunch, we're still doing better than most municipalities around the country. Doing better than the state of New York definitely. The predictions of doom and gloom, the one of New York City being one that people fled from, we've bounced back dramatically. And it really is one of the great success stories in the nation's history.

Q: How would you describe the health of the city pension funds currently?
A: We went through and I've been around for almost seven years as the comptroller. I have seen the ups and down. If anyone here loses a billion dollars in a month, try and sleep. Or if you realize you're looking at the market and it continues to go down, it eats a bit of a hole in your stomach. We were in the middle of three consecutive down years when I started in the market and we went from $80 billion in size to $73 billion during my expert leadership. We have grown over the last few years to over $100 billion. So we continued to grow. Right now in our last fiscal year we probably lost about 5 percent, but then again, if you look over a period of time, the last five years we've gained an average of 12 percent as far as an increase in the last few years. We have done well. The one thing that I am the proudest of and I am happy to see Adam Blumenthal here, former deputy comptroller, involved in that. He used to put a lot of things personally in place for us on the economic side. We started in 2002 to move in a different direction. It was stocks and bonds portfolio before, 70 percent stocks, 30 percent bonds. So when the market went up, we looked really smart. Market went down, not too bright. We have diversified the portfolio, more in real estate so we're moving toward 5 percent in real estate, private equity, 5 percent in that direction. More international equity, that's where a lot of growth is these days over the years, to create more balance, a better diversified portfolio. Right now, as the market goes down, and we see such volatility in the market, no one has seen things like this before. We're in better shape. We're in much better shape than we were before. Are we losing money? Everyone is. Are we losing less than we would have lost before? Yes.
As we also move into some conservative strategies in hedge funds and start to move in that direction, we will create even more balance.

Q: If the mayor and the Council change term limits without a referendum, they will be the ones deciding whether they themselves get to run again. Is there any way, in your mind, for that decision not to appear self-serving?
A: No. Just to be blunt and direct, there is no way for them not to appear to be self-serving.