After Mayor Chuck Reed and most of the San Jose City Council took a two-hour tongue lashing Tuesday from city employees, retirees, union representatives and even staffers of several state legislators, the council voted 8-3 to push forward with Reed’s declaration of “fiscal and public safety emergency.” That word—”emergency”—allows the city to significantly toughen its stance in pension negotiations with public employees.
Councilmembers Xavier Campos, Kansen Chu and Ash Kalra all stuck to their union guns by voting against the measure, with Kalra giving an impassioned plea asking city negotiator Alex Gurza to do a better job of, well, negotiating.
The city’s unfunded pension liability, which could balloon to more than $400 million in five years, was referred to on a couple of occasions as a “death spiral” forcing drastic measures. For anyone who heard any mirth from the back of the City Hall chambers, that was probably the unions’ lawyers and lobbyists contemplating their fees and billable hours for the mêlée that is sure to ensue.
After grilling staffers in an unsuccessful effort to help herself understand the workings of opt-in pensions, Councilmember Nancy Pyle ultimately went along with the majority—after forcing them to accept her proposal to impose a new gross-receipts tax on local businesses.
By the end of the public-comments period, Pierluigi Oliverio had clearly heard enough. Sporting his signature 5 o’clock shadow, Oliverio forcefully pointed out that, yes, he’s a Democrat, and, no, he won’t be bullied into passing the budget-buck to the next generation. Earlier, Sam Liccardo sparred with colleague Don Rocha about a memo Rocha had put forward, and then swiftly denied a similar friend(ly amendment) request from Campos to explore the costs of potential litigation.
City staff will now calculate the potential savings of upping the retirement age and employee contributions and lowering cost-of-living increases, before reporting back to the council on June 21. At that time, the mayor will likely be able to officially declare a state of emergency before sending his reform plan to the November ballot. Between now and then, Gurza and his negotiating team will go back to arm-wrestling the unions with a decidedly firmer grip.