Unions: Half-Billion Saved in New Proposal

Five public employee unions in San Jose put forward a pension reform proposal Tuesday that they estimate will save the city $467 million during the next five years. The unions represent police officers, firefighters, architects, engineers, middle managers and maintenance supervisors.

Whether or not the proposal finds a receptive audience from city negotiators and actuaries is still undetermined. Mayor Chuck Reed said in a staement he is looking forward to seeing how “our actuaries and financial experts analyze the fiscal implications and potential savings contained in the proposals presented today.”

Included in the pension savings plan, which was analyzed by actuary Thomas Loman of Bolton Partners on the unions’ behalf, a multi-leveled tier system for current and new employees would be developed, as well as giving sworn officers the option to join CALPERS—a system no city employee is currently part of.

George Beattie, president of the the Police Officers Association, said in a statement that his union would drop its arbitration over officers taking a 10 percent pay cut beyond this year if the city accepts the proposal.

According to Mayor Reed, San Jose is facing an “11th straight budget shortfall, and this time it is projected to reach $78 million to $115 million or more absent significant fiscal reform.”

Click Here to Download Union Proposals on the City’s website. (Scroll halfway down the page for proposals on issues for each particular union.)

Josh Koehn is a former managing editor for San Jose Inside and Metro Silicon Valley.

46 Comments

  1. Even with all of these concessions, Mayor Reed is still playing his “it may not bee enough game”.  How much more blood does he want?  He might as well call his fiscal emergency now because then is going to end ugly as he drags this once proud city down.

    All I can say to current employees is leave while you still can.

    • Keep dreaming, this city is a sinking ship.they are willing to sacrifice PUBLIC SAFETY,JOBS,& EDUCATION, for their own agenda.The Giants will never (& should never) relinquish their rights to the southbay.Why dont we try getting all of the necesary services back to where they should be before we waste monies on luxury items. thats just common sense,something that this Mayor& Council are severly lacking

  2. Rather than “half-billion,” it should read “half-baked.” cost of living rises should be pegged to inflation rate…employess have been getting automatic 3% bumps, when inflation was around half that.  Only way out is for a citizen led ballot initiative where public employee pensions shift to 401Ks, like the rest of us.  (odds of this happening are long, as the people of San Jose are not active).

    • these pensions were agreed to by city councils in lieu of pay raises.  Change the systems for new city employees (if the city ever hires again) but leave existing employees out of it.

    • Actually the proposals all call for cost of living allowances (COLA’s) to be based upon Consumer Price Index with a cap of 2%.  Over the past 11 years this would have reduced the COLA amount by half of what it was.

      • The COLA’s used to be tied to the index.  Guess who proposed that they sit at a fixed 3%?  No, not the unions, the city.  When the index was up at over 4% the city boo hoo’ed that they were paying way too much in COLAs.  Despite the fact that a historical view of the index showed that it rises and falls from highs of well over 4% to a low of just over 1%, the city just couldn’t wait for it to dip. So, the city proposed that it sit at 3% all the time instead of rising and falling.

        At the time they did it, it was actually somewhat of a pay cut for pending retirees as the index was high.  But, as with any negotiation you give and take.  The unions took other benefits in exchange for actually lowering their COLA payouts back then.  Now that the index has fallen, all of a sudden that 3% seems like a boondoggle.

        Capping at 2% would limit costs going forward, but for whom?  The employees already contribute a portion of their retirement payments towards the existing COLA.  Perhaps the employees would agree to a cap if their payments dropped as well.  Since the PD employees pay 2.5% of their contribution to the COLA, and the city pays .5%, will the city agree to lower the employee portion to 1% and the city picks up the other 1%?  If so, how is that saving money if the city increases their contribution?  Or perhaps the greedy city is proposing that they just quit paying into a COLA fund entirely. Maybe they want the PD employees to pay 2.5% ongoing and they can just pocket the .5% over the 2% cap.

        Perhaps this is just another way to further reduce the attractiveness of working for the City of San Jose by eliminating all those positive things that public service brought.  That will work, keep all the negatives about public service and remove the positives, that should attract a lot of quality candidates.  Lower pay below the public sector, provide the same or worse retirement benefits, remove the ability to negotiate for higher wages, publicly vilify your employees in the media every chance you get, lay off employees at the drop of a hat, etc.  Yep, I can see the quality of public service just soaring with all those reasons to work for the city.

        • Amen my brother, well stated!  But Chuckie and council could care less about us and current city employees.

          Still want to hear what Chief Manager salary, retirement, pension and buy out of her sick, vacation, and OT will be.  Nice package I’m sure.  And lets not forget her current free take home car, free gas, medical and dental and God knows what else.

          And then there is is the city council and Mayor.

          Please stop the bleeding!  And blaming hard working city employees.

    • The proposal states that cost of living increases are pegged to the inflation rate. And even better, there is a Maximum of 3%. So when the cost of living goes up more than 3%, increases in pensions are capped.

  3. Lets translate Chuck Reeds quotes from the mercury news: Chuck- “the question is, how real are the numbers”. translation-is there enough money for my stadium and my boyfriends Tom McEnry, Sobrato and Barry Swensen?  Chuck-“But whether it’s big enough remains to be seen.” Translation- But whether its big enough will be decided after my boy friends review it and see whether they get their share.

  4. Mayor Chuck Reed said in a staement he is looking forward to seeing how “our actuaries and financial experts analyze the fiscal implications and potential savings contained in the proposals presented today.”

    Translation:  I don’t give a damn what they are proposing, I’m going for the kill….AKA Unions.  More measures on the ballot so he can claim it was the will of the people.  See you in court!

  5. Look at how much Reed has spent on Reed stadium,, as I count 5 million on land, another million on studies.  Look at wall street the party maybe over

  6. I am looking forward to seeing how our actuaries and financial experts analyze the fiscal implications and potential savings contained in the proposals to replace Mayor Reed and City Manager Figone.

  7. Now this is the way you negotiate, a compromise on both side without dictating a doom and gloom image. mayor weeds way or the highway is not the right way to approach this. I like how they give options and specifics, unlike weeds layoffs and pay cut approach.

    I hope city officials are smart enough to actually read this and not say it doesnt go far enough.

    unions rule, city officials look like fools.

    • yeah………..NO! hate to burst your Bubble! Obviously you havent seen or heard “the Cities” Proposal.They Absolutely refused to even look at the offer made in good faith by the unions(P.D.& F. architecht,engineers,& others)they (the City) sent out their proposal(FOR THE NEXT BALLET INITIATIVE) Does That sound like a “good faith negotiation”???This city is not interested in what is right,fair or just, it is only interested in pushing/forcing its own agenda.Our own Pathetic city council along with the dishonorable Mayor Reed and dont forget the dispicable city manager,are killing this city.The very workers who who helped make this once great & Beautiful city…..are being blamed for its very downfall.We used to be one of the safest cities in the country……….huh, wonder where we sit on that list now.  I also wonder what “the Ballet initiative ” is truely going to cost this city, with all the lawsuits that are sure to follow,this will be contested for years in the courts.If this city was a private company;the Mayor, the City Manager& city council would be going to prison for what they have done & for what they are about to do.What kind of employees do you think this city is going to attract when the employee already know the city does not care about them?? Why would the employee care?? As for the current employees, they do not deserve the injustice that is about to unleashed on them.Alot of them are already leaving for employment with other cities, this will not only continue, but will escalate.I cant say that I blame them.  The Mayor has said ” lets see what the actuaries and financial gurus analyze the offer “LIES ,LIES ,LIES ……………….his plan is already in motion for the next Ballet.This Mayor doesnt want to hear or be reminded that He had a say in EVERYTHING that occurred in this city for the last 12 years,or that he approved the bump in pension for NO RAISES!!Future Employees ,residents of San Jose , BEWARE this city has no intention of ever keeping their word to its employees, and like a snake in the grass it will do whatever it takes ,whatever the cost, to keep from fulfilling its obligations

    • I envy your optimism. Like you, I thought the unions’ offer was a viable sign of progress, but when I read the mayor’s responses to it (and admittedly, the Murky Snooze isn’t a trustworthy source anymore) it doesn’t appear as if Mayor Reed is interested in coming to any agreement at all. It seems like Reed has lapsed into the role of his training: an attorney who is trying to win his case with a jury by not altering his position or argument, regardless of new evidence or information (putting his energy into keeping it out of the courtroom). Sadly for San Jose, it seems Reed has not matured into the leadership role required of a big city mayor today, or displayed the traits of a visionary leader who must balance the needs of multiple constituencies and consistently take the high road of impartiality and fairness to all.

  8. I could swear that I read somewhere on one of these blogs that the city of San Jose Has a triple AAA credit rating……..even higher than the Federal Government ,. with at least 2 BILLION in reserve. If this is true How can this Mayor declare a state of fiscal emergency.I understand and truely believe that there has to be pension reform , but I also believe that it is dead wrong to put the blame/burden on the city employees.  I believe that it is increasingly apparent that this Mayor,City Manager, & City Council have an agenda , and that agenda is the same as Wisconsin’s, to destroy the working class . I have been talking to my kids (junior high & High school) about what is going on here in San Jose.( and encouraged them to study & do their own research, ask questions)How do you explain to your kids that not everybody has integrity,honor,character???most parents teach their kids dont lie,cheat or steal……..but then they see the City(mayor,city manager,council) do just that, with no consequences.They are seeing for themselves that the city is not interested in being fair, they are only interested in imposing their will.The one positive lesson that my kids have learned is “dont stand on the sideline and complain,get involved & make a difference

    • “It is one of the few cities in America with a triple-A rating from Moody’s and Standard & Poor’s, but only because its bondholders have the power to compel the city to levy a tax on property owners to pay off the bonds. The city itself is not all that far from being bankrupt.” -Michael Lewis

  9. Interesting and impressive proposals on the surface.  Gotta download and review them to dig into them more, but I gotta say I’m real impressed with the public safety and allied unions reps taking the initiative in breaking the gridlock and moving towards a palatable future vision for the city.

    • I took an $18,000/yr cut in salary to come from the private sector to the public sector and I am so sorry. I chose to come to the City because I truly wanted to work with the citizens. I USED to love it. The City is no longer the employer of choice and I am leaving and going back to the private sector.

  10. Why is the retirement Association even at the table offering concessions the city is not even asking for?  They are not even an approved bargaining unit to represent the rest of us. What is up with that!

    • “Why is the retirement Association even at the table offering concessions the city is not even asking for?  They are not even an approved bargaining unit to represent the rest of us. What is up with that!”

      Excellent point.  As an retired outsider interested in the rights and plight of seniors it appears SJ retired fire of police org is rolling over and waving a white flag just on intimidation. It’s heartrending to see once brave and fearless of SJ conceding without a fight.  If you are not willing to defend your rights please stop embarrassing yourselves, cease whining and go feed pigeons at the park.

    • Actually,the city has put in their draft ballot measure to reduce current retiree COLA’s down to CPI capped at 1% forever, eliminate SRBR and make the lowest cost health care plan a high deductible plan that would cost retirees thousands of dollars more per year….the police and fire retirees have offered to reduce their COLA’s to CPI capped at 2% for a 5-year period to assist the city and not get hosed on health care and srbr.

      Although not a bargaining unit the association has a large amount of money that they could sue the city with….they would not sue if the city agreed to this deal.  That is up with that!

  11. I was interested in learning more about the City’s ballot proposal so I asked for information. I asked for two categories of information:  1)how much it will save the city to simply raise the retirement age as this has been expressed to be a solution to solve social security so maybe it would solve or significantly assist here too without all of the other upheaval in the plans and 2) the actual cost to the employee of each of the alternatives. This is important so I (and everyone else) could know the actual impact of what we may be voting for to the employee. 

    I expected that the City had analyzed both of these issues prior to submitting such a drastic proposal to the public.  But I was told that the City does not have information on either topic.

    I am appalled that the City expects its citizens to vote on something that it has not fully analyzed, cannot break down for its citizens as far as savings of the various components of the proposal and cannot provide them with some basic information on what they will be imposing on its city workers if they vote in favor of this.  Even if they assume the worst case that only a handful of employees opt in for the new program then they should certainly have those figures as to the average cost this will impose. 

    This is all information that the City should have analyzed PRIOR to asking the citizens to vote.  It should know the consequences of its actions on its employees and whether only implementing certain aspects might save sufficient funds. 

    This is truly crazy and certainly not a transparent form of government that the Mayor and Council allegedly pride themselves on. 

    If the City can’t analyze its own proposal do you think it will be able to analyze that of the unions.  I don’t think so.

    • thanks for posting the link.  Vanity Fair did not fact check.  A review of SJ’s budget shows that the fire and police do not “now eat 75 percent of all discretionary spending.” Also, the Mayor’s disdain for the public safety worker shines through.  It obviously clouds his judgment. 

      If there is such bias in the arbitration process why has he not, before now, been screaming about it despite his 10 years on the council. 

      Also, he objects to taking sick leave pay outs.  That is part of the contract he made. If he did not pay sick leave at the end of a career, he’d be paying overtime now.  It is a benefit. If an employee is not sick it saves the city money. It sounds like he has sour grapes that folks tough out being sick which save the city money in overtime expense.  Get over it Chuck.

  12. Reed already has a contract with a law firm for the ballot measure ,,, $500,000 ..

    2010 they spent over 5 million on land for just a pieces while obtaining grants for more. Maybe you should look at who is holding the land and how much they are profiting from it?

  13. @Retired

    You made pertinent your question by pointing out that the retiree association is “not even an approved bargaining unit to represent the rest of us,” but here is a second question: with whom are they negotiating? Neither Chuck Reed nor Debra Figone represent or control the pension fund, primarily because the money does not belong to the City. That fund is managed by an independent board, one which, to date, has issued no threats to sue its members, demanded no refunds, nor—significantly, made any indication that its contracts with individual fund members are unenforceable. Maybe its time for retirees to demand from the board an official statement as to its position on the sanctity of its contracts, the City’s authority (or lack thereof) to alter them, and the right of any collection of fund members to bargain away an individual member’s existing benefits.

    Chuck’s chutzpah here ought to be taken as a warning to anyone hired to build, staff, or play ball in the proposed baseball park: the City of San Jose won’t let a lack of legal standing keep it from utilizing strong arm tactics for political means. As long as it owns the land underfoot no contract will be safe from the threat of malicious and costly litigation. Major League Baseball may honor contracts, but this city does not.

  14. I find it amazing that the unions—or anyone else, would even consider negotiating with the City. How is it possible to define rights and obligations with a party that has demonstrated its willingness to dishonor existing contracts or pay for work already done? The City of San Jose has no standing at a bargaining table, no credibility, no honor. How is a deal inked this year any better than those of past years? What reason is there to expect that, one, two, or three years down the line the City won’t once again default on its word, once again stoop to extortion (by threatening to bankrupt the unions through court costs), once again wage a hate campaign against its employees?

    The irresponsible race-pandering clowns long in charge of this city have come full circle; the city they run now demands affirmative action status for itself: freedom from its obligations, freedom from blame, media-approved victim status, at war with the cops, all without sacrificing its right to some bling, in this case a ballpark for its favorite homie.

    Chuck Reed, just another irresponsible baby-daddy.

    • As usual you’re right on point BSM. I suppose our negotiating team at the POA believe they have no other choice in this enviroment but to hold their nose and bargain with the devil (aka Reed). Even this latest offer, which boasts an opt-in “reformed” pension program, is voluntary. I am guessing the savings will come when it is imposed on new hires, IF this city ever decides to hire police and IF recruits are foolish enough to come work in this city. Once at top of top of the power rankings in police effectiveness and reputation we are now in the basement.

  15. ““I am appalled that the City expects its citizens to vote on something that it has not fully analyzed, cannot break down for its citizens as far as savings of the various components of the proposal and cannot provide them with some basic information on what they will be imposing on its city workers if they vote in favor of this.”“

    That’s because it’s all BS. Smoke and mirrors for the citizens of SJ to vote on what they want you to vote on. Actually, what you will be voting on is illegal. They have been told this by many…even by attorneys, but they choose to ignore everybody, hoping the citizens will fall for their BS and vote on it. They must think the citizens of SJ are stupid, but your post shows you are thinking.

  16. The author of this article is dead wrong about any city employees being CAL PERS.  Yep, thats right, the city council are the only ones in the CAL PERS retirement fund. Funny how that works.  Just another scam by the mayor and city council

  17. Refer: Read the ballot measure
    & BS Monitor @Retire

    A draft ballot measure is still intimidation until it comes to pass.  If your association has the wherewithal to sue then sue instead of acquiescing.

    Nature’s attrition will have its toll on older retirees by the end of your 5 year period thus alleviating some of the city’s concern.

    The new SRBR proposal is unfair to all retirees, without a finical examination of each retiree how can you accurately determine who’s most needy? 
    ———-
    BS Monitor brings up interesting information, can someone give further details and verify the retired association is aware of this.

    If you plan to feed pigeons in a park go to a neighboring city where it’ still safe for   senior citizen.

    • we will all die at some point, just send me my checks until then.  My 64K a year minus my 235 a month medical, plus dental &vision; almost makes my out of town house payment.  I am so glad that I served you for 30 years.

      • I hope that the associations jump on with Orange County.  We won’t have to re invent the wheel.  wait that sounds to hard for the associations.  kneel down an kiss the Reed Ring.  We used to say NEVER GIVE UP.  Now we say WTH take it!

  18. In this Mornings Toiletpaper(Mercury News) its stated that the cost of living here in Santa Clara County has gone up 18% since 2008.Yet the Dishonorable Mayor Reed,the Dispicable Debra Figone, and the selfserving City Council are trying to cap the COLA @ 1% , and then they wonder why most city employees do not live here. This is the most ungrateful city around……………no wonder more and more city employees and Residents are leaving this dump of a city

  19. I read an article that stated it takes an income of $71,000 per year to be able to live comfortably in San Jose. That was years ago. Many City employees do not make that salary or are just right at it. When they reduced the salary, that left many not being able to make it in this City. I’m with the others. I can’t wait to move away. I use to love this city, but what I see now is ugly.

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