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SJ City Council to vote on budget cuts

June 17, 2010 7:32:49 PM PDT
It's a day of tough decisions in San Jose as city leaders wrestle with a $118 million budget deficit. The key question is if they will force city employees to take even deeper cuts than unions have already agreed to.

Thursday proved to be an emotional day in the South Bay. The unions made an offer to the city that they thought city leaders couldn't refuse, but it turns out it is not so simple.

Immediately before the special council session, union leaders announced what they called an unprecedented proposal to achieve the 10-percent pay cut the city needed to balance its budget.

"Straight out, one shot, five percent ongoing, 5 percent for one year, exactly what the city asked for," says AEA union president John Mukhar.

The union proposal relied solely on changing the ratio of city/employee retirement contributions. It involved increasing the amount employees contribute to the retirement fund and reducing the amount the city contributes. The mayor says unfortunately accepting the union offer would be an illegal move.

"The proposal in front of us could not be accepted without violating the city charter. I'm not going to support violating the charter," says San Jose Mayor Chuck Reed.

Council members praised the unions for stepping up to the plate and some were even willing to keep the negotiations going to meet the budget deadline.

"I am prepared to sit here in the council chambers for the next 12 days to allow for them to go back to the bargaining unit," says San Jose City Councilmember Nora Campos.

Most council members reiterated that they didn't want to have to impose a 10-percent pay cut on 1,600 employees, but time was running out and they needed to save jobs and city services.

"All over this city, people have lost jobs, sustain wage cuts, lost homes and lost health insurance. This means residents have to tighten their belts and so must we," says San Jose City Councilmember Rose Herrera.

After four hours of discussion, the council members are debating whether to impose its last, best, and final offer on five unions to get that 10-percent pay cut or after five months of negotiations, to now allow just a little bit more time for a workable solution that doesn't involve having to impose terms.

Also there will be lots of other budget decisions discussed Thursday evening, which will be a lot easier to decide, such as imposing 10-percent pay cut on council members themselves and executive management. They have already agreed to that and need to accept the mayor's budget message, and probably hear from police and fire unions about what they are willing to do to save jobs.

The city has to deal with 11 unions, but two they can't impose terms on -- police and fire. Then there are only five unions with open contracts which face having terms imposed on them right now. It gets complicated because a sixth union made an offer earlier on Thursday to take cuts, but they aren't really in the mix at this point.

By law, the city's budget for 2010-2011 must be finalized by next week to take effect in July.


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