Mayor Taking Fiscal Reforms to Voters

Declaring a fiscal and public safety emergency, Mayor Chuck Reed unveiled his fiscal reform proposal Friday afternoon at City Hall. The reforms will focus on pension and health care for current and future employees, and some actions will require changes to the city charter, meaning measures will need to be put on a ballot for voter approval. The proposal being put forward was co-signed by Vice Mayor Madison Nguyen and councilmembers Sam Liccardo and Rose Herrera.

“The dramatic impacts of the budget shortfall on our community demonstrate why we have to gain control over skyrocketing retirement costs,” Reed wrote in the memo. “If we act now, we can preserve the retirement benefit levels our employees and retirees have earned and accrued, and we can restore jobs and vital services. If we fail to act, jobs and services will be decimated in a fiscal disaster and retirement benefits will be cut.”

The proposal includes:

- Capping the city’s contribution to retirement benefits for new employees at 9% of base salary and 50% of the total cost.

- Raising the age at which employees can receive full retirement benefits to: 60 for sworn public safety employees and 65 for all other employees (phased-in for current employees)

- Raising the eligibility for retiree healthcare benefits to 20 years of service (phased-in for current employees).

- Limiting current employees’ pension accrual rate to 1.5% per year for any future years of service (benefits earned and accrued to-date will not be reduced).

- Limiting the cost of living adjustment to a maximum of 1% per year and restricting bonus pension payments to retirees.

San Jose is currently in the 10th straight year of having a budget deficit. The estimated shortfall for the upcoming fiscal year, beginning in July, is $115 million, and the city’s unfunded liability for soaring retirement costs could reach $650 million by 2016.

“Some people believe that the pension crisis is imaginary, that we have only to wait until the market goes back up and we’ll be fine. That’s simply wishful thinking,” Reed wrote. “The $155 million payment to the retirement funds the City made this year was not imaginary. The $250 million payment the city must make next fiscal year is not imaginary. The hundreds of jobs that were eliminated this year were not imaginary. The hundreds of employees who will lose their jobs in the next fiscal year are not imaginary.

“Such erroneous characterizations of our fiscal crisis demonstrate why it is necessary to take these measures to the voters to allow them to prevent a disaster.”

Click Here to Read Mayor Chuck Reed’s Fiscal Reforms Proposal.

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

100 Comments

  1. Here comes the class action, unfair labor standards and deprivation of rights law suits. Millions in court costs and legal fees that will waste more tax dollars we cant spare. unfortunately for Mayor Greed, even his ego cannot over turn the state supreme court which has already determined the Meyers-millias-brown act is lawful and binding.
    What he Should do, to save taxpayer money and work toward a solution, is to actually meet with the unions rather than have Alex Gurza deny every idea offered without actually considering them. It’s time for the unions to make concessions but it’s past time for the Emporer…I mean Mayor, to be an adult about the situation. He has lost sight of what’s important, getting city finances under control.  Instead his ego and future aspirations have put him into a place that is unworkable. Only we residents of San Jose will be hurt by his childish behavior.

    • Yes, I remember, when I was laid off by Susan and Les in 1992. There was no animosity by any, just sadness. But now, what an awful world Charles has created. When I had the copy of the Metro with his mug on the cover sitting in my cubicle, more than one employee visiting me turned the paper over, they could not bare to see it. Total contempt on both sides. A very sad and unnecessary situation.

  2. He declared fiscal emergency but they are saying they hope unions will come in with proposals, which was their goal, all along. That is what this tactic was all about. He is once again doing his thing to get the public riled up and bullying so everybody will start shivering and give him what he wants. They know this is illegal, but they put it out there, anyway. How dishonest is that? Really says something about their character. I hope the other council members have better sense than to vote this in. I see big law suits and lots of taxpayer’s money being burned in the court system. I bet taxpayers are going to love that. City doesn’t care anything about wasting the taxpayers money. They have shown that side, already.

    • Isn’t it shameful that this is the tactic needed to bring the unions to the table? 

      Shameful not for the Mayor but for the unions.  Their leadership claims that the budget shortfalls are imaginary, but the mayor is right, the deficit and the reduction in serices are anything but imaginary. 

      The union leadership is on the wrong side of this argument they do nothing to endear themselves to the public by costing us more money in elections and court battles.  So much for getting public support when it comes times to decide.  You’re sealing your own fate. 

      My prediction is that Mayor Reed rides this wave to easy victory.

      • The unions DID offer up the 10% he asked for…they rejected the contract and now say it wasn’t enough. Don’t you see a pattern here. He asks for something and when it it given, he says it’s not enough and then asks for more. Bait and switch.

  3. Mr. Mayor, before you make any changes to pay or benefits, first contract city services to those mandated by city charter. I am sure that many employees can be transferred to charter departments and bring them up to full staffing. Of course, the two exceptions to this are the Fire Department and the Police Department. After the the city’s charter departments – and therefore YOUR primary responsibilities are fully staffed, then think about laying off the remaining employees. This may sound harsh, but really, the issue is one of whether or not the city has any business maintaining those other departments. I would argue that they never should have been started in the first place and therefore should be the first to be eliminated as available positions.

    If, after doing that, you still can’t pay the remaining employees a competitive pay/benefit package, let’s talk turkey. Otherwise, if you get your way, you’ll be hemorrhaging employees – and especially public safety employees – so fast, your head will spin.

  4. History will not be kind to this Mayor. REED is rabidly spearheading a crazed, almost bloodthirsty, dismantling of the SJPD and SJFD. Meanwhile, crime will begin to thrive again and gangs will know a freedom this summer they have not enjoyed since the early 80’s.

    • You think that maybe he is having senility issues? Makes you think because this is only going to cost the City more money with everything hung up in the courts. I don’t understand his thinking.

      • Susan Hammer was a responsive and thoughtful Councilwoman. Upon running for Mayor she started slinging false mud at her opponent. Ron Gonzales helped save whole Sunnyvale neighborhoods from the RDA wrecking ball. You know the rest. Chuck Reed was a independent and forward thinking councilman. The point is simple. Power and glorification corrupts, not only the heart, but the mind.

        He ran on a platform of transparency and teamed up with the Leadership Group, Chamber, KLIV, the Merc, etc., with a return favor of adulation. Presented suddenly with a market crash, the new hero, in his own mind immediately needed to deflect blame from the Council and Mayor, and with Debra massaging the facts, to stir up this anti worker campaign.

  5. How much can we expect the law suits to cost us? As a taxpayer, I am really worried about this. I don’t agree with all that the employees are getting but I think Mayor Reed is going too far.

  6. WOW! nothin more depressing than having to watch a crew of 60yr fireman trying to wear 100lbs of gear and then trying to move hundreds of pounds of hose line through a house. And then if that fireman was hired at 20yrs, they been doing the job for 40yrs, I am sure all those years have not taken a toll on their body. Get real Chuck, You are driving this city into the ground! But obviously you dont care.

    • At the most, the age limits should have been moved up to 55 for police and fire and 60 for all others. For him to have been a lawyer, he has such a pitiful mind. I wonder why he doesn’t think well, or is he listening to advisors? As old as he is, I wonder if he could imagine what he would feel like, at his age, having to do that work. Anyone working in the field would have a very hard time at those ages. It would be easy for an office job, such as what he has, but anyone else would have difficulty. Maybe that is why they are changing the workman’s comp amount of time off a person can use, without being separated from the City. He knew this was coming, so he needed to adjust that, first. What a slimey person.

    • Stop sniveling.  Many of our aged out cops and firefighters retire in San Jose then go work at other departments in the state.  They double dip with none of the “we’re-too-old” worries. 

      The early retirement is a scam.  They jack up their pensions, then all retire on a disability.

      Make ‘em work for it like everyone else.  If they can’t do the job (carry equipment etc) then they should be fired.  Job performance is still necessary to rate.  Either you can do it or you can’t but we shouldn’t have to pay for it even if you can’t

      • That’s EXACTLY what you are going to do once you truly realize how bad you all are getting ready to be gang banged. You helped him pass V and W…gang bang. Employees are leaving like you wouldn’t believe. It even scares me. I’m left behind and I’m wondering how we are going to function. Pretty soon, he won’t have to lay off anybody. Their fleeing already. Aside from the loss of benefits, it is getting really scary internally. We will be working on a string. I just don’t know how we are going to do it.

  7. Let me know how effective a 60 year old police officer and firefighter will be in an emergency…these poorly thought out ideas will place all of our families and public safety at risk.  Sixty year old fireman will not be able to carry you out of a burning building!  Sixty year old police officers will not be able to chase the robbery suspect down the street!  Sixty year old police officers cannot break up a violent gang fight or conduct crowd control.  Which sixty year old fire fighter will climb onto the roof first?  It is time to apply some common sense logic to solve this problem and start thinking about public safety and our citizens first!  Our children deserve a better future than this.  I doubt economic development is going to improve if this is the best we can do?

    • If they raise the retirement age, one thing is for sure, service connected disabilities will skyrocket.  Which means, the city of San Jose will be paying for the service rating (thousand of dollars for each percent), plus legal fees (for the officer or fireman), plus free medical for life (for that injury $$$$), and they (officer or fireman) would be able to retire at age 50 anyway with a portion of their pension being tax free.

      No cop or fireman wants to leave that way, but when they do, the city eats it for a long time.  Best thing for cops and fireman is to hire them young and get them out the door before they are too banged up. 

      City leaders aren’t so smart.  They are short term thinkers with problems that require long term solutions.  Fire gave concessions and police are trying to negotiate pension reform (yes, you heard that right, something long term), but Reed wants to go to the ballot and have voters vote on something he can’t enforce (and has been ruled on, something like case law).

      Sounds like the pot clubs that fell apart, oh yeah we voted on that too.  I guess just because its on the ballot doesn’t mean its legal.  Seems like the feds have a little issue with Reed’s “plan.”  The Oakland city council already have been warned by the district attorney not to cross the line.  Reed, listen to the city attorney.  They’re there to try and make all your ideas fly, but when they don’t recommend something you probably should listen.  I hope San Jose heard that warning too.

      Vote accordingly.

      • Haven’t you been paying attention? The Mayor and councel are, as I write this, changing the disability retirement rules. They are not dumb! I think they are gonna work their employees into the ground, then throw them on the scrap heap when they’re done!

  8. This is totally illegal-Mayor Greed knows this so the real question is-why is he doing this when they know it is illegal?

    • He is trying to scare/bully people into doing what he wants. That is the way he does things. He KNOWS this is illegal. The timing of this release is questionable. He is putting it out there to try to scare everybody into giving him what he wants. I don’t think he realizes that we are much more intelligent than that. The City hires the best and the brightest. We aren’t dummies. This will not fly. All he needed to do was check case law and he will see that there are already precedents—rules against challenges. We will fight this. What a poor excuse of a human being.

    • Mayor Charles Rufus Reed is 62 years old.  He should be thinking about his own retirement instead of trying to mess things up even more than he has during the past 10 years!

      Rufus’s illegal plan comes from Measure V: “If a court were to find that any part of the revised Charter section is not valid or enforceable, there would be no compulsory arbitration for Police and Fire.”  Then Rufus will be able to twist his pension reductions (he calls it reform) into whatever program he wants.

  9. Bravo to Mayor Reed, Councilmembers Liccardo, Nguyen, and Herrera!

    Finally a team with some balls at city hall.  Make the hard choices and lead the city out of this budget mess.  Don’t worry about all the union cronies posting here, the REAL citizens of San Jose are behind you. The residents have shown at the ballot box before that we want, need and support the reform.  Go Chuck, go!

      • Not only not from the 18th floor I had to look up what that reference meant so that means its far more likely that YOU are a lock stock and barrel owned union hack.

        See ya on the unemployment line!  Hopefully you’ve saved up your pennies.

        • “See ya on the unemployment line!  Hopefully you’ve saved up your pennies.”

          You are hilarious. So childlike. That’s cute!

    • Union cronies?  We have no mafia teamsters running the few City bargaining units!  The unions representing your City’s employees, who’s job it is to keep your city clean and safe, are run by the employees themselves.  Your so-called heroes are greedy criminals who got us into this mess by creating and agreeing to poorly thought out fiscal plans and shirking responsibility.  Start at the top and work your way down!

      • Yep Union cronies.  Like the ones that keep getting quoted in the Merc for saying the pension shortfall is imaginary.  I’d check the credential of those folks, did they even graduate from high school because how your union leaders think 450 million dollar shortfall is imaginary is almost criminal.  But then you all elected them!

        The citizens of San Jose elected Mayor Reed and some of us (the majority I’d guess) are pretty damn proud of how he’s coming hard at the budget crisis)  He got our support for Measure V & W and overwhelmingly for his own re-election. 

        Writing is on the wall but then maybe you’re a HS dropout and can’t read it.

        The greedy criminals that got us into this mess are YOUR UNION BACKED COUNCIL MEMBERS who voted for contracts that were unsustainable.  Want to blame someone?  Call upon Former mayor Gonzalez, Cindy Chavez, Nora Campos, Manny Diaz.  As for criminal the two that spring to mind on the current council are DUI boy Ash Kalra (also in the union pocket) and MACSA embezzlement czar Xavier Campos (a union cronie if ever there was one).

        Good job choosing your leadership!

    • so I wonder if this “budget mess” means Mayor Greed won’t be putting anymore of your tax dollars into buying a new stadium for his professional sports. Yeah, you’re right-go Chuck, go-and why don’t you go right along with him-to another city.

      • Nah, I’ll stay here.  I have a job.  Most of you union folks don’t live here already and many of you are in foreclosure.  Yeah, check public records and match them up against the union leadership and members from public records (all on the Merc lists with the top city salaries)

        Its pretty enlightening to see how many “top” city union money grabbers don’t live in San Jose or pay taxes here or have mismanaged their personal finances to the point of foreclosure and bankruptcy. 

        Sour grapes on your part should be directed at the folks you backed in the elections.  Xavier Campos, Ash Kalra they can’t do crap for you because they have their own legal issues.  Besides being non-effective. 

        Chuck Reed is the best mayor we’ve have in decades.  Go Chuck, go!

    • remember the mayor approved for all the union contracts. Ask him what the council gets in their pension, just the same or better

      • Yep you’re right.  I blame Mayor Gonzalez and that hack Cindy Chavez for the majority of the mess we’re in.

        You all should go demand reparations from them.  Oh wait, you still bow at the altar of Cindy Chavez for union/labor leadership.

        HAHAHAHAHAHAHAHAHAHAHA

      • The Mayor and Council get the Cal-PERS retirement. So they can change San Jose’s retirement and it doesn’t effect them at all. I also think they don’t pay into PERS, the City pays their share. Hypocrites.

      • This story line to try to blame Mayor Reed for all the contracts is rediculous.  He may have been on teh Council, but the labor backed Council in the early 2000’s gave away the City to the Fire and Police for their political support.  A 3 year 25% raise to Fire and an extra 5% to PD after they got a 3 year 18% raise.  Thank Mayor Gonzales for most of it.  There have also been arbitrations for Fire that awarded large amounts that Mayor Reed as a Councilmember was not resposnbile for.  Thank him for passing measure V to get some equity in the arbitration process that was heavily loaded on the side of labor.

      • Yeah let us see.  Who cares?  He’s not going to make or break the system.  He took the same advantage that too many have.  If he gets a reductions, then so be it.

        People are sick and tired of paying for excesses for others when we’re strapped. 

        Play all you want with your own money but leave our tax dollars in the hands of people who will guard our services and not your pensions. 

        Chuck Reed is a local hero.  Deal with it.  His numbers at the polls show that more people agree with me than with you.  Deal with it.

        • “His numbers at the polls show that more people agree with me than with you.  Deal with it.”

          The “people” are starting to take notice and to wake up. They are starting to see him for what he truly is…and it isn’t a hero. They are starting to see him as someone who is tearing down this city. Watch. I was in the grocery store after work and still had my employee ID attached to my clothing. I had two different people in the store approach me and tell me they were sorry and that what Reed is doing is not right. Yes, they are taking notice.

    • Whoever you are…you are not any HERO…and if you look closely, you stand ALONE.  You are just part of the “smoke and mirrors” campaign.  Time will tell who is really telling the truth in this whole fight. Truly I am really tired of the front line employees being the scapegoat for the Cities fiscal woes.  There should be a more OPEN look at the top heavy city government and who get paid what, and what dept has had the same cuts as all the rest of the “front line” dept/employees who deal with all the day to day business!!

    • I am a real Citizen. Born in San Jose fool. I have followed City politics since I was a child with an activist Grandmother discussing City Hall at the dinner table. I am a member of AEA the engineers and architects union. It was formed with an initial majority totally against the idea of unionizing professionals. But with our backs against the wall, ignored at every budget cycle with frozen step increases and COLA’s we caved in. In other words, we were forced to unionize due to an indifferent Council and the sheep that vote. Remember with every campaign its all about influence and polls with virtually no real platform information from our local rag.

  10. Youare incorrect youngster. I voted for measure V and W. I was told it was crucial. I was lazy and did not educate myself onthe facts. I regret that decision. Six months later and it has not bettered my quality of living here in south San jose. Now the mayor expects me to believe this new idea won’t end up costing me like measure I did in 1996?
    “city council heroes” I will share a well known phrase with you. ‘those who do not know history are doomed to repeat it’

    • Thats a very good observation Mr White.  Part of San Jose political history is a slate of union backed council members and mayors giving free reign to union leaders at contract time. 

      In times of financial prosperity we all lived well but those times have changed.  Unfortunately there need to be cuts.  Services can only be cut back so far before having a detrimental effect on the city.  Pensions and payouts are extreme for city workers so it makes sense to limit those.  There are other expenditures that city residents would support (like not funding the Hayes Center, Mexican Heritage Plaza, city festivals etc) but they have to be proposed so we can support those. Unfortunately (for city workers) many of the people who champion those causes are the same union backed council members who dont want to cut anywhere. 

      The budget woes are not imaginary as the Union president says, they are very real.  Float another solution if you don’t like this one.  Mayor Reed should be given credit for putting a plan forward even if its mean spirited and restrictive.  At least its a plan.  Thats leadership.  If you have leadership on the other side, let it come forward with a viable plan the public will rally behind. Otherwise prepare yourself for defeat in November.  It really is that simple.

  11. If the unions do not like Mayor Reed’s proposal, they need to propose a viable alternative to San Jose residents.  All we have heard recently is union president Yolanda Cruz declaring the financial crisis “imaginary” in the Mercury News.

    • I couldn’t agree more Steve.  If the unions have a better plan, put it forward.  If its fair and reasonable I am sure they will have no trouble getting the support of the tax paying public.  We have no vested interest in “screwing” the city worker.  So present a better plan and you’ll have our support.  If you don’t have one then elect new leadership to deal with the defeat you’ll face in November. 

      Mayor Reed has a plan.

    • Six Unions have given the City a proposal on retirement. We were told the City wasn’t ready to discuss it. Hence the side letters in our signed contracts. Below is the link for our proposal:

      http://www.sanjoseca.gov/employeeRelations/CoalitionNegotiations/2010-2011/3.4.11CoalitionSettlementProposal.pdf

      We first gave this proposal on February 23, 2011. Three months ago. Yet the Mayor still says we aren’t willing to talk. He lies. We have solutions, they don’t even want to participate in discussions with us.

      This proposal even included a 2-tier system for current employees. Fire offered this proposal this year and over a year ago. Interesting how that doesn’t make the news.

      Employees are willing to make concessions. Our Mayor and City Puppet (Manager) have their own agenda. It’s not about true bargaining.

  12. So, I can’t wait to see if Councilman Constant abstains from voting on this issue due to a conflict of interest seeing as he is on a DISABILITY PENSION FROM THE SAN JOSE POLIC DEPARTMENT.

    • there is something that states (paraphrasing) if what they propose becomes or is found to be illegal, then…

      He KNOWS that it is illegal but they are saying if this happens (illegal), then that happens (we will do it this way). It is just a way for him to try to incorporated the resulting part of the proposal…the “then that happens” part of it. Read it and see what you interpret.

      I’m not quite understanding the 6month thing. Can someone explain with an example? Thanks.

      • Example: I am 52 years old and could (in a perfect city) retire in 4 years. Each year is worth 6 months, so 4 years = 2 additional years tacked onto when I can retire. Now instead of being 55 when I can retire,I have to work until 57. It will take 10 years before all employees are switched over to age 60 being the new retirement age. That is how I interpret the 6 month thing but I could be wrong. This way we work into the 60 year old age limit gradually. It totally sucks-I used to love working here, now I can’t wait to get the hell out. Moral for everyone is at an all time low-we thought we had a contract and now Mayor Greed says there are no contracts with any one. Sounds like going back on his word and union busting to me.

        • I’m assuming your 4 years would get you to 15 years, right? What if you were already older than 55? How would that work? There were two things listed. 6mos each year on age and 6mos each year on the years of service credit. So if you were already older 55, would you still have to tack 4 years onto whatever age you are? I guess I’m really confused. Lastly, it says “Starting July 1.” but it didn’t say what year. If they put the ballot forth in November, I would assume it would take effect July 1, 2012. Hope I haven’t confused you, too. Thanks for your input.

        • Geez-now I’m totally confused too! If you are over 55, my advice is to sit on this as long as you can until it looks like something will take effect-then make a decision whether you should leave. Contact retirement services-they can help alot on questions. It’s just that right now-everything changes daily, making it a pretty depressing place to be when you are trying to figure out your future for yourself and your family. Good luck! It may get tied up in courts for so long that you will be able to get out unscathed.

  13. Mayor Reed says we are in a fiscal state of emergency but wants to spend MILLIONS on a ballot measure, that if passed, may be illegal and end up in court costing the City more millions!Frightening! Makes no fiscal sense to me.

    How about him working directly with the Unions like other cities have successfully done to resolve this? That would be “fiscally responsible,” wouldn’t it?

    He also says if the Council doesn’t vote to put it on the ballot, he will work with PRIVATE entities to get it on the ballot. Who are these private entities he’s talking about?

    I went to the budget meeting in D10. These costs splashed all over the media are PROJECTED costs, NOT actuals. So what is the truth?

    And finally, why is Madison Nguyen championing this attack against the SJPD and other Unions when they put her in office, saved her from a recall, and from barely losing the last re-election campaign? She can’t possibly think we’d elect her as our next Mayor, can she?

    • Kathleen it might be difficult to have a reasonable negotiation with unions when their stance is the problem is imaginary.

      There can be no progress made if they refuse to own up to the fact the budget crisis is real and not imaginary.

      Ms Nguyen probably sees the writing on the wall.  The all powerful unions aren’t so powerful.  Mayor Reed exposed them with the Measure V & W and his relection campaign.  The unions are wearing no clothes!!!

      • Just because the President of MEF who makes over 100K says that, don’t think all unions feel that way. You seem to forget that 5 unions already have signed contracts and who negotiated in good faith. MEF wants a strike, the rest of us DON’T!!

        That being said, the deficit is not as bad as Reed claims. How many times has it changed in the past 6 months. We have a Budget Director who probably can’t even balance her own check book. Do you think Google or Apple would hire someone who can’t make up her mind? Our City is ultra conservative with their numbers.

    • Kathleen,

      This a HUGE MISTAKE for Nguyen. Obviously Rufus Reed has her eating out of the palm of his hand after likely promising to make her his annointed/endorsed successor. After Reed annoints Laccardo she will realized she was duped just like all of the Pro V/W voters are starting to see.

  14. I hope that their declaring fiscal emergency will bring the spotlight to San Jose and the attention of someone looking in to how it REALLY got to this point. Once the attention is here, we can make a little more noise in having the mismanagement of the taxpayer’s money focused on and hope that an investigation will ensue.

  15. I don’t know what to believe from this mayor anymore. As a citizen in San Jose, I voted for V & W, and we lose, anyway. I will not be supporting this mayor when he puts this to vote. I am not happy citizen.

  16. Look people! We all know it is illegal what they are doing so let’s start a recall effort on Reed. And the incompetent Council!  Wake up people it is time for change before this great City is destroyed! Follow me as I start the recall effort!! This is very serious!! Get involved now!!

  17. Class action law suits, with interest. I can’t even imagine how he thinks this is legal. I think the employees should also include punitive damages for the stress. I will be happy to represent.

  18. As the holder of the mortgage on my house, and as a City employee, I am following the City’s leadership.  I feel it is important that I let you know that I am DECLARING A FISCAL EMERGENCY.  I know that I agreed to pay you over 5% in mortgage interest over 30 years, but the soaring costs of running a family and commuting to work have GOT to be reigned in.  Therefore, since I am DECLARING A FISCAL EMERGENCY, I am going to arbitrarily change the amount I have promised to pay you over the remaining 20 years of my mortgage.  Rest assured, I WILL NOT SEEK TO RECOVER OR CHANGE THE MORTGAGE INTEREST I HAVE ALREADY PAID YOU.  However, in an effort to reign in the soaring costs of putting food on the table, keeping my children active in programs that will keep them out of gangs and jail, commuting to work (since I cannot afford to live in the City, though I wish I could), and paying my other responsibilities like electricity, gas, and water, I will henceforth only pay 1.5% in mortgage interest.  I am also arbitrarily reducing the amount of principal I wil repay by 10%, even though I promised you more in better times.  Additionally, I am capping the amount I pay every month at 9% of my income, and I am going to cap the amount of interest paid over the life of the loan at 50% of principal.  You can look forward to my reduced monthly mortgage check next montH.  Since I am DECLARING A FISCAL EMERGENCY, there is nothing you can do about it, and you will just have to live with my arbitrary new promises…. Which I reserve the right to change should I feel like DECLARING A FISCAL CRISIS at a later date.

    Yes, it is true that I am the process of adding a second story to my house, designed as the “GRAND CENTRAL STATION OF THE WEST,” and I am trying to buy out the houses from my neighbors so that I can build a BASEBALL FIELD in my back yard – that way my kids to have to ride their bikes across town to go to a game.  But the money I have for those projects are in a part of my personal budget that I call CAPITAL PROJECTS and REDEVELOPMENT.  I intentionally put money into those funds so that they cannot be used to pay for the basics, like mortgage payments, food, utilities. 

    Please respect my DECLARATION OF FISCAL EMERGENCY and don’t take me to court.  Since I have DECLARED A FISCAL EMERGENCY, I don’t have the money to fight a costly legal battle.  Well, I have money, but it is tied up in CAPITAL PROJECTS and REDEVELOPMENT.  SO… If I have to pey legal costs I will have to DECLARE A FISCAL CRISIS and arbitrarily change the terms of our agreement (I guess it’s not really an agreement if I’m arbitrarily changing the terms) yet again.  I would have tried to work WITH YOU to find a solution to my FISCAL EMERGENCY, but I REALLY REALLY want that second story GRAND CENTRAL STATION and BASEBALL FIELD.  so I’d rather just DECLARE A FISCAL EMERGENCY instead.

    If it’s good enough for the Mayor, the highest LEADER in this City, it should be good enough for me.  Do you think my mortgage holder will go for it?

    • The only problem with your plan Mr. Lien Holder is that you sound like an honest person with integrity that ultimately would not let you “screw” someone else out of their end of the bargain. Mr. Reed obviously has no integrity and is definately not honest. I am very embarrased that I live in a city full of corrupt leaders.

  19. I think it’s wrong to balance the budget on the backs of hard working employees. Blaming Police, Fire and other safety personnel for our financial problems is short sighted and wrong.  Whose next, Mayor Reed?  Are you going to blame teachers and clerks and everyone else.  Maybe we should stop spending money trying to get stadiums and focus on basic services. 

    I would like to see the city council, the mayor and his leadership team take a voluntary 25% pay cut to show they are serious about fiscal reform.  Starting leading by example.

    Carol

  20. A recent study published by the Mercury indicates that professional jobs are compensated higher in the private than the public sector. Yes, that applies to San Jose. Mayor Reed’s simpleton one size fits all approach will ensure substandard legal, engineering, IT performance etc. So prepare you wise citizens who think Chuck is your savior. No, he is drunk with the power felt by one lavished with Chamber and Media adoration.

    Compare the 9% or less City contribution and 1.5% to a private corporation’s contribution to Social Security. There will soon be no incentive for municipal employ except those seeking training to move on, and the incompetent.

  21. There have been many many angry calls to recall Reed and Figone.

    Let’s assume, as unlikely as it is to recall Reed, that you are successful and also recall his co-signers Nguyen, Liccardo, Herrera as well as “Double Dipping Pete”  Constant and City Manager Figone for mismanaging city with Reed

    So what will you do then, to balance city budget, which costs would you cut and how would you fix structural budget problem ( too much city costs, $2-3 billion in underfunded pensions and not enough tax revenues ) ?

    You can’t raise residential taxes since voters are unlikely to approve and if business taxes are raised many businesses will join the thousand of busineses who have left San Jose because of very high city imposed taxes and costs.

    So, what do you do after Reed is recalled ?  Anger without workable budget solutions is not a solution as we have seen for months.

    Why don’t you propose an alternative to Reed and Figone’s budget now and prove all your accusations are true ?

    • The solution will be to re-finance all the city’s indebtedness to reduce outstanding payment amounts, and to cease adding new debt, new projects, and new legacy buildings to the over-strained budget.

      The city has a Finance Department and a Financing Authority which has met demands for money with ease in the past.  What has been done can largely be undone in the name of public safety.

      Pensions and retirement benefits are another story, and Reed has the tools now to deal with them.

      It is a Big Lie that the city government can’t slow some spending in order to maintain salaries for public safety personnel.

      I suspect that Chuck Reed is going into a kind of kamikaze mode during which he will cling obsessively to his legacy projects (airport, joint library, baseball stadium, etc.) and turn his back on public safety.  That won’t work out too well, but his rigid personality and his obsessive-compulsive disorder has the rest of the council hypnotized in some strange fashion.

  22. So have we voters learned anything- anything at all from all this? Or will we continue to elect the same sort of liberal, fiscally illiterate, dopey hope-and-change activists who got us into this mess in the first place?
    If you’re a City employee and you always supported the candidate who was sure to approve large pay and benefit packages for you, then you were voting for the type of person who would also approve wasting money on projects and programs such as new City Halls, ballparks for billionaires, housing assistance for illegal aliens etc. You are totally complicit in creating this mess we’re in so your whining about it now is falling on deaf ears.
    You wanted big spenders? You got 20 years of big spenders. You made your bed. Now you must lie in it.

    • Nice try at generalizing, but not quite right, as Chuck Reed, Pete Constant, Madison Nguyen, Rose Herrera, etc. ARE big spenders when it comes to redevelopment and capital projects (for payback to cronies, poor reasoning ability in thinking that any development leads to tax revenue, public art fetish, and other reasons) or consultants and studies but don’t approve large pay and benefit packages for City employees who provide services to the residents (at least since 2005, when Reed voted to give the huge benefit increase to Police and Fire). Note that I exclude non-union City administrators since they are highly compensated by the current Council, are still in proportionately high numbers for a City in “fiscal emergency,” and are the least likely to disrupt the delivery of City services if they are laid off.

  23. It’s actually pretty simple, when an individual gets hired by the City it creates a contractual agreement by that individual and the City. This contract details what the individual will do for the City and under what parameters, conversely it also details what the City will give the individual as compensation (pay and benefits) for doing so. Both the individual and the City sign this agreement thus making it legal and binding. If the contracts stipulations are not upheld by either party there is a “breech of contract”
    The City has and will inflict punitive measures upon it’s employees who have violated their hiring contracts, thus the City will also face punitive measures if they violate any terms of the hiring contracts they have with each of it’s employees when “Reeds Folly” winds up in the courts.
    You remember basic contractual law from law school don’t you Reed? Read up on it or it will be your undoing…..

  24. ” I think it’s wrong to balance the budget on the backs of hard working employees.” and worst on backs hard working taxpayers by giving out excessive early government millionaire retirements and benefits

    Most taxpayers will have to work 10-15 years more than city employees to pay for their lower retirements and higher taxes for excessive government retirements

    Excessive early retirements and benefits were gained by political lobbying and campaign contributions by misrepresenting the real costs to taxpayers by labor controlled pension boards

    If pension rules for private retirements were applied to government pension would have been illegal and would not has happened

  25. It is hard to say exactly what is legal here because a financial emergency has been declared. But San Jose and every other city, county as well as the state have let greedy unions sell them on changes that were never affordable. Most union pension funds were fully funded before retroactive changes were made that reaised benefits 50% retroactively while lowering retirement ages to obsurd levels. Now the costs have soared as could have easily been predicted.

    In the US congress can change social security with the stroke of a pen. Our age for collecting social security or the amount we pay into the fund can change as it has for decades. In addition, we all share the cost with our employers each paying 7.5% of pay into the fund. And this fund caps benefits at $24,000 per year, not 90% of salary.

    Why should public pensions be any different?

    Those of you who think we can just leave the benefit levels where they are need a math lesson.

  26. Reading some of these comments from folks who claim to be SJ Police, Fire and City employees, I suggest we get Mayor Reed FBI or private security protection.  San Jose Police, and especially the SJ POA, are not interested in the well-being of the city of San Jose and its residents, just their own financial gain.

    • The Police Officers of this City offered the City the 10% base pay reduction AND pension reform.  Rufus gave them the finger and declared an impasse, thus moving to third party mediation.  This will then go to arbitration.  Yes, Rufus is shrewd.  He claimed that arbitration was the plague (even though SJPOA and the C6ty have only been that route once)so he crafted measures V & W.  Now he wants arbitration?  Instead of negotiating, he runs to the press and threatens more ballot measures to get what HE wants and declares a Fiscal Emergency.  Did he just figure that out?  we been in a fiscal crisis for years.  It is the megalomaniac at the top who blames and punishes workers, and won’t work with then towards common goals!

      • The POA offered one time savings, not ongoing like the other bargaining groups that have come forward this year and what the Council asked for.  That is a big difference.  As for going to arbitration, with the new guidleines on arbitration the City is in a much better position than before Measure V. While PD and the City have only been to arbitration once as you calim, the Fire Union has used arbitration as an anvil in neogtiations and in fact last arbitration obtained a retirement formula of 3% at 20 years (much better than 3% at 50 or the current PD formula), something you will not find anywhere else and that costs the City millions of dollars in retroactive funds.  That can not happen anymore in arbritration with Measure V in place.  The mayor has been talking about the structural budget deficit for years, it is the unions that haven’t believed it.

        • Seems your own President Unland as the Mercury news stated “GETS IT”  He says “too much in pensions not enough in services”  Is he wrong?

    • You’re like the Geico guy who comes up from under a rock, sees a billboard, and then thinks he knows it all. Trust Reed the Terrible at your own peril. SJPD, SJFD, and the balance of those serving this city, will still be here when he leaves for a lucrative lobby, private practice, or state office. Actually there will be hundreds less police, fire, and other city employees so I tragically I was off on a minor detail.

    • He already has protection-he has 2 SJPD officers assigned to protect him. He showed up at the fire house with 2 guys in tow-gee, I wonder why he felt the need…

  27. The post baby boomer California will have a lot of pissed off people like me who think some folks sure got a good deal on my dime.  I hope they enjoy the boats, vacation homes and all the toys my tax dollars bought. 

    Pension fund was run like a ponzi scheme and even without the stock market adjustment/crash, it was over promised and underfunded.

    Politicians are good at spending OPM (other people’s money) and giving out generous pensions and then playing retarded math to justify not funding them.

    Pensions need fixing, and rolling out second-tier pensions for new hires doesn’t come close to doing the job. 

    Feds fixed their system with second-tier phased in starting in 1984, and we didn’t get rampant corruption of FBI agents or others, so stop whinning.  We’ll fix it, and folks will have to pay more towards what they want (a higher standard of living in retirement). 

    All the rest of us pay for social security as a basic safety net and if we want more we save and invest.  You can too. 

    We can also preserve pensions as a recruitment and retention tool, but shift some of the costs, risks and liabilities where it belongs with the 50-50 split. 

    On a related note, its still possible to recruit and retain qualified and capable folks who care about public service.  The best candidates have always been folks with ties to our community and not just carpetbaggers looking for the best paycheck and benefits (because you can bet on them leaving for more pay/benefits as soon as the opportunity presents itself.)  Even public safety can work more to create qualified candidate in our community working with high school students and community colleges to promote the ethics of public safety work and move people towards qualified candidacy.

    I’m still betting on bankruptcy court as being the best way to unscrew the pooch on this mess.  It worked for GM.  Let’s face it, the deck is rigged in California against the taxpayer with the legislature, governor and many in the judicial system being wholly owned by the public sector unions.  Reform faces all the forces of partisan political power and selfish interests aligned to make any meaningful fixes almost impossible. 

    I’m hoping, however, San Jose can beat the odds and introduce a rational new model for public sector pension reform that can become a national model.  Good luck.

  28. My Mayor has been complaining that the Unions use lawyers and arbitration, and won’t come to the negotiation table. That was pissing me off.

    Now, from everything I’m reading and seeing, it seems he is the one who is doing exactly that. I don’t appreciate him using childish antics to simply play “now its my turn” with MY tax dollars, MY services and MY safety. I shouldn’t have expected any different from a lawyer. Is he just trying to set himself up for private practice once he terms out of office???!!!

    He’ll be gone to a lucrative private practice, but my tax dollars will be wasted in the courts. I reviewed his proclamation … there was NO legal support or precedent cited. I don’t even see any mention of a “Fiscal Emergency” policy for the city… is this something he’s invented?

    And he’s even got our new Vice Mayor following the same route… so when she runs, we can just look forward to four more years of huge legal bills with no improvement in the services I am receiving or my tax bill. Sorry, but she’s just lost my vote.

    Isn’t there anyone on our City Council who can work through a real solution?

    • I will no longer support Madison Nguyen. I use to think she was strong but she is just a puppet for Mayor Reed. I’m pretty sure she will not be the next mayor. Not now.

  29. Dear Mortgage Holder,

    These are tough economic times, and I have a serious BUDGET SHORTFALL in my family’s GENERAL FUND.  My expenditures have far outpaced my revenues, and as a result, I feel it necessary to take drastic action.  If I fail to act, activities and services my family has become accustomed to will be DECIMATED in a FISCAL DISASTER.  For this reason, I have decided to follow San Jose’s City leadership, Mayor Reed, and I am DECLARING A FISCAL EMERGENCY.

    As the holder of my mortgage, I agreed to pay you 5.65% interest on my home loan over 30 years.  However, due to my DECLARATION OF FISCAL EMERGENCY, and the disastrous state of my budget shortfall, I am going to change the terms of our agreement.  With the skyrocketing costs of running a family and commuting to work, I can no longer afford the outrageous principal and interest payments I promised when I took out my loan.  It costs a lot of money to put food on the table, buy clothes, commute to work, maintain the landscaping, and keep the children engaged in activities that keep them out of gangs and jail.

    Rest assured, I will not try to recover the interest payments you have already accrued.  I am only going to modify your future earnings.  Due to my DECLARATION OF FISCAL EMERGENCY, from here on out, I will only pay you 1.5% interest on my loan.  I am also going to cap my payments at 9% of my base salary, and 50% of the total cost of the loan.  This will last only as long as I am DECLARING A FISCAL EMERGENCY, so maybe someday I will pay you the full amount you were promised (but probably not).

    Yes, it is true that am building a second story on my house, and it is designed to be the GRAND CENTRAL STATION OF THE WEST.  I am also buying up my neighbor’s land so that I can build a BASEBALL STADIUM.  It would be really neat if my children didn’t have to ride their bikes across town to watch baseball.  Now, the money I am using for those endeavors is in a part of my budget that I call CAPITAL PROJECTS and REDEVELOPMENT, so it CAN’T BE TOUCHED.  I know that being fiscally responsible and repaying my obligations is important, but, by DECLARING A FISCAL EMERGENCY, I feel I am no longer obligated to pay my debts as agreed.  It is much better that I arbitrarily change the terms of my agreements, by DECLARING A FISCAL EMERGENCY, rather than dip into my CAPITAL PROJECTS and REDEVELOPMENT funds. 

    I have chosen to only use money from my GENERAL FUND to pay for basic family services, and my GENERAL FUND is in a state of FISCAL EMERGENCY.  Therefore, I cannot afford any legal fees if you decide to take me to court.  Now, I know that courts have ruled in the past that I cannot arbitrarily change my contractual obligations, but I am DECLARING A FISCAL EMERGENCY, so maybe things will be different this time.  But if you do take me to court, I guess it will be OK, because I will just take out a loan against another lender, and put my family further into debt.  As long as I don’t divert money from CAPITAL PROJECTS or REDEVELOPMENT, it doesn’t really matter what happens.  That GRAND CENTRAL STATION OF THE WEST and BASEBALL STADIUM are really very, very neat ideas, and should be fully funded regardless of the FISCAL EMERGENCY in my GENERAL FUND.

    If it’s good enough for Mayor Greed, do you think it will be good enough for my mortgage holder?

    • Sorry for the double post.  Got an error message the first time, so I didn’t think it went through.  I worked on it some more, then resent. Same point to the message, though… If that kind of stuff worked for normal people, what kind of crisis would we be in now?

  30. ” He also says if the Council doesn’t vote to put it on the ballot, he will work with PRIVATE entities to get it on the ballot. Who are these private entities he’s talking about? ” 

    Reed has backing from Chamber, Republicans, Rotary, Downtown Associati9on, Taxpayers Association, McEnery Ajlouny with help from Nguyen, Liccardo, Herrera and Constant and he believes voter majority based on what public has been told about budget by Figone and city budget staff

    Reed will win unless labor presents workable alternative budget proposal and show where taxes are being wasted in current budget since millions taxes in past unless illegal not just political will not change current budget

    • We need somebody to start the ball rolling. How much money would it take for us to hire a forensic accountant to come in and scrutinize the public records, to find where the money went? Let’s get some fundraisers going to start raising legal funds to fight this.  Summer is approaching, so it should be easier. Let’s have some BBQ’s raffles, silent auctions and more. If we have something every weekend for the next 3 months, we should have a nice amount of change in the pot. We can also take donations from employees, by setting up a PayPal account. They can donate directly. Maybe we can solicit funds from all over the US, if we can get our story out. Maybe other unions and/or union employees, across the US will donate to support our cause. We also need to get the neutral media involved and once again, we need to start sending those emails to 20/20 and MSNBC and any other investigative reporter we can locate. We need to bring in all of the attention we can get, from all over the country so they can focus on where the money went and how it was managed. We NEED to get that out. If not, No one is going to pay attention to what it is we are trying to do and why. We need neutral parties. We need all employees, in all unions, to pull together, along with any citizens who support our battle. Somebody just let us know who, what, when, where and how. We also need a private way, in a private place to discuss plans, so the moles won’t have privy to what is going on. We need a good leader to start spearheading this thing. I’m good with ideas but being able to organize this would take someone with experience in doing this type of thing. Anybody want to start a meet place?

    • Reed will win,
      You mean his special interest groups right? The ones who have cost us millions already?

      I don’t think he will win this one, no matter who backs him. Citizens who voted for his phone tax, and V and W are waking up and seeing the truth. This ballot measure if passed, will be found illegal by the courts, and will cost taxpayers millions. You watch and see.

      His best bet is to work with the Unions in good faith instead of bullying them, and black mailing them with ballet measurers.
      .

    • Reed has the votes on the council. Reed, Liccardo, Nguyen, Herrera, signed the memo. Oliverio and Constant will vote with them. It will be on the ballot, and one heck of a lot of fun to watch…

      • It can go on the ballot. It will cost them millions in court fees…YOUR tax money, because we will NOT let this go unchallenged. And then we will do EVERYTHING IN OUR POWER to make sure that we campaign against every single one. Dig up every single piece of dirt we can find and put the truth out there. So, yes, it’s okay.

  31. For all you supporting Chuck Reed and his cuts in pensions and jobs, why dont you look on the city website and look up the agenda for the council meetings. They are proposing to increase compensation for consultants and increase funding for different projects. These increases are in the millions of dollars. So I guess all the talk about a budget crisis may not be that bad if the city is still wastfully spending money. This mayor and council have it all backwards and THEY DONT CARE!

  32. Mayor Reed, fiscal state of emergency?  This is all about you and your political aspirations, not the unions.  You sat on the council and approved the city workers pensions and now you want to blame them for all of the city money problems.  When are we going to read about you and the council members sweet retirement packages?  When are we going to hear about all the city council’s lack of leadership and bad investments that put the citizens of San Jose in this situation?  The unions are offering huge cuts, yet how much more can they give up?  You make it sound like all retirees just sit back and wait for their retirement checks.  Most are still working second jobs to make ends meet. Now the mayor wants to cut retired employees COLA to 1% without any discussion because the City has refused to bargain over retirement issues yet. The truth needs to be told! Cut employees to 1,600 within five years.  You might as well out source you and every other city employee to the county.  Because San Jose will not have any police or fire personal to respond to calls for emergencies.

  33. Mercury made a good point that Reed’s ballot proposal will shape his Mayor’s legacy

    Gutsy political play for Reed not known for his strong leadership

    The fight over ballot proposal and declaring a city fiscal and public safety emergency to reform pension and health care for current and future employees will shape not just Reed’s but Council’s political futures and legacies as the comment shows

    “I will no longer support Madison Nguyen. I use to think she was strong but she is just a puppet for Mayor Reed. I’m pretty sure she will not be the next mayor. Not now. ” 

    Nguyen was always 3rd or 4th also ran for Mayor but her campaign will be fun to watch

    Both next Mayor business candidates ( Nguyen and Liccardo ) signed on to Reed’s fiscal reform proposal while lovable Pete Constant helped shape ballot proposal but will not run since he can’t win

    Kalra is badly damaged politically by his DUI and his union support by opposing ballot reform proposal means he can not win with voters

  34. REED the Terrible is a COWARD. That’s why he goes to a fire station with two armed SJPD officers as protection. Well when he sends 116 officers packing July 1 those two bodyguards need to go back and work the streets.

    Funny but in a recent briefing @ SJPD he insisted if was Chief Moore who makes the decision on protection of the Mayor. Interesting,…limme get this straight, the Chief of Police decides how to best protect the Mayor, but NOT the citizens of this city!? If he had a shred of integrity he would INSIST that those “protection” officers hit the streets to protect citizens not his royal highness. No wonder this city is so screwed up. Summer, bloody summer, he we come.

  35. Day after day, a small number of city employees, union supporters, and residents call for recalling Mayor Reed who is not known for his people skills

    They are angry with what he says, how he is perceived to treats city employees with out any proof he was rude or insulting only stating his opinion and what he has proposed to reform city budget with support and encouragement from City Manager Figone, 3-5 Council members and most likely majority voters

    So what happens if Reed is recalled ?

    Who would voters elect to replace him and would they be better or worst to fix structural budget deficit ?

    Look at the candidates for next Mayor and have you heard any budget solutions from any of them and do you want them as nest Mayor ? 

    My Answer:  No budget solutions and No to all next Mayors even Reed on his worst days is better than any of candidates for next Mayor

    Be careful what you wish for because politically many times, it is worst than what you have