Mayor Chuck Reed’s fiscal reforms, which would declare a fiscal emergency that allows the city charter to be changed in an effort to slash soaring retirement costs, will be discussed at Tuesday’s City Council meeting. While it seems likely Reed will get the necessary votes to begin the process—he already has the support of Vice Mayor Madison Nguyen and councilmembers Rose Herrera and Sam Liccardo—Councilmember Donald Rocha is suggesting the city stop, take a deep breath and consider the possible litigation that could ensue.
Public-employee unions have come out strongly against Reed’s proposal, and a memo Rocha submitted Wednesday says he would like a greater discussion on the costs that could incur if lawsuits are filed.
“I understand that the legal costs, even in the worst case scenario, would pale in comparison to the annual retirement costs and unfunded pension liability as projected by our City Manager and Retirement Director,” the memo says. “However, I feel the above analysis will provide important data points that should be available to the Mayor and City Council, as well as the public, as they consider,comment, or vote on the proposed recommendations.”
Rocha suggests that any decision on Reed’s proposal be deferred if city staff cannot come up with a complete analysis.
In addition to altering the city charter, Reed’s proposal suggests creating ballot measures that—if approved by voters—would allow the city to take bolder steps in curbing pension costs. Councilmember Herrera said this was critical in gaining her support.
In City Manger Debra Figone’s fiscal reforms plan, which is expected to be accepted Tuesday, four options are laid out to increase revenue. They include: a sales tax increase of 1/4 cent for an estimated revenue of $34 million; a municipal water system tax on gross receipts for an estimated revenue of $2.5 million; a business tax increase for an estimated revenue of $5 million; and a disposal facility tax increase for an estimated revenue of $5 million.
Along with decisions regarding public employee retirement benefits, the council will also discuss amendments to its agreement with Team San Jose as well as San Jose Environmental Innovation Center project.