Pension Reform Crisis, Continued

Until a few days ago, the city of San Jose and its employee unions appeared to be a lot friendlier than they were at the beginning of the month—when City Manager Debra Figone and police union president George Beattie were squabbling about why the city punted on a federal grant. But this week, as the pension-reform plan inches forward, the unions are back to voicing outrage.

The proposed changes, meant to confront “staggering” declines in revenue and “alarming” increases in health-benefit costs, should have surprised no one. But the unions are challenging the data itself and demanding to know who is doing the city’s math. Negotiator Alex Gurza hasn’t revealed where he’s getting his numbers, and Christopher Platten, a lawyer for the firefighters and police unions, isn’t taking “no comment” for an answer. Platten wrote a letter to the city last week demanding that Gurza name names. Is an outside actuary supplying the city with its bleak forecast, or is there some shadowy CPA grinding away with a calculator in the depths of City Hall?

Meanwhile, the unions are comparing San Jose to Wisconsin—convinced that Mayor Chuck Reed and Figone are intent on making San Jose a legal guinea pig by taking the pension issue to voters. Even state Attorney General Kamala Harris has written a letter to Reed telling him to tread lightly in the face of litigation.

While most leaders of the city’s labor groups fume over proposed pension changes, Yolanda Cruz, president of AFSCME, has adopted a shockingly civil tone. The city’s biggest union has reversed course and looks headed back to the bargaining table. Cruz, who not long ago used the word “imaginary” to describe the city’s financial crisis, sits down with Gurza’s people Thursday.

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. Same old BS from the city.  Chief Figone and Chuckie have no intention of good faith negotiations.  They have one goal, BUST The UNIONS.  That has been their goal from the start.  Every time the unions give concessions the city ups the ante.

    Come on Chuck, PO, Pete and the rest of you, what happened to fair play!

    Be careful what you wish for, citizens were mislead on the last two ballot measures, but slowly the are getting more educated on your lies and bad intentions to but this city in the sewer.

    You can only suck so much blood out of a dedicated work force that you obviously no longer respect.  You claim the city is broken, wait till the law suits start coming.

  2. Unfortunately, the way our system works, when Reed and Figone are found to be guilty of misleading the public, nothing will happen to them. There is no accountability in todays politics. Quite frankly, I think people are too lazy to hold these folks to the fire.

    • Are we the next Rhode Island?

      This city council has failed us, now they want to take away my 30 years of service retirement.  I have been shot at (missed thank God) worked countless mandatory overtime hours for special events.

      Witnessed 4 officers laying dead in the street trying to do their jobs, worked countless Holidays, suffered 9 job related surgeries, while the city council and citizens sat in the comfort of their homes unwary what is going outside on a nightly basis.

      Now they want more concessions? 

      Please, enough is enough.  Public safety and city employees have dedicated their lives to city of San Jose only to be pushed to the curb.

      What is going on is JUST WROUNG!  This council needs to come clean, especially Mayor Reed how is hiding the money!

      This is the time for the citizens of San Jose to step up and be vocal before is to late.

      • “now they want to take away my 30 years of service retirement.”

        You would lose nothing that you have on your retirement check today however the annual 3% increase would go down to 1% under Mayor proposal.

        • Just watch, Chuckie and the rest of his posse will try to attack ALL of the retirees.  Stay on top of the news and read the writing on the wall.  The is only the beginning.

        • He would lose all the money he deposited over 30 years in paying upfront for the 3% cost of living increase.  Had he been given the choice, during those thirty years, to keep that money rather than forfit it later this would not be an issue.

  3. MEF/CIO also wants to have a chance to talk with the city about pension reform.  MEF/CIO was denied to have negotiations about Framework for Retirement Reform.

  4. Years ago San Jose City Council made policy decision to not have any Civil or Criminal penalties in City Charter or Municipal code that applies to Mayor, City Council, City Manager or city employees like other cities.

    San Jose MAY make violation of city charter or ordinances a criminal violation but Council has CHOSEN to NOT have any penalties for city charter or municipal code their violation of city charter or municipal code

    Remember Assistant District Attorney Pandori politically charged Gonzales, Guerra etc before election and they GOT OFF not because they didn’t do what they were charged with but because NO CITY PENALTIES for Lying Cheating, Stealing

    WHY ? – NO SAN JOSE City PENALITIES for lying, cheating, stealing or misleading Council or public


    At swearing in, S.J. Mayor Reed pledges `No lying. No cheating. No stealing’

    “Today we turn from the past and set a new direction for San Jose,” Reed said after thanking his family, public safety officers and his supporters. “The special interest groups, the lobbyists, the influence peddlers and the fixers will not run City Hall,’ he added.

    The event, which drew more than 950 attendees including former mayors Janet Gray Hayes, Tom McEnery and Ron Gonzales, was “short and to the point,” said Bill Hughes, a business owner who came to watch the ceremonies.

    New council members Sam Liccardo and Pete Constant were also sworn in, as were re-elected members Nora Campos, Judy Chirco and Madison Nguyen.

    The audience laughed during Reed’s swearing in, conducted by his daughter, Air Force Major Kim Campbell, when he promised “No lying. No cheating. No stealing.” The addition of that phrase was one of the 34 Reed Reforms that helped him get elected on a platform of cleaning up San Jose government. “

    “The inauguration of the new mayor came as two former staffers who worked under Mayor Ron Gonzales – himself indicted on alleged bribery and conspiracy charges related to a trash deal- recently were charged with a series of felonies alleging they broke lobbying laws soon after becoming private consultants in 2000.”

    Santa Clara City Charter

    Sec.  1801 Violations.
    The violation of any provision of this Charter SHALL BE be deemed a misdemeanor and be punishable upon conviction by a fine of not exceeding one thousand dollars ($1,000.00) or by imprisonment for a term of not exceeding one year or by both such fine and imprisonment.

    Sunnyvale City Charter

    Section 706. Ordinances. Violation. Penalty.
    Violation of an ordinance of the City is a misdemeanor unless by ordinance it IS made an infraction, and the penalty therefor shall be the same as established under general law for a misdemeanor or infraction, as the case may be. Violation of an ordinance of the City may be prosecuted in the name of the People of the State of California or may be redressed by civil action or both. (Amended effective December 21, 1976: previously Section 814)

    San Jose City Charter

    SECTION 609. Violation and Penalty.

    The Council MAY make the violation of its ordinances a misdemeanor for which a violator may be prosecuted in the name of the People of the State of California and may prescribe punishment for each violation by a fine in an amount not to exceed that set by State law or by imprisonment not to exceed six (6) months, or by both fine and imprisonment. Such violations may also be redressed by civil actions.

    Amended at election November 6, 1984

  5. The city needs to be honest.  Honesty is the best policy.  I am in the process of locating an accountant on my own to review city books.  I may have just that person.  My request to the city would be “Will you allow a complete open book investigation.”  This person would be my person.  Not a person that the city chooses for protection reasons.  Not a Union person as well.  In closing I would ask that the city in the event of money found, provide a percentage to Special Olympics and an amount for the accountant at half the rate the city pays it’s experts.  WILL YOU TAKE MY CHALLENGE SAN JOSE?  I know people in the city who can through me make this happen.  I will also keep the people of San Jose informed of the progress.  Thank You for your time

  6. David Wall said
    “The San José Mercury News is a bastion of political opinion…their own.

    The agents and principals of this corporate entity have been given unprecedented participation by the Reed administration in city policy formation. Is this reported in the “news”? Was there a “deal” for favorable press? “

    Well Yes, – At Mercury and San Jose City Hall – ” If you don’t go along, your gone ” because it’s all about Business, Money and Republican Politics

    1)  Mercury was told by owners – MediaNews Group to not publish any negative information about advertisers and City of San Jose who buys lots ads

    Look at Reed, Figone and business friendly Council’s calendars to see frequent meetings with Mercury’s editorial and reporters giving them inside scoop on what to print or endorse before important issues or stories

    2) Dean Singleton Texas media mogul with strong ties to George W. Bush… He’s extremely conservative,and Republican supporter

    ” Bush Buddy, William Dean Singleton, buys up almost all Bay Area newspapers “

    ” Media News Group wants to merge and acquire. So much so that they started buying up properties before the laws changed because they were so sure they would change. They buy up multiple properties in the same market and have shown a growing tendency towards secrecy in their holdings. Media News Group influences legislation so that they can continue to merge and acquire. They have the son of the Bush Administration’s former Secretary of State to thank for changes in laws that allow them to grow. Continued mergers and acquisitions give Media News Group control over advertising rates and public opinion/dissemination of information in major markets. Their continued long term growth depends on continued relaxation of laws regarding cross ownership of media properties. Media News Group supported George W. Bush for President.

    Media news group has initiated a near total blackout on coverage of the election fraud issue, an issue that could potentially remove the republicans from office, thereby resulting in the election of a government less friendly to loosening of FCC cross ownership law, severely hampering their ability to merge, acquire and thus grow. This could force them to divest themselves of properties, limit their ability to control advertising rates and information, destroy their growth potential. That is, if fraud where proven and the elections invalidated. “

    MediaNews Group “one of the largest newspaper companies in the United States. It is privately owned and operates 56 daily newspapers in 12 states”

    In August, 2006, the company took out around $350 million in loans to purchase four newspapers from McClatchy Company.

    Among those providing the loan was the Bill and Melinda Gates Foundation.[4]

    The loan was mostly used to help pay for the acquisition of two significant San Francisco Bay Area newspapers (and some smaller papers), including the San Jose Mercury News and the Contra Costa Times, the dominant papers in the San Jose and Contra Costa County, California markets; in total, the purchases amounted to roughly $737 million.

    Hearst Corporation ( SF Chronicle ) owns 31% of MediaNews publications outside the San Francisco Bay area. Form 10-Q “


    The San José Mercury News champions the “Reed Agenda” which makes no real sense because the “Reed Agenda” is fraught with inept decisions and failures.

    The reason why the City of San José is in a financial pickle is due in chief to very poor financial decisions by decades of City Councils including his royal greenness, Mayor Reed.

    How many “votes” has Mayor Reed participated in that increased debt and or other financial obligations instead of paying down liabilities and providing for required city infrastructure repair and or replacement?

  7. In my opinion,

    With all the heartache expressed concerning city hall misdeeds, the greatest misdeed of them all is the ongoing failure of the San José Mercury News to adequately keep the public informed.

    Citizens have an affirmative duty to “stay informed” in their governmental affairs. Unfortunately, citizens are fairly “lazy” in participation in the responsibility of maintaining our democracy.

    Even worse, citizens are “lulled into sleep” with the belief that newspapers are truthful and out to protect the public’s interest.

    The San José Mercury News is a bastion of political opinion…their own.

    The agents and principals of this corporate entity have been given unprecedented participation by the Reed administration in city policy formation. Is this reported in the “news”? Was there a “deal” for favorable press?

    The San José Mercury News champions the “Reed Agenda” which makes no real sense because the “Reed Agenda” is fraught with inept decisions and failures.

    The reason why the City of San José is in a financial pickle is due in chief to very poor financial decisions by decades of City Councils including his royal greenness, Mayor Reed.

    How many “votes” has Mayor Reed participated in that increased debt and or other financial obligations instead of paying down liabilities and providing for required city infrastructure repair and or replacement?

    As to the Office of the City Manager, this city charter issue should be on the ballot.

    This Office is too bloated, too powerful and too incompetently managed for words to describe it. It should be eliminated but, the City Charter must be changed to do so.

    But, the San José Mercury News doesn’t touch this issue either. Yet, the San José Mercury News can’t wait to assist Mayor Reed to eviscerate city employee salaries, benefits and retirements.

    The perpetual chicanery perpetrated by the current Council is enough to make even the casual city hall observer want to puke uncontrollably and often.

    Perhaps that is why no one cares about San José anymore…except here in the blogosphere.

    David S. Wall

  8. On the unions side. Pers is so large they can’t just lie about their numbers. Between the last two years pers had such huge ROI that they’ve almost fully funded themselves already. If the city of San Jose’s pension plans havent seen similar or better percentages they have no excuse. If they have then this whole fiscal issue (over done with so much hyperbole) is even less accurate. The economy is coming back strong. Right now the only unemployed people are A. those who have no real employability to begin with and B. those who don’t want to take what’s available.
    I’m retired but I started a handy man business on the side. I now gross $9400 a month and regularly turn down work.

    • The investment performance report for the Police and Fire Plan for 3/31/11: “Over the last 12 months, the Fund experienced a net investment gain of $350.9 million, which includes a net investment gain of $82.3 million during the first calendar quarter. Total assets increased from $2.4 billion one year ago to $2.7 billion on March 31, 2011, with $64.2 million in net distributions during the period.”  Thus, even with the distributions for for retiree benefits, the Fund had investment gain of almost 351M.

      On a side note, the City admits on its website that it has not paid the Annual Required Contribution toward retiree healthcare.  Thus, that is why it is underfunded. Had the City paid its obligation during the flush times, the healthcare issue would not be a problem. Maybe the anger should not be directed at the worker who simply expects the City to uphold its end of the bargain and direct it at the council who failed to perform and caused this problem by spending the money promised to employees—sound a little like social security and no one blames employees for the social security failure….

  9. Despite running a deficit for 10 years—some of which were very flush times—the city decided to budget, in this recession for the first time, $30M for hard time reserves.  A reserve for hard times is smart, but the timing is wrong.  That should have been budgeted for in the good times so it could be used now. How can the city cry poverty when it proposes to set aside $30M not to mention all of the other frivolous spending on pet projects, and paying the debts of others it is not responsible for (i.e. rda).

    It is time for the City to produce hard numbers with back up support and not rhetoric with no support.  In fact, the City agreed to do just that in the recent agreement they signed but again failed to keep their word. I guess no one should be surprised.

  10. In 2008, the City received a legal opinion regarding the ability to impair retiree health benefits. In the 46 page memo, the City is informed that they cannot legally do any of what they are trying to do now—including declaring a fiscal emergency to alter contracts. With this in hand, it is obvious the City is wasting tax payer dollars by moving foward with their illegal ballot measures and/or that Chuck’s motive is purely political.

    The memo is attached to the “City Response dated July 13, 2011” under Information Requests on the following link:

    ps—interesting that it takes the City months to respond to requests for information and back up for their positions and when they do respond they are evasive and never actually answer the questions posed.

  11. This is the very reason why I moved out of San Jose, total BS, I will not drink the cool aid the council is selling us. 

    This is a down hill spiral that will not stop in the near future.  God help us all because this will spill over into other communities.

    San Jose needs to put the check book away and quit blaming unions for the mess you have created.  50% of the council including the CM, Mayor, PO and Pete are just looking to use the unions as stepping boards to advance their political careers.

    Stop this insanity!!!

  12. Reed is a good man and so is his staff. Likewise for Figone. Nothing evel going all we have is two seperate sides looking at the issues diffenretly. The hope is all is resolved amincably.

  13. It is not appropriate to compare Chuck Reed to Gov. Scott Walker of Wisconsin.  The apt comparison would be to someone who steals what is not his.  Maybe Bernie Madoff?

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