‘Emergency’ Declaration Moves Forward

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.

The Fly is the valley’s longest running political column, written by Metro Silicon Valley staff, to provide a behind-the-scenes look at local politics. Fly accepts anonymous tips.


  1. I dont know when the last time the Mayor practiced law or went to court….it’s going to cost more than a few million dollars with the pending litigation that is on the horizon.  Look and ask Orange County how much they spent on their numerous lawsuits vs the employees.  Hey at least the A’s are coming.  “If you build it, they will come.”  Thanks Mr Mayor and city counsel for running the city into the ground.  Declare bankruptcy already….COWARDS!!!!

    • Actually, Chuck Reed is cleaning up the mess.

      The problem is unsustainable pension plans for city workers.

      Maybe you should change your name from robbie to robber.

      Chuck Reed is doing what the voters and taxpayers want.

      If we wanted more of the same nonsense, we would have voted for Cindy Chavez.

      • Do you have any idea what kind of financial mess he is getting ready to cause the City? You think we have troubles now??? Just wait. I understand that even his advisors are telling him not to do it. They see the devastation. Home prices will decline…further, municipal bonds will be disrupted, no one will want to do business with a city that is failing and the lawsuits will cost them millions and will be tied up in court, for years. While it is tied up in court, employees will go on to retire and get their payouts because the City will not be able to do anything about it or negotiate it, being that it would be in court. What a mess this is going to cause. What he is attempting to do is illegal. He will spend $3-$4 million to get the reform on the ballot and if it is voted in, he will spend millions in court, due to all of the lawsuits. Do you have any idea how long it will take to get it settled, if it goes to court? Years. And then they will lose and have to pay millions in plaintiff’s lawyer and court fees. All of that money and all of that time…and the City will not have made any progress. Don’t take my word for it. Check with the legal person of your choosing. Even the City’s attorney, on live television, quirked and stated that it will cost a LOT of money. People would be crazy to vote this reform in.

  2. Let’s resolved the problem here, I know we can do a better job than the city. First let’s do the FD and PD
    For Vested Employees
    Retirees if you making more now that you are retired your yearly increase will be at 0% you cheated the system, you don’t deserve it!! give it back. For the honest few the increase will be 1.5% 
    Going forward for age 48 to 55 you will get the pension that was promised to you – Retirement will stay at 55 the yearly increase will be 1.5% 
    Age 40-48 the pension will be at 70% will be based of the last five years worked, not counting overtime. You need to start investing in a 401K- Retirement will stay at 57 the yearly increase will be 1.5% 
    Age 30 to 40 the pension will be at 60% will be based of the last five years worked, not counting overtime. You need to start investing in a 401K- Retirement will stay at 57 the yearly increase will be 1.5% 
    Age 20 to 30 the pension will be at 30% will be based of the last five years worked, not counting overtime. The city will match 4% of your contribution to a 401K- Retirement will stay at 57 the yearly increase will be 1.5% 
    All new employees, the city will match 7 % of your contribution to a 401K- Retirement will stay at 57 no pension or yearly increase but you will be able to collect SS
    All employees will have to pay 2% of their salaries into the retirement fund until it ends.
    Impose a renter tax for 1%
    I don’t work for the city; I invest in the 401k system and received stock shares from the company oh yea got a 4 % pay increase this year.
    I also don’t know what % you were promised this is just a guess from the guy in the next cube.

    • No we haven’t had a raise and haven’t been asking for any.  When the markets were good (and they will get good again) no one complained about my salary then.  Everyone was getting rich and I was making a decent living.  Now that your down on your luck you want to drag me down to? If you had your info before you posted we all pay into our retirement system as it is.  8% is what I pay in.  The main point is that the labor side has been trying to negotiate and the city refuses to even meet.  As a union member and a Republican my union has never been strong arming the city, the city has been unwilling to FAIRLY meet.

  3. In my opinion this is an all out assault on the working class.  The white collar well to do politicians imposing measures to diminish the unionization of all San Joseans.  A scripted plan to rid the unions, so that they have more money to throw away or give away to their construction buddies, former mayor friends and baseball owners. 

    Ironic when you think that San Jose gave birth to one of the most influential union leaders of our time….Cesar Chavez.

    • “to diminish the unionization of all San Joseans”

      They ain’t San Joseans.

      75% of San Jose firefighters don’t live in San Jose.

      66%  of San Jose police officers don’t live in San Jose.

      Remember, we the taxpayers pay them generously, so they live in expensive suburbs.

      Diane Urban lives on an equestrian ranch in San Martin.

      Chris Moore lives in Pleasanton.

      A few firefighters live in Arizona, others in Oregon.

      There is one firefighter who lives down in Redondo Beach.

      The home addresses of city employees was published in the newspaper a couple of months ago, remember?

      • Boy oh boy. I live in San Jose and am appalled at how the city has treated me as a Firefighter and a resident.  I would love to move out of San Jose, perhaps Campbell or Los Gatos.  Oh wait The city doesn’t pay me an affordable wage to live there either. Oh, by the way by the city’s own accord I could qualify for a low income loan from the city because my income level meets the cities loan criteria.  Does it really matter where an employee lives.

      • Ya, show me the long list living in Palo Alto, Menlo Park, Cupertino…get real. Maybe if they are still living with their parents.

        Try maybe Pittsburgh, Discovery Bay, Stockton, etc.

        There will always be exceptions, but really?

        Let’s just make this simple. Pay them $40k a year, no pension, no benefits. There will still be a line of applicants for the job. It’ll work out great.

  4. Just what does declaring a fiscal emergency mean.  It’s nice to see San Jose threatening the Vallejo style of bankruptcy.  Just ask them how it worked out.  Lets see transfer moneys out of the general fund into other city funds, declare you have no money and then fight the fight.  Vallejo has spent 12 million dollars on Lawyers fighting that fight.  Far more than what they planned on saving by declaring bankruptcy. Let me Guess that Chuck Reeds office will then litigate somewhere in that mess.

    • The reason why licarrdo does not want the potential cost of the lawsuits that are going to follow this declaration is because he does not want the public to know how much this is going to cost them. The public really should push forward to have all of the cost layed out before they make the vote.

      • Sam, doesn’t want anything published because he is the next Mayor of San Jose.  He can have an excuse of saying “He had no idea the cost of litigation if it is never published”
            It might also be pointed out Sam will never have to worry about money and making ends meet.  He has a very wealty family.  With money he will be the next Mayor and he didn’t even grow up in San Jose.  This adds to the flavor of other statements posted above.  “Most public safety are not true San Joseans” Your Right!  We cannot afford to be San Joseans.  Course if you have money you can be.  You can also be Mayor and never have had lived here until a month before you run for city council.

  5. This whole idea of a “fiscal emergency” brings to light one very big gripe of all the unions in the city and that is that the Mayor and Council DO NOT negotiate in good faith.  The FD union, for example, agreed to a 10% overall compensation reduction and agreed to continue to negotiate on pension reform.  This is exactly what the Mayor asked for. 

    96% of the union members voted to take this contract, and, what does the Mayor do next?  He turns around and pulls this stunt of declaring a fiscal emergency thereby ruining any of the goodwill built up between the city and the union.

    Mr. Mayor, there’s a reason that your employees don’t like you.  There’s a reason that we don’t trust you, and that’s simply because you DO NOT negotiate in good faith.

    • To say with a straight face the Fire union in the past negotiated in good faith is a stretch.  I agree the most recent agreement may meet that criterea of negotiating in good faith, but the past president was the most unscrupulous, coniving individual and miss represnted his membership and would not know what good faith is.  Just go back to last year and the 8.9% to save the reductions that he turned down and let 49 Firefighters get laid off.  The history of his direct dealings and false statements in bogus press conferences are just some examples.  There are many reasons the other City unions did not like the Fire union.

      While the 10% reduction agreed to this year is significant and no one should not expect more, the situation is dire and an “emergency” especially regarding public safety response and staffing is real.  The declaration of a fiscal emergency, even with the 10% reduction from Fire and a few other unions to date just goes to show how dire the fiscal siutuation really is.  The solutions will not be easy and will require open frank discussion which hopefully can occur. The decalration should not ruin the goodwill, that is a just an excuse to side step the real issues and sounds like typical union spin.  Hopefully this decalration will lead to the needed conversation to find mutual solutions.  I believe Mayor Reed and the majority of the Council are acting in the best interest of the City and I hope the union leaders will engage in teh conversation with their solutions, not the typical rhetoric.

      • One man does not decide whether a contract is accepted…. It was voted on by the membership and ultimately not accepted for multiple reasons…  Most notably, the city was playing games and could not be trusted.  Example… 3 days after accepting the COPS pay cuts they turned around and put measure v and w on the ballot without so much a word.

        Hey, buy this car and in 3 days we will tell you about the recall affecting the engine….  Ya, that good faith all right.

    • Jeff,
          The mayor is basing his info from the City Manager.  We have to remember the greatest loss of city money was by a City Manager.  Maybe someone is brushing their tracks.  Maybe we do have another Boondoggle hidden in future.  You cannot go from buying a ballpark to fiscal emergency in a month.

      • Sounds like paranoia to me; maybe this, maybe that.  I take you are referring to the $60 million issue back in the 1980’s.  If history serves me right, the money was eventually all recovered and is why the City has the accounting measures in place they have today.  I would debate your reference to a City Manager responsible for the greatest loss and say that direct dealing of unions with the politicians has lost much more money, for example Mayor Gonzales cost the City much more than $60 million. In the early 2000’s 25% to Fire for three years, an extra 5% for the cops without opening the contract and more. All of this ongoing expenses that are still being paid today. 
        The City Manager works for the Mayor and Council and is appointed as such so I hope they do rely on her office for the information.  They would not get the brutal facts from the unions…..Keep the union rhetoric that are ghosts in the closet, but you will need to face up to the facts sooner or later, sooner is better for everyone.

        As for the ball park and declaring the fiscal emergency, I believe the two do work together based on the current structure of the budget.  So if you want to seriously look at the structure of the budget and focus on substantial changes that would be a good start but will take some time and I think would have great support. However, it will not be settled with union double speak and the continued personal attacks.

        • Well I just read the article that discussed how the city was offered a federal grant that would completely pay for 53 police officers pay and benefits for 3 years. At which time the economy is going to solid again. If the city is so broke, why did the city manager tell the Feds she only wanted funding for 10 of those 53 positions? Thats nuts!
          Tell me again how Figone is Not part of the problem??

    • > Spend time watching this link. Wall Street wants the Middle Class annahilated! Class warfare indeed.

      I absolutely agree that the ruling class is intent on destroying Middle Class.

      But characterizing the destroyers as “Wall Street” is deceptive and misleading and actually facilitates the destruction.

      The destroyers are really a largely invisible-to-the-public cabal of amoral megalomaniacal malthusian nihilists.  If you want names, think George Soros, Paul Erlich, David Brower, Al Gore, William Ayers, Margaret Sanger, people like that.

      In simplest terms, they believe that people are craven, violent vermin who are overpopulating the earth, and the solution is to “bring it all down, man”, start over, and rebuild society based on “intelligent”, efficient, and “fair” principles formulated by really smart people—THEMSELVES!

      Ideas of “free will”, person responsibility, and “democracy” are anathema to them.  People don’t have “free will”; they are stupid, beasts—little more than advanced amoebas—who can be controlled and manipulated by the application of “stimuli”.  And that’s what they intended to do: stimulate the ignorant masses with propaganda and government handouts to manipulate them into self-destructive bahavior and bring down society.

      The destroyers use “Wall Street” as a code word for “capitalism”, but this is cynically deceptive.

      The pillar of a free society is “free market capitalism” with its vast, efficient economic network of tens of thousands of small businesses acting independently.

      “Wall Street” is really the cradle of “monopoly capitalism”, the small handfull of large companies who make their living on profitable “concessions” granted by the government, i.e. the ruling class.  It is the “monopoly capitalists” (and their emerging super-rich Google and Facebook winderkind who suddenly emerged on the scene as capitalists with monopoly power)—it is the monopoly capitalists who largely fund the middle-class-destroying activist groups like the Sierra Club, Planned Parenthood, the Tides Foundation, the Ford Foundation, etc. etc.

      So, while it might be arguable that “Wall Street” is destroying the middle class, it is NOT “free market capitalism” that is the destroyer.  It is the evil cabal of powerful nihilists who are able to assert control over institutions of “monopoly capitalism” to wreck the economy and crush the middle class.

      The solution is not to reject captialism; the solution is to expose and disempower the nihilist parasites and force their monopoly capitalist host organisms to live or die in the free market.

      • I watched the George Carlin link that somebody (probably the same person that posted this one) put up last week. I can’t tolerate Maddow or Moore though so I won’t watch it, but I’m guessing it’s much the same socialist message.
        Boy was Carlin pissed in that video. There was no discernible trace left of the erstwhile, loveable ‘Hippy Dippy Weatherman’ when this bitter old man profanely and obscenely denounced ‘Wall Street’ as the cause of all the country’s problems in front of a cheering, woo-wooing, bleating herd of sheeple.
        Thing is, he’s on the right track. Corporations DO have undue power and influence in America. So does every other institution upon whom we irresponsibly rely and demand to provide us with everything we need to live a comfortable, risk free existence. But the Left doesn’t understand that their own pernicious legislative efforts to regulate and control business is exactly what gives the corporations that undue power and influence. Their misguided and shortsided efforts wind up feeding the very beast they claim we should fear.
        Anyway, it’s a wonderful make-work scheme for the Democrats. The more they try to solve our problems, the worse they screw things up, and since they never clue into the fact that they themselves are responsible for how screwed up things are, they redouble their efforts. It never ends. And it perfectly accounts for the gigantic explosion in Government we’ve witnessed over the last couple of decades.

        • It is the republicans that screw everything up. From what I heard, Chuck is actually a republican who ran as a democrat because he knew he couldn’t win as a republican. I don’t know if it is true, or not, but that is the rumor.

      • So, who are the free-market capitalists, if not multinational (and hence non-patriotic) corporations who have had “our” U.S. elected reps and many of our judiciary in their hip pockets as they do in the other countries that they operate? Aren’t these the same free-market capitalists who have lobbied hard and successfully to gut government regulations on their businesses, to pass laws discouraging labor unions, to eliminate obstacles to off-shoring of jobs, to flood the country with foreign workers to lower salaries, to lower tax rates on investment income while forcing the government to raise payroll, sales and other taxes that hit the middle class? I would say that the evidence is clear that free market capitalism increasingly unfettered by necessary government regulation and higher investment and corporate taxes has been a boon for the already rich, but has been and will continue to be the biggest obstacle to a healthy middle class in the U.S.

  6. I’m pretty sure the people of San Jose trust Mayor Reed. He won re-election with 77% of the vote. He told voters that he would do exactly this, and now he’s doing it.

    The people of San Jose want this—they might not be as loud as union members, but their will surely outnumbers union will.

    If you’re going to blame Mayor Reed for one thing, it has to be following through on his campaign promises.

    • Chuck Reed is a man of his word when it comes to keeping a campaign promise – for sure!

      I remember Chuck making the rounds to the Police and Fire and several other City Employee bargaining units during his first and second successful runs for City Council. He pledged his support for wage and benefit increases as well as maintaining if not increasing staffing levels.  In exchange for his promises Employee Bargaining units endorsed him and he was elected.

      He made the same circuit during his first run for Mayor. The endorsements flowed because Chuck kept most of his promises (staffing decreased) when he lobbied for support from his colleagues on the Council to ensure that a majority ratified EVERY SINGLE CONTRACT that came before the council.

      During his first term as mayor, he followed through again by voting in favor of EVERY SINGLE CONTRACT that came before the Council. He didn’t get endorsed for his current term as Mayor because he began publicly apologizing for his nearly 12 year long voting record of supporting wage and benefit increases for all city employees.

      I’m not sure a you folk who elected him for his last term as mayor knows what you got!

      Chuck Reed is a guy who makes good on his campaign promises then apologizes for keeping them!

      Mayor Reed is having a John Kerry moment!!! “I was actually for out of control increases on employee wages and benefits BEFORE I was against (apologized for) it!

      • The police and fire personnel loved Reed so much during his second run for city council seven years ago that they simply refused to hear his opponent discuss the wildly out of control city spending.  That kind of single- and simple-minded adoration of Reed is being amply repaid now that he needs them no longer.

        Reed is like a snake, but the police and fire personnel happily endorsed him without hearing his opponent.  They made their bed when they got into it with Reed.  They could have held his feet to the flame a little bit, but no.

        You guys did the political “crime,” now you get to do the time.

    • I remember another of Chuck’s “Campaign Promises.” 

      It went something like this:

      “Keep San Jose Safe! Save Police and Fire Jobs!  VOte Yes on Measures V and W!”

      21 homicides to date in 2011, 250+ layoff notices sent to police offciers, 80 to fire??? 

      Thanks for keeping your Promise Chuck!

  7. Let me this right the people who caused this are going to fix it save the city oh and build a baseball field. Really …. On the ballot should be a recall for reed and vice mayor fire figone.
      Have you ever seen the total compensation for the mayor and council?  What about the extra pay they call cost recovery ??? Is that what they call illegal bonus pay?
      These idiots only do what pays them best. Trust them risk everything. The only way is to replace them with real residents of San Jose who care and have a vested interest in the city. Enough with professional politicians.

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