The Coming Budget Cuts

In what has become an annual refrain, we again sit at a crossroads of bad choices about cutting services and jobs, far worse even than last year. In June, we will slash many crucial services and lay off hundreds of city employees—as many as one out of every five—to resolve a budget deficit that will likely exceed $120 million.

The Great Recession has left us increasingly deaf to the familiar drumbeat of bad news—losing a quarter of the police force, closure of nearly every community center and the like—particularly as this scene repeats itself in large cities throughout the United States.

Traditional employee concessions—such as cutting pay by 5 percent or even 10 percent—could modestly mitigate the damage, but not much. Much of the conversation in the last two years has focused on pension reform to create a lower, “second tier” of benefits for newly-hired employees. It has become increasingly clear, however, that even implementing a much less generous second tier will do little to curb the exploding trajectory of retiree costs.

Here’s why: reducing benefits for new hires will do nothing to cut the city’s mammoth $3.5 billion unfunded retirement liabilities, and those obligations have increasingly started coming due. City taxpayers currently will pay over $256 million to cover retirement obligations in the coming fiscal year, a figure more than twice as great as only a couple of years ago. Already consuming one out of every four General Fund dollars, retirement costs will continue to balloon, exceeding $400 million within four years. Even the most stringent of cuts in a “second tier” will enable the City to shave no more than $30 million off of that that $400 million annual price tag.

What to do about it? Demonizing our hard-working employees does not amount to much of an answer. After all, employees fairly bargained for these benefits. Moreover, even as many taxpayers pay more for those retiree benefits, we would do well to remember that many employees do not actually get much richer. In many cases the costs have been driven by factors having nothing to fattening any employee’s wallet, such as soaring health costs, longer life expectancies and deep market losses. Indeed, for many of our younger employees, it appears increasingly likely that the promised-for pensions and other benefits simply will evaporate by their retirement date anyway, as it appears too much to expect future city councils to continue to stomach deep cuts in services in order to feed the insatiable retirement funds.

Rather than dumping responsibility on employees, we should put it where it belongs: on elected officials. Politicians happily agreed to union contracts with unsustainable promises, and in many cases, those politicians benefited politically while leaving taxpayers holding the bag.

So, in city halls and statehouses throughout the U.S.., the task remains for elected officials today to show renewed courage and fiscal sense. In San José, that requires that we begin a more difficult conversation, one about whether and how to cut retirement benefits—ranging from eliminating sick leave payouts and raising health insurance co-payments and lowering the cap on pension payments—that our current employees and retirees have long relied upon. While constitutional protections make it difficult, if not impossible, to do so through traditional mechanisms of collective bargaining, we need to work with our unions to find a new bargain with our employees: one which is both fair and sustainable.

In the coming weeks, my colleagues and I will present proposals to do just that. As we do so, it would do well for all of us to remember that our adversaries are not the labor unions, nor city management. Rather, our adversary is time. We cannot delay confronting a fiscal tsunami that threatens the solvency of the City with continued half-measures and mere platitudes about “the need for pension reform.” We will need to make tough choices, and tough choices will make people unhappy. As voters and residents, do not allow any of us to duck from that responsibility—the future of our city hangs in the balance.

81 Comments

  1. “Demonizing our hard-working employees does not amount to much of an answer.”

    Where were you when the mayor was raking us over the coals in the press?? Now that we are fighting back with the real truth and exposing the council and mayor for what you real are…lying backstabbing whores, now you want to say something nice and appear to be conciliatory??

    K.M.A SAM!  I am not giving you a dime nor another vote!

    I hope Governor Brown takes every dime of your RDA funds and gives them back to the people and shoves your feel good programs far up the area in which you sit upon.

    To phrase a wonderful movie quote, “Don’t go away mad….Just go away.”

    • Officer Z, are you sure that you’re not a Sicilian relative of mine posing as a police officer?

      I can assure you that I won’t count on any dime or vote of yours—I’ve never received a cent of campaign contributions from the POA, any other union, or other lobbyist or lobbying organization.  Remarkably, somehow, I’ve managed to get get elected in this town—call it dumb luck.

        • Awww Sam. You really hit some heart strings there. I have to say, good one. well played. The problem is, I know you. I have worked with you. I have seen your pompous self serving attitude in every email and in person.
          Please don’t insult my intelligence by saying you actually “serve” anyone but yourself.
          There is one spot I should make crystal clear. I love my job. the operative word being, Job.
          My job does not define me, nor does the oath I took to uphold the laws of the state and country. So be careful when you say, I swore an oath to to serve a certain group. I did not. I swore an oath to be honest in deed and duty. To ALL. When is the last time you did anything honest??

        • Officer Z,
          Those “dumb voters,” as you describe them, are the same folks who are paying your salary, and mine.  They’re the same ones who are 100% liable for paying off the $2 billion unfunded pension liability for public employees in this city, and they’ll pay much of the $1.5 billion unfunded retiree healthcare liability. Most importantly, they’re also the same people that each of us have sworn to serve.  Fortunately, the overwhelming majority of your colleagues in the Police Department do not share the same disdain for the people that you purport to serve, because they’re professionals who deeply appreciate the meaning of public service.

        • Actually your soooo wrong Sam L.!! Majority of us are in disgust with the public ” we serve”! We had always helped them yes, but when for the first time we asked for their help to vote down measures V and W, they turned their backs on us. Therefor we will be returning the favor. You see Sam, I work in the front lines of the Police Dept.  I work, talk and listen with my fellow officers and hear the real truth of what the “Real Police” is thinking. Why I say “real Police” is because the information you based your knowledge about the police is from the chiefs and command staff! They are not police nor do the know what is happening below them. They are telling you what you want to hear because they are kisssing up to you for polictical ambitions or promomtions. Chief Cavelero is a perfect prime example of that. Thats why he has no repect in the Department. Beleive me when I say that we police are only in this job for the Money!!! We were promised a decent wage with good benifits. Thats why we clean the mess you or the rest of the citizens of San Jose don’t have the stones to do!

        • Sam, I’d like to address this point as well. First, while I don’t condone Officer Z’s particular verbage, I certainly understand the frustration, disappointment, even anger, behind it. However, that has absolutely no bearing on his/her professionalism or ability to serve and protect. Although we have a duty to our ‘employers’, our ultimate duty is higher than that – the impartial enforcement of law and especially the Constitution.

          That being said, let’s be honest. Cops and firefighters aren’t your constituency, nor are we that of any of your peers on the city council right now. (In fact, if the city council were running for office in a city made up entirely of cops and firefighters and that was all we had to choose from, odds are we’d amend the city charter to get ‘none of the above’ on the ballot.) And, although the POA has, at times, endorsed various candidates, that has not occurred recently, and, even if it did, I find myself frequently at odds with positions and actions taken by the POA board, regardless.

          That being said, there seems to be a huge philosophical gap between public safety in general, and police officers, in specific, when it comes to how we thing the city ought to be run. Generally, a cop would advocate for limited, small government, narrow, traditional interpretations of constitutional protections and free market economics. We certainly would tell the city council to forget about debating a ‘plastic bag ban’, stay entirely out of the medicinal marijuana issue, make it easier for businesses to work in San Jose, to completely avoid issues like ‘racial justice’ ‘social justice’, or ‘social engineering’ (which are really just affirmative action by another name), get out of the business of charity entirely and a host of other, more socially and fiscally conservative decisions. Basically, we watch as City Hall makes terrible decisions time after time and then leaves us to deal with the consequences, few of which are good.

          By contrast, the vast majority of San Jose’s residents are the sorts of people who, not to put too fine a point on it, repeatedly vote into public office the sorts of people who presently sit on the council. Needless to say, there’s a huge cognitive and philosophical disconnect here. And, once again, we see poor decisions being made by the voters and are left holding the bag, in many ways, dealing with the consequences of other peoples’ bad decisions.

          Conversely, most of us – and especially those of us who live here in San Jose – love the city. But we don’t love it for what it is; we love it for what it could be.

      • Hey Liccardo, what Officer Z meant by “not giving you one dime” was that police are not going to vote on giving back 10% or anything from their pay! Not meaning giving to your political action! We (police) never supported you nor will we ever support you! You are a fraud and part of the problems in city hall!

        • Not giving back 10%.  Fine.  As a taxpaying life long resident of this city (which over 50% of YOUR ranks cannot say since most PD & FD personnel live out of San Jose.  Nothing like being greedy with someone else’s money is there?)

          San Jose residents are sick and tired of the bullying tactics of city worker unions, especially those of PD & Firedepartment.  Don’t believe me?  Look at the overwhelming reelection of Mayor Reed.  Look at the overwhelming passage of Measure V & W.  Ya’ll want to say you’re for the people but the people have spoken.  WHy is it that YOU aren’t listening???

        • While we provide a service to the city which employs us, our ultimate duty is to the rule of law and to the Constitution. These are our ultimate authorities so long as we are police officers; not you, not the city manager, not city hall. The. Rule. Of. Law.

          That being said, do a little research on police agencies around the bay area. The vast majority of them are reasonably well staffed and pay roughly the same salary as San Jose. Many do so and have far better benefits – particularly with respect to their retirement packages. Anecdotally speaking, one of our former officers transferred to Palo Alto PD and is now taking home substantially more than I am – a bit less than double.

          San Francisco has a population 80% the size of San Jose and maintains a police force that is double. In fact, the gross disparity of staffing between San Jose and many agencies across the nation is stunning. If you dig a little deeper, you will find that, throughout the Bay Area, virtually every other agency is better staffed on a per capita basis and pays at least as well, if not better than San Jose does. Even with the Santa Cruz Sheriff’s Department, where the pay is rather less, the ultimate take-home pay is as good as San Jose. Santa Clara is hiring, SCCSO is hiring, Santa Cruz SO is hiring, When I last checked (about a month ago) Redwood City and Fremont were also hiring. Bottom line, San Jose’s wages and benefits have traditionally been just barely competitive around the Bay Area.

          So please, ask yourself the same question most of us in the PD have been asking. How is San Jose’s finances so screwed up that it can’t afford to even barely manage parity with other police agencies when it comes to wages and benefits? And why is it that San Jose can’t even manage that while employing anywhere from 1/3 to 2/3 the number of officers per capita that other agencies in the area do? Don’t you think there must be something amiss here? How is San Jose going so very wrong? Can you look outside the spoon-fed garbage that is being fed to you out of City Hall or are you so complacent or lacking in curiosity that you are willing to watch as the Brain Trust in City Hall does their level best to destroy every bit of safety that the PD has bought with blood, sweat, integrity and ingenuity? In the end, it won’t be the PD which ultimately suffers. It will be the community.

  2. Sam,

    Thanks fot the civil and respectful tone of your post. Mayor Reed, Pierluigi Oliverio and Pete Constant should take note of it as their tact has indeed demonized city workers (the cancers according to Mayor Reed). Much more could be accomplished if both sides demonstrate some respect as you have done here.

    • I would like to suggest that all here take a peek at the Sunday Mercury editorial by Paul Krugman of the NY Times. Here he succinctly reviews the driving force behind Bush, Paul Bremmer, and Wisconsin Govt. Walker. I think it describes Demagogue Reed to the tee. Fortunately the result of what Reed is striving for will not be a direct result in tens of thousands of deaths as Bremmer’s deprived and ignorant policies led to.

    • Frank, full disclosure here: I often hear of public accusations that Mayor Reed and others have somehow demonized city employees, but I haven’t heard him do so myself.  I did hear him use the term “cancer” in his State of the City speech to refer to pension costs, but he never used it the term to refer to people.  I think we all need to take a deep breath here; we’ve got a long struggle ahead, and if we look for reasons to believe that others are taking unfair shots, we’ll find them, whether they exist or not.  I’m trying to set a tone for civil dialogue on this important issue, not to somehow distinguish myself from any of my colleagues.

      • I think we are kind of splitting hairs here. During the Measure V/W campaign Mayor Reed described public safety as ‘feeding at the trough’. There is no flattering – or even neutral – way to interpret that comment. And, despite his effectively private apology to the police department in various briefings, he has made no effort in public to undo the damage of which I am aware. To make matters worse, Not One Council Member contradicted him – then or now.

        Today, and every day for the last month or so, we are confronted with the fact of Mayor Reeds deceptive arguments for V/W as well as resentment from the community which was far less present and which Mayor Reed helped to foment. Today, we are confronted with layoffs, reducing the manpower of an already understaffed police department. Mayor Reed’s assurances that the passage of V and W would save jobs was a lie. And, is he lying now as he fights to reduce employee compensation or was he lying awhile back when in the investorcentric blog (thank you BSM) he stated that a family earning $250k annually was “upper working class”? Is he an unrepentant liar or simply afflicted with an horifically deficient memory? Cost of living hasn’t diminished in Silicon Valley greatly in the last two years. In fact, the price of commodiities – especially gas – is rising steadily.

        Next point and with respect to public safety, I have this to say: San Jose’s police department is only just barely competitive with many other agencies around the Bay. Sure, you can point to Oakland of Vallejo with layoffs and bankruptcy, but San Jose isn’t either or those cities. I’d like to think San Jose has vastly more potential than both from both a social standpoint and a business standpoint. I think the only major commercial difference between Oakland and San Jose is the Port of Oakland. I half suspect that the port is one of a very small handful of commercial prospects keeping Oakland afloat at all. No one wants to see San Jose become Oakland, but the easiest way to ensure that does happen is to cripple its public safety forces. Elsewhere around the bay, other cities are a far more attractive prospect than San Jose.

        An officer who has applied to Santa Cruz S/O has told me that, although gross pay is less, take-home pay is the same as at San Jose, because there are fewer take-aways. The officer who recently made a lateral transfer to Palo Alto? He says that his take home pay is about double mine – and I have far more years with San Jose than he did. San Francisco’s pay and benefits are roughly comparable to San Jose’s. Santa Clara, Redwood City, Fremont are just a few of the other agencies with similar stories.

        I confronted Mayor Reed with this fact – that San Jose, at present, is just barely competitive around the Bay in terms of salary, benefits AND pensions. I asked Mayor Reed at that time how he intended to attract and retain the same caliber of candidates for police officer positions since the practical outcome of the passage of Measures V and W was that it would enalbe the city to create less competitive wage and benefit packages vs. other Bay Area cities. His answer, and this I am capitalizing since it’s very important, stated in front of probably 150+ officers, was that if the PD found itself in a position of being able to attract the same caliber of recruits under the reduced pay/benefit packages he intended to pursue he would be willing to REEVALUTATE THE HIRING STANDARDS FOR POLICE RECRUITS. And yet, other agenicies are champing at the bit to hire San Jose’s castoffs.

        Mr. Liccardo, in light of potentially reduced, non-competitive pay and benefits, in light of the adversarial atmosphere which Mayor Reed, in no small part, has helped to foment, in light of the obvious lack of job security, in light of the disrespectful, dismissive and cavalier attitude with which public safety has been treated by City Hall, how do you propose to hire the best candidates for public safety?

        Finally, I have this closing remark: San Jose’s budget problem is not a problem of employee compensations – that’s simply the obvious direction to point the finger and identify the blame. During the past 10 years of ‘budget deficits’, employee compensation has never been to blame as far as City Hall is concerned. It wasn’t to blame as far as Mayor Reed was concerned back then, as he proved with his public commentary and his votes. Rather, San Jose has an income problem and a problem with wasteful spending. These are not problems created by your employees. Rather, they are created by the decision-makers, the executives of the city, by you, your peers, by your predecessors and, by extension, by those voters who have place you in office. The way I see it, your responsibility has always been to eliminate waste and the ‘extras’, and do whatever you could to see that core services were maintained and to create a healthy business environment – not the labyrinthine monstrosity for which San Jose is derided.

  3. You know that the police and fire unions will not agree to any meaningful downsizing that is needed to make any difference.  So what is left?  Chapter 11,  is what is required sooner or later.
    Then 2% per year worked with a max of 75% for the above employees.  That is still a generous retirement.  Don’t put it off,  Time is wasting.

    • “….police and fire unions will not agree to any meaningful downsizing that is needed to make any difference…”

      Superguest, surely you jest!!! Downsize??? Mayor Reed and your City Council (including Sam Liccardo, Olivero and Constant) along with City Manager Figone commissioned a study to determine how may Police officers SJPD should actually have. At the time the study was accpetedby the Mayor and COuncil staffing at the police department was 1462 sworn officers. The study indicated that SJPD was UNDERSTAFFED BY more than 500 officers! 

      Since the adoption of that report staffing has fallen (currently ) to 1262. THat number INCLUDES 62 officers whose jobs were saved for one year when the Union agreed to nearly 6% in salary/benefit reductions. THose 62 loose their jobs on June 30, 2011. On July 1, 2011 the Mayor and council is threatening to layoff an additional 237 EVEN IF THE SJPOA gives back 10%!!!! IF they don’t agree they will loose 349.

      So given that the Police Department has given back even though dangerously understaffed by the City’s own admission… How much more do you want them to “downsize?”

      Meaningfully – of course.

  4. It’s about time! It would have been more helpful if you had said some of these things during all the months the Mayor and other Councilmembers were trashing City employees. This hardly repairs the damage done to the workforce by the Mayor.

  5. Sam, thanks for posting with a civil tone. I have posted questions for PLO on various of his blogs regarding the budget, and as yet, he has not answered them. I am not sure if he doesn’t have the information at hand, is not inclined to get it or simply won’t answer, but considering it’s my retirement and that of my peers and the taxpayers’ money,  I think we all deserve some answers in the interest of clarity.

    In the interest of convenience (mine) I will simply paste my past post here in the hopes that we can get some…. uuummmmm…. transparency???

    A couple more things I’d like to know

    1. In what fiscal years was the City’s contractual contribution to the pension plans diverted to other expenditures?
    2. Exactly how much money was diverted EACH fiscal year.
    3. To what purposes was that money diverted? How was it spent?
    4. What, if any, return on investment came about as a result of that diversion of funds?
    5. Can any returns on investment be re-diverted back to the pension system in order to make up the shortfall?
    6. Using past fund performance trends as predictors, what would the pension shortfall have been had the City made it’s contractually obligated contributions?
    7. Who were the people responsible for the decision to divert money from the pension fund to other projects?

    On top of that, we are really, really wondering: where’s that much-vaunted transparency Chuck Reed ran on? We have yet to see it.

  6. Nice delivery Sam.  I welcome your comments and hope to see a bridge between Labor and the Mayors office.  I do believe that will be your next step.  If you can continue to stop the demonizing of unions I am all for it.  Currently Unions are attempting to work on giving more back. I only have a couple of request that you look into.
    1.  Slow down affordable housing.  We have “NO MORE” ability to give.  Once the econonmy turns around we can re-visit
    2. How does Constant continue to collect on a pension that No other employee has ever gotten? The special deal of San Jose.
            Thanks

    • Have to agree with you on the Constant issue. He looks plenty healthy enought to be still doing something at the police department and not getting a lifetime disability. Ironinc that he is a team member of the “Chemotherapy Pack” of Reed, Oliverio and Constant ridding the city of it’s cancers (employees) according to Reeds state of the city address.

  7. There are two very major problems with the pension system in its current form.

    #1.  The employees (specifically fire and police) which have retired in recent years were hired under contracts providing 80% or less of their top step salary.  Some of these employees paid into this retirement system (along with the cities contribution) for 20 plus years of their careers.  Through contract negotiations these guaranteed pensions were raised to 90% with the stroke of a pen.  Essentially these employees (no fault of their own) paid into the lesser system for the majority of their careers and only in their last few years paid into a 90% system. 

    Example:  Officer x is hired in 1979 with a guaranteed pension of 80% when he retires.  Officer X contributes his portion along with the cities portion awaiting the day he/she is eligible for retirement.  23 years (not sure the exact year the pension was raised to 90%) or so later the city negotiates a 90% guaranteed pension.  Officer X spends his last 7 years paying into a 90% system along with the cities contribution.  It was only in the last 7 years that the pension system was paid into, that are really fully funded.  The previous 23 years are underfunded by 10% (compounded) leaving a very large gap.

    #2.  All officers and firemen (except external chiefs who are hired) start at the lowest pay scale and rank when they are hired by the city.  They will likely spend the majority of their career at this lowest rank paying into the current retirement system that is in place at the time.  as they promote they receive a 15% step increase along with their rank.  When they finally retire, they will receive 90% (if they work 30 years) of their highest salary.  Essentially they will retire at a pension level that they have only been paying into since they have been in that rank.

    Combine #1 and #2 and you have a very serious problem

    Example:  Officer X is hired by SJPD in 1979 under a 80% retirement system.  Officer X spends the first 20 years of his career at the rank of officer, paying into the 80% system.  20 years in, officer X gets promoted to sergeant along with a 15% base salary increase.  three years later officer X gets promoted to lieutenant receiving another 15% increase to his base sergeant pay.  During that same year the city negotiates to raise the retirement benefit to 90%.  4 years later officer X again promotes to the rank of Captain again receiving another 15% pay increase.  Officer x retires at the rank of Captain after paying into the system (for that rank and pay scale) along with the cities contribution, for only 3 years.  The rest of the years of Officer X’s work are completely underfunded.

    Solution:  Find a way to average an employees years paid into each retirement tier. 

    Example:

    Officer X is hired in 1979 under a 80% retirement system.  Officer X spends his first 20 years paying into this system. = 20 years in 80% system for officer pay.

    Officer X is promoted to Sergeant under 80% retirement system.  Officer X spends 4 years paying into this system. = 4 years in 80% system for sergeants pay

    Officer X is promoted to Lieutenant under 90% retirement system.  Officer X spends 3 years paying into this system.  = 3 years in 90% system for Lieutenants pay.

    Officer X is promoted to Captain under 90% retirement system.  Officer X spends 3 years paying into this system = 3 years in 90% system for Captains pay.

    The math could get a bit tricky but I am sure this would be a very fair retirement and would be completely funded because nothing is paid out that wasn’t paid in by the city or the employee. 

    Since Im not a math wizz i’ll try and do the calculation, assuming an officer is hired under the current 90% system, i will use 100,000 as the base salary (for simplicity).  I will also not factor in pay increases, assuming they will mirror inflation.

    20 years into 90% system at 100k per year (top step officer pay)= 90k when retired
    4 years into 90% system at 115k per year (top step sergeant pay)=103,500 when retired
    3 years into 90% system at 132,250 per year (top step Lieutenant pay)=119,025 when retired
    3 years into 90% system at 152,087 per year (top step Captains pay)=136,878 when retired

    20×90,000 = 1,800,000
    4×103,500=414,000
    3×199025=357,075
    3×136,878=410,634
    Total=2,981,079 divided by 30 years (for average)

    If my calculations are correct officer X would retire as a captain with $99,390 annually.  Under the current system he would retire with $136,878

    I’m sure my math isn’t perfect but hopefully it gives us all something to think about.

    • There is a basic problem with your calculations there City Employee.  First, employee and city contributions are only a percentage of the retirement fund.  When the city has made the claim in the past that the retirement fund is “100% funded” this includes all of their investments, not just the dollars coming in from contributions by workers and the city.  In fact, the pension fund is essentially legalized gambling on the part of the city.

      The city invests in various funds and gambles that their investments will sustain a certain rate of return.  As these rates fluctuate, the retirement fund will also vary up and down depending on the various investments.  Even though your calculations are correct in that employees contribute different amounts at different times and career steps, the city investments are supposed to make up for these discrepancies.  In the good times the city can make so much money that they will do exactly what they did and reduce the amount that they were paying into the fund.  Of course they did not let the workers reduce their contribution. 

      One would think that the city would recognize the ups and downs of the market and over fund the retirement accounts during good times knowing that as certain as death and taxes, those funds are going to dip.  Even an average high school math student knows that the financial markets are a roller coaster with near certain highs and lows.  The city though is plagued by the disease of ambitious politicians who have to spend every dime in their pockets to appease their constituents during their one or two terms. 

      No politician is going to be popular if every time there is a budget surplus, they sock it away for the bad times.  Just like the sick leave policies of the private sector “use it or lose it” is always the order of the day.  City council people have always fought tooth and nail to bring home the bacon for their districts.  Most city council people, and sadly our state and federal senators and congress people alike, know that our ADD afflicted public wants immediate gratification.  Long-term financial planning just doesn’t seem to be in the cards for San Jose any time soon.

  8. I have other questions as well:

    Why is there a $2 million transfer from the general fund to the RDA in the ‘09/‘10 adopted budget?

    Why are there any transfers from the General fund to the RDA if reciprocal transfers are ‘illegal’?

    I would like to also know why, in a time of declining resources – particularly in public safety – the city council (and here you get a pass) has repeatedly voted in favour of converting commercial real estate to housing units – particularly when three high-rise developments downtown have been substantial failures (from what i read in a Merc News article) at attracting buyers. It seems like adding more homes to an already excessive inventory would deflate home values and – therefore, property taxes – even more. It also seems like adding more residents to the city will merely exacerbate the appalling ratio of officers to citizens.

    Lastly, I’d really like to know why it is that San Francisco, with a population 80% the size of ours can maintain a police force which is double the size of ours? I am not intending this solely as a criticism, though many have suggested that San Jose has a tax/fee structure which is onerous to businesses – especially smaller ones just trying to get their start in the city. I don’t know how we compare to SF, but I’ve done enough research on the top 15 large cities to know that our general fund seems a bit paltry compared to many of them. So, I would like to know how San Jose can be more competitive.

    • Officer D,

      You ask “Lastly, I’d really like to know why it is that San Francisco, with a population 80% the size of ours can maintain a police force which is double the size of ours?”

      Really!?  A police officer doesn’t know this answer!

      San Francisco allows businesses to open up and stay open.  They have multiple areas where people are allowed to visit and feel welcome.

      San Jose, mainly the police, dosn’t allow this.  So less businesses open and are sustainable.  Millions in tax dollars are lost.  Which means a city can’t support staff.  Duh!

      • SF also combines City and County government into one entity.  They also have double the day time population, which reflects a lot of business activity which generates revenue.  They aren’t exempt, though, from being overextended and have gone to extremes with fees for everything residents use.  I have a friend who’s ready to move out because of all the stupid nickle and dime fees he and his family are asked to pay even though he’s lived there all his life and the home is paid off.

        But to get back to your main point about SJ and business, the city can do a better job of promoting business.  It has a reputation of being a hard city to do business in, especially for the small folks who don’t have influence in city hall.  Instead of RDA and highly paid Economic Development officials, maybe we could get back to basics and have a small business ombudsman and action center that works to simplify things for small business.  Or do we only rise and fall based upon big business?

        • Ok. I think I get your point from the standpoint of the daytime business and the county and city government entities being essentially the same. However, with respect to the law enforcement entities, I was not counting the Sheriff’s Department, which is a separate law enforcement entity, not included in that 2500 cops figure. On the other hand, I can certainly see your point about them being overextended. And, I am certainly not suggesting that San Jose should have a police force the same size. I think we were doing really well at about 1400 or so. I am just wondering about the gross disparity.

          For the record, I think it’s safe to say that my peers and I agree that San Jose could be a much better environment for business. In fact, we wish it were. We wish we had more prudent and ethical leadership – particularly in the City Manager’s office. And, speaking personally, I really like your idea of the small business ombudsman and the action center to help small businesses. I’d really like to see more small businesses succeed. Personally, I think building business of every kind is the key to San Jose’s success.

      • You may be surprised to know that, although the Police Department my offer input on city policies regarding the closure of service businesses, it is the City Council together with the City Manager’s office which ultimately establishes policy. In this instance, the PD is much like the military: politicians set policy, the officers enforce it, whether or not it’s ultimately in the city’s financial best interest. You might be surprised to know that a number of us have no real objection to keeping businesses open later. In fact, many of us are strongly in favor of less regulation, not more. Many of us even have some outstanding ideas as to how best to support and encourage service establishments. We have no objections to clubs, bars or other venues – only the criminal activities which certain types of clubs seem to attract. Here again, many of us have worthwhile ideas as to how to minimize criminal and disorderly behavior while simultaneously supporting new and stable business/service establishments.

        Unfortunately, City Hall really isn’t interested in what we have to say, even though we (and not they) see firsthand the outcomes of their decisions – for better (or, more likely) worse. Really, we don’t want a moribund, lifeless (dare I say stygian) downtown. We’d like to see it active and thriving and safe. Especially safe.

  9. Nothing that the more labor friendly Council members say can change things as you have to remember they are politicians and they lie. 

    Nothing can be done to repair the damage that Reed has done to tear apart the morale of the City Employee. 

    Reed looks at the City Employee as road block to his greatness, what ever that might be? 

    But he does really think of City Employees as Dog Crap on the bottom of his shoes and keeps trying the scrape us off with every step of his feet. 

    The worst thing is that I actually voted for this fool.  And worse, I met him years before he was a Councilman and Mayor.  He was a different guy, very meek and friendly.  Not like he is today, a corrupt leader of a corrupt Council. 

    The damage has been done, my belief is that the Mayor and Council are in violation of many ethics codes and rules.  The time is now that a Recall needs to start with San Jose’s City Administrators.

    Sam, so far Reed, Oliverio, Constant have really stood out from the rest as the “Real” Villians who “HATE” us low level City Employees. 

    Yes they hate us, as we do the work they want to contract out to their friends businesses.  It’s all about payoff’s for support during the election times and the association with the Downtown Rotary Club. 

    Sam, can you tell me why all of you City Administrators belong to the same Rotary Club and then award contracts to the business members of your Rotary Club? 

    Hmmm? sounds like the Bids are fixed right from the start.

    Good luck with the layoffs,

  10. Officer D,
    I won’t answer all of your questions because I don’t have all of the information, but allow me to answer a few with what I do know about those decisions. I’m told that for two years in the late 1990’s, the City reduced its contribution from what’s known as the full “normal” cost of retirement benefits, but I’m told it was a very small reduction as a percentage of the total bill (less than 5% of that annual contribution, as I recall).  In other words, the City has never taken a big “contribution holiday,” unlike many other public agencies.  The bottom line: even without this very small reduction in contributions, the $3.5 billion unfunded liability wouldn’t be measurably better.  The issue essentially amounts to a rounding error on a number that large. This issue is often raised during public comment, but all the data I’ve seen on it suggests it’s a red herring.
    I couldn’t tell you to what purpose it was diverted, and I wasn’t in office at the time, but would speculate it went toward other General Fund uses—police, libraries, parks, fire, etc.  The decisions about funding pensions were made by those elected officials in office (and their staffs).  Without having been there, I’m in no position to point fingers. I am in the position to have to clean up this mess, so that’s where my attention is best focused.

    • Sam, thank you for being honest as to the cause of this mess.  As a cop who was working through those years I will try and explain my frustrations with your current solutions.  As you know the City assumed all of the liability with the retirement system in making sure that it was always funded.  This was their choice and was made, I believe, because they also got all the benefits of the investments and their lowered contribution costs.  They were required to put in roughly 30 for every 10 that I put in.  Due to the funds growth in the ‘80’s they only had to put in roughly 15 and I continued to put in my 10.  The fund was “properly funded”, so they could do with that 15 whatever they chose to do, however they were on the hook for the full 30 and more if the stock market tanked and the fund was no longer “properly funded.  The City seemed to forget this small fact and evidently began to budget for a 15 contribution and spend the other 15.  Where did that money go and had it been saved where would the fund be now? 

      At the same time our union gave up raises and took better benefit packages for sick time, retirement, and sick time buyouts.  I worked for San Jose for less than other officers in the area, by as much as 15% and they did not contribute at all to their retirement fund, their city took care of that.  We had the better retirement package and to me that was worth it.  But please remember many of these items were the City’s idea and they were not “free” to us, we worked for less.  Each of these items had costs associated to them and were very clear to see.  The City did not fund these items.  It took the pay raise savings and again spent the money somewhere.  They did not establish a fund for the medical benefits I now receive, they did not establish a fund for my sick leave buy out (I worked for three different companies prior to “public service” and all of them had a use it or lose it policy.  At everyone of those companies we all used our sick leave every year.  People are people folks and the sick time will be used, private or public).  The sick leave was their idea and again it was for costs savings.  The Patrol Division has a “minimum staffing level” but if an officer calls in sick, they do not backfill the position.  We also get comp time instead of overtime pay, but due to staffing levels you could never get a day off.  So officers were forced to call in sick to get a day off, even though they may have had four weeks of vac time and six weeks of comp time on the books.  So a team that should have had seven officers was going out with four or five.  So rather than hire more officers you just reduce minimum staffing and add an incentive for saving sick time, again we gave up money for that benefit. As City Employee has pointed out, the City also increased our retirement rate, again in place of a raise and again failed to properly fund the retirement plan even though these costs were clear to see.

      The City has been making up for these loses by increasing the employee contributions to both retirement and medical.  They now want to take away the sick time buyouts and even though the City and media don’t acknowledge this point, the police union is talking with them on all these issues and has given back a bunch of money already.

      If the City is supposed to balance it’s budget every year, how does all this money that is spoken for, not be placed in a fund and not seen as a negative on a balance sheet?  Who is responsible for this misappropriation of funds and failure to balance the budget.  you say that is not your concern, yet you are going to want me to give back some of my money in order to make the budget work and let the criminals who stole this money walk free.  Sorry, was a cop too long and that won’t work for me.  All your solutions ignore the fact that these people stole money from the taxpayers and the City employees and you don’t seem to believe that is an issue.  Taking back money from retirees and employees may “fix” your problem but it does nothing to stop the same problem from occurring again.  When you address this issue and begin a criminal investigation into your own office, then you will have my full support.

      • “All your solutions ignore the fact that these people stole money from the taxpayers and the City employees and you don’t seem to believe that is an issue.  Taking back money from retirees and employees may “fix” your problem but it does nothing to stop the same problem from occurring again.  When you address this issue and begin a criminal investigation into your own office, then you will have my full support.”

        CALLING THE CITIZENS AND EMPLOYEES OF SAN JOSE TO UNITE AND ENSURE THAT THOSE WHO ARE RESPONSIBLE ARE HELD ACCOUNTABLE. UNITE!!!!

    • Could you answer one question. Who on Council is in favor of taking sick leave payout from 75% with a maximum to zero, as is what is the authorized bargaining position of management? It is arrogant to think that some payout has no reason behind it. This is analogous to saying Food Stamp abuse is a serious problem, so let us just eliminate the program.

    • So what you are saying is that the record of these expenditures is so shoddy as to be effectively unavailable to you as a City Councilman? You saying “I’m told…” is a far cry from “According to the budget documents for years x, y, and z…” And why is it that your assertion that “the City has never taken a big ‘contribution holiday’ is rather different from the story I get from people who’ve been on the board of the POA? So, too, is there no record of how the funds were spent? I’d like for everyone to be able to see the data you’ve seen which suggests the issue is a red herring. I’d also like to see the expenditures the city has made toward non-core services out of the general fund. For instance, what’s up with the $18 million dollar transfer from the general fund to the RDA and why is such a transfer of funds only legal in one direction?

      Also, I am led to believe that, for various reasons, a pension fund that is 80% funded is considered to be fully funded, much as ours is now. I wondered if you could explain the disconnect between Mayor Reeds message on the issue and what I’ve been told by someone familiar with the pension issues.

  11. Hollywood Charlie has been hitting all the major media outlets of late. These include “60 Minutes” and “The Wall Street Journal.”
    This is usually a sign of higher political ambitions.

    Sorry Charlie, your lack of charisma will hinder your professional goals.
    It’s unbelievable how elected officials can walk on the backs of hard working city employees that have called San Jose home for decades hoping to make a name for themselves.

    Remember Charlie, this is our house. You just live here.

    Unions, just stand your ground. This mayor is weak !

    • Weak is a slight overstatement. He has his own cheer-leading AM radio station and portraits suitable for framing at the White House in the Metro. Plus the incessant love affair with Guardino.

      • Guardino always goes with the winner.  He raised money and organized some high level support from high tech leaders (HP, …) for Chavez in the mayor’s race when she was the early fave.  Then he started buttering up Reed after he won.  Nothing wrong with that.  It’s just smart politics.

  12. Sam

    Please comment on your 4 + year Council voting record:

    – low income housing that does not pay its own share of revenue while San Jose excessive low and moderate housing is a tax subsidy for other city’s jobs

    – approving more conversions of jobs lands to housing making budget deficit worst while Council knows it lacks businesses tax base to pay for required housing services or adequate city workers

    – downtown projects like city paid or loaned $5 million for McEnery Marketplace that have little new taxes

    – 10’s millions in yearly tax subsidies to tax money losing downtown community groups, museums, theaters sport owners, downtown association, events who expect more tax subsidies taking city services away from other city neighborhoods

    – economic development projects that don’t pay back taxes spent or produce low income jobs requiring more city tax subsidies

    – yearly raising business taxes, fees and charges to highest in Silicon Valley driving businesses and jobs to other cities

  13. Okay, the take-away message is you can’t blame the unions or the individual workers for the problem, the overly generous awards were done by politicians who profited politically from being irresponsible with the city’s finances.

    So I get that…but I’m wondering what happened with the council-manager form of government that was supposed to provide checks and balances to keep the children on the council from doing to much damage.  I thought there was supposed to be checks and balances where a long serving city manager and upper management payed attention to liabilities and long-term fiscal health.

    I get that we moved away from that a little with the strong mayor system rolled out under McEnery, but we seemed to still have a competent and professional manager and administration.  I remember something about a past mayor replacing both the city manager and RDA chief shortly after taking office, was this when the system of checks and balances failed?

    On the pro-active policy side, 2nd Tier pensions are lousy and don’t fix the real problems, but you got to that in your post.  Nonetheless, we’ve got to start rolling out the framework of second-tier pensions for long term reform, even if it won’t help the immediate financial plight.  Recruitment and Retention are likely to suffer, but can be mitigated with some thoughtful planning, which can happen now while you roll it out.  My suggestion is to have the best, most progressive and balanced hybrid second-tier pension plan around and then work backwards to address the current employees, asking them to either retire early with reduced benefits (golden handshake) or opt into the new system for reduced benefits but longer employment.

    BTW – Please see that the council, council staff and city management all lead by example and have the 2nd-tier apply to them first.

    Also – bankruptcy might still be the only option, but has anyone entered into CalPERS negotiations on what it would take to move the whole system over including past and current liabilities?  They might be better able to carry financing for the transition costs which could be spread over 30 years perhaps.  Former council members in the State Assembly and State Senate could also be tapped to carry special legislation to allow the move from independent pension system to CalPERS agency.

  14. What terrific comments. Thanks for the historical information showing how the city’s leadership went wrong. Too many are refusing to be accountable (much less responsible), which means the only consequences they accept are to demonize workers and leave themselves out of the equation. How is it that city officials dump on workers but won’t take out City Hall agencies, like redevelopment, or groups like Team San Jose, which have mismanaged and lost so much money for the city? Also don’t forget that Sam and others are dangling that baseball stadium as the economic salvation for San Jose. Let’s pray that Brown will reorganize redevelopment; it might be too late for San Jose which is speeding toward a fiscal weapon of self-destruction that is set to go off just a few years after the stadium is built.

  15. Well said Sam. Thank you for coming out and owning the fact that our electeds are solely responsible for the financial mess we are in because THEY and only THEY make the final decision on spending. Also, thank you for acknowledging that the way this issue has been treated by our Mayor and some Council members has been unproductive and harmful to collaborating with Unions, and employees.

    Having said that, I have seen decisions by the Civil Grand Jury on needing to cut pensions etc. but I have never seen a decision on the wasteful over spending done by electeds. Why is that?

    Council Member Oliverio likes to refer to reports, and surveys to tout his point, but refuses to acknowledge the fact that wasteful over spending is occurring at City Hall right now! To take fifty thousand dollars from employee concessions to build a gym in the basement of City Hall is outrageous! That would have kept a library staff person, or a community center employee working!

    Council Member Constant likes to say he is a retired Police Officer, and touts reducing pensions, wages etc., but he is collecting a lot of money from the very pot he is criticizing!

    I’m a firm believer in collaboration, negotiation, and fairness, but I don’t see our electeds behaving the way they should. I see a lot of hypocrisy, and ignoring the facts.

    When you (Not you personally, the City.)  brought citizens in for your budget exercise, it was rigged. You didn’t allow citizens the opportunity to take your entire budget and disperse funds the way they wanted! The survey’s Oliverio does, and the one the City did via phone on plastic bags, etc. are also controlled to get the answer HE/THEY want. (In college, I took a detailed course on survey creation, so I know these surveys are rigged to get the outcome desired by the person who designs them.)

    If you are going to ask for citizen input on things, the very least you could do is present the FACTS and allow them to chose for themselves WITHOUT mudding the waters before they form an opinion.

    • “When you (Not you personally, the City.)  brought citizens in for your budget exercise, it was rigged. You didn’t allow citizens the opportunity to take your entire budget and disperse funds the way they wanted! The survey’s Oliverio does, and the one the City did via phone on plastic bags, etc. are also controlled to get the answer HE/THEY want. (In college, I took a detailed course on survey creation, so I know these surveys are rigged to get the outcome desired by the person who designs them.)”

      So much dishonesty it’s scary.

  16. Sam,
    I think our city council and mayor should be a part time position, as it is in all of our neighboring cities. What are your feelings on this? I have brought this up many times in Pier’s column and never gotten a response. This could save our city millions of dollars a year.

    • City government is incompetent, wasteful, and occasionally corrupt.  And the sun rises in the east.

      The poor little public employee and labor unions just happened to be standing there when the truckloads of cash rained down upon them from city offices high above.

      Government + public employee unions had a great, incestuous ride together.  And now it’s over.

      • Green eyed, envious, jealous. Tell me you wouldn’t except the money your employer gave you and I’ll show you an ocean in Oklahoma I have for sale. What an idi-t.

      • Jealous?  No.

        Angry that I’m carrying the cost of your cadillac compensation on my back?  Cadillac compensation that was negotiated in a backroom between union owned city officials and the unions?  Yes.

        Now that the public sector compensation ponzi scheme is reaching it’s nadir – know that you and your entitled attitude will be welcomed to the private sector with open arms. 

        It’s all rainbows and unicorns out here dontcha know.

  17. We should also look at other retirement programs, private and public that are more solvent. The Teachers CalSTRS is funded for decades. My Fathers private sector defined contribution plan has more money it after 20 years of retirement than when he retired. Chuck Reed talks about “Cadillac” benefits. My deceased Dad’s fund pays the same to my Mother as after his death (50% for CSJ), and the principal carries over to her children, while the City ends contribution if the spouses leave the picture. Something is very wrong with the City retirement system not related to the 2.5% accrual and 55 year start date.

    • Hey Joe,

      Calsters is having very similar problems to San Jose.  Search it on the mercuray news site.  It doesn’t have the money to pay what is owed without the CA tax payers paying the shortfall.  That is why brown is trying to take the RDA money from throughout the state.

  18. Blair – great points

    “the overly generous awards were done by politicians who profited politically from being irresponsible with the city’s finances.”

    – political payoffs – $2-4 billion in downtown, city and airport union construction jobs, $2-3 billions to city employees for higher and retroactive benefits / pensions, billions to housing developers for commercial to housing rezoning and new city services not cobvered by new housing fees or taxes and $1-2 billion for downtown tax subsidies etc

    “what happened with the council-manager form of government that was supposed to provide checks and balances to keep the children on the council from doing to much damage.  I thought there was supposed to be checks and balances where a long serving city manager and upper management payed attention to liabilities and long-term fiscal health.

    I get that we moved away from that a little with the strong mayor system rolled out under McEnery “

    – it started under McEnery, got worst under Hammer and went out of control under Gonzales when Council politicians changed Council – City Manager checks and balances system – City management either sold for higher pay and pension or managers who objected were early retired or fired if they would not go along with deceiving voters and taxpayers who are now stuck with low services and high bills for managers sellout

    Council brought in new City Managers, Redevelopment and Department Heads who traded their public duty to taxpayers and voters for high salaries and pensions

    City staff did what politicians wanted and even worst purposely did not tell public and taxpayers about future pension and budget problems, denied for years city had financial problems and made up false economic benefits reports to justify wasteful Council political payback spending while businesses by thousands and millions tax revenue left San Jose

    Any questions look at the extremely high increases in salaries, benefits, bonuses, pension and multiple promotions for city management for going along with deceiving voters  

    Are you buying the BIG LIE that city employees who did not make decisions are to 100% blame while politicians and city management who’s responsibility under City Charter is to run city for public good, be accountable and balance out or tell public about any irresponsible politician’s actions but kept silent

    City managers want you to believe they were “just following orders” from Council and are innocent of any blame, charter responsibility or accountability

    • “Are you buying the BIG LIE that city employees who did not make decisions are to 100% blame while politicians and city management who’s responsibility under City Charter is to run city for public good, be accountable and balance out or tell public about any irresponsible politician’s actions but kept silent”

      Buying/Not Buying.  It’s irrelevant. 

      The taxpayer golden goose is cooked and the union/city leg humping is drawing to a close.

      Decertify the PEU’s and limited/part time city government is exactly the ticket.

      • There, there Not Even Worthy. 

        We know how upset you must be to think of your sick pay binky being taken away.  Your 250% pension match ice cream cone about to fall on the floor?  It’s all enough to make one rock back and forth whilst trying to find a happy place or string words into a semi-coherent sentence.

        • That was great. 

          I feel for city workers.  Just not enough to keep paying for something I cannot afford.  As a parent I am trying to live within my means every month, as a taxpayer I appreciate Councilman Liccardo and Mayor Reed trying to make sure the city does the same.

    • You say:
      “Already consuming one out of every four General Fund dollars”

      I too am concerned about where MY tax dollars are going.  You clearly and deliberately denote “General Fund”.  How many funds do we have?  How much does employee cost consume over all funds? 

      Who is consuming one out of every four Redevelopment Fund dollars?

      In November, RDA capital expenditures totaled $2.1 million. 
      $705,000 Tom McEnery and Urban Markets LLC
      $135,000 San Jose Downtown Assoc. for promotion and marketing
      $594,000 for direct and indirect operating costs.

      In December, RDA capital expenditures totaled $2.3 million.
      $409,000 to Garden City Construction for Civic Auditorium PhaseII
      $178,000 reimbursement City Manager’s office support
      $139,000 for lease of automatic toilets. (WHAT???)
      $1,186,000 for direct and indirect operating costs.

      THESE ARE STILL MY TAX DOLLARS RIGHT???

    • We would like to know,
      A general overview of the City Budget for last fiscal year 2010 / 2011 is at the following link;

      http://www.sanjoseca.gov/budget/FY1011/2010-2011AdoptedBudgetinBriefUpdated10-13-10.pdf

      This document provides a basic overview of the City’s overall budget.  The first three pages provide a basic overview and outline of the General Fund (about $950 million), the Capital Funds (about $918 million) and the Special Funds (about $1.3 Billion).
      I hope this helps to explain how some of the funds are restricted and why the focus is on the General Fund which pays the salaries and benefits of most City Employees. 
      There are difficult decisions ahead to balance the budget and no easy solutions like thinking the other 74% of the budget will solve the deficit of the General Fund.  I wish the best to the City Council, the City manager and Department Heads as they work to find solutions.

      • ” I wish the best to the City Council, the City manager and Department Heads as they work to find solutions.”

        What about the unions Darryl?? Again shows your allegiance and your one sided views of the political atmosphere in this city…. 

        By the way, are you blogging from your Masarati?? I think that’s illegal….

        • Ernest,
          My allegiance is the City of San Jose, a city that I love and dedicated 33 years of service.  The City Council, City Manager and the Department Heads are the ones that make the final decisions and must present a balanced budget by June within the framework of the City Charter, not the Unions.  I’ve been on both sides and have respect each, you haven’t.  I hope the Unions will participate with open honest communications within the framework of the various MOU’s to find solutions and respond to the City Council direction.  Some unions stepped up last year with serious discussion and concessions; some did not agree to concessions such as the Fire Union which resulted in serious reductions and layoffs.  With the change in Fire union leadership I hope a more collaborative relationship will emerge and I wish the new president all the best.  I have the utmost respect for the City employees who are the ones that deliver the service to our citizens and I hope the impacts can be minimal for them and any service delivery reductions that may have to be implemented to balance the structural budget issues. 
          My post was to provide a link to a document that provides the basic overview of the various budgets in the City of San Jose.  I hope the link will help people to understand the various budgets in the City as many talk about the overall budget like it is all available for employee salaries and benefits, but as you can see by the link it is not and why the focus is on the General Fund.  Lastly, I never talk on my cell phone without hands free and never text while driving and I would recommend the same for you.

  19. ““Rather than dumping responsibility on employees, we should put it where it belongs: on elected officials. Politicians happily agreed to union contracts with unsustainable promises, and in many cases, those politicians benefited politically while leaving taxpayers holding the bag.”“

    Someone has finally made an honest statement. Thank you. This means a lot. It is easier to work out solutions when there is trust across the board. All we are asking for is honesty and good faith bargaining.

    • That honesty and accountability has to work both ways.  When is it that the unions, both leaders and member rank & file, will accept that the elected officials have largely been bankrolled by them?  The leaders that that have put us in this precarious financial situation are union backed leaders!!  If the unions did a better job of selecting their candidates they’d realize that backing the person who says they’ll vote for your increases and protect your jobs but have no secure way of funding it long term is just borrowing trouble. 

      Now its time to pay up.  Go back and be angry, upset and frustrated with all your union backed elected officials.  Gonzalez, Chavez, Kalra, Campos, Nguyen, Diaz and all the rest who made those sweetheart deals with NO plan on how to pay for them longterm is what got us in this mess.  Thank God Liccardo and Reed are leading us out of it!

  20. 1. All employees giving up salary increases for the next five years.

    2. Somehow figuring out how to roll the sick leave pay into deferred comp and paying into it over a number of years, until paid off.

    3. Offer a Golden Handshake. Employees who are at least 55 and within 2 years of retirement can be bridged two years on their time and given 10% on their retirement points to make it 2.5 x 15 = 37.5% of their salary. This way, you get people who are at the top step to retire, which will save the City money, as well as saving retirement payouts for those who otherwise would have gone on to work 20-30 years. They would need incentive to retire, so the 2 year bridge to get them to 15 years and the extra 10% on their points for pay out would be a small incentive but enough to allow many top step employees to leave.

  21. The reality is that San Jose gets a screaming deal on Police and Fire services.  When the budget (by dollars or percentage) is compared to other large cities, this is brutally obvious.  the staffing levels in San Jose are far outside the standard deviation, yet the services are top notch (Top 5 Safest Large City).

    Police Officers in San Jose pay far more in retirement than any other in the USA.  The City has never paid for quality safety equipment (except the pistol and ballistic vest) which means officers had to replace junk belts/holsters etc out of their own pocket- no there’s not even a uniform allowance.

    SJPD used to be good place to work, with opportunities to serve the public and still gain diverse training/experience.  Now, it’s poisonous.  The hiring standards will suffer immensely as will the level of service enjoyey for decades.

    If the goal of our leaders to turn SJ into LA, then continue marching down this path… the smog and foul politics are well within sight.

  22. Somewhere above I saw the name Constant. I’m assuming this is Peter Constant.

    For those of you who are unaware. Constant owned and operated a photo studio as employed as a Police Officer for the City of San Jose. This same character pulled off the ultimate performance when he managed to squeeze a work related disability from the CIty. He then followed it up with an encore performance into City Council.

    I swear he won “Best Actor” last night.

    How do you manage to have the CIty pay you for a fraudulent disability and then manage to have the city pay you again? I’ll tell you how! Attack public safety.

    Now listen, your going to see an attempt at a trifecta. This will be when the Oscar winner runs for SHERIFF.

    I will launch a media campaign like this valley has never seen to prevent this from happening.

    The state workers comp fraud department would salivate if this case was thrown their way.

    I recently saw an old video of Constant on Youtube. It’s sad at the swearing in of young officers this guy didn’t have the decency to wear a suit and chose jeans instead. The poor delivery of his speech and the weak content of his message made for a sad moment for that poor class of recruits.

  23. Sam,

    What I take away from your article: the city of San Jose’s only option for survival is bankruptcy.  San Jose faces huge deficits in this year and in the upcoming years and nobody has a plan on how to even begin to balance the budget.  How many officers are we going to fire next year?

  24. “Council Member Constant likes to say he is a retired Police Officer, and touts reducing pensions, wages etc., but he is collecting a lot of money from the very pot he is criticizing!”

    And it needs to be investigated.

  25. Much talk, talk, blog, blog and blog about “Good Old” Pete Constant but has anyone complained to State Fraud Office with wrestling and fishing videos of “disabled Pete” ?

    The Workers’ Compensation Fraud Program was established in 1991 through the passage of Senate Bill 1218 (Chapter 116). The law made workers’ compensation fraud a felony, required insurers to report suspected fraud and established a mechanism for funding enforcement and prosecution activities. 

    Senate Bill 1218 also established the Fraud Assessment Commission to determine the level of assessments to fund investigation and prosecution of workers’ compensation insurance fraud.  The funding comes from California employers who are legally required to be insured or self-insured.  The total aggregate assessment for Fiscal Year 2008-09 is $48,136,818.

    http://www.insurance.ca.gov/0300-fraud/0100-fraud-division-overview/0500-fraud-division-programs/workers-comp-fraud/index.cfm

    To report suspected fraud or reach Fraud Division staff, address your e-mail to [email protected].

    The Fraud Division has established a method for consumers to report suspected insurance fraud. It is important to know that notification of insurance fraud may be made anonymously. You may contact any of the Fraud Division Regional Offices directly

    Silicon Valley Regional Office
    Laurel Robinson, Captain

    18425 Technology Drive
    Morgan Hill, CA 95037
    Phone:  (408) 201-8800
    Fax:  (408) 779-7299

    http://www.insurance.ca.gov/0300-fraud/0100-fraud-division-overview/0400-regional-offices/

    Maybe Jerry Brown can save a $$$ hundred million by having state run free tv and radio public announcements on how to submit contact state fraud complaints?

  26. Sam,
    I am a Firefighter for the SJFD and am glad to hear the tone change by you. It is unfortunate that the Mayor and others have chosen the path of bashing rather than negotiating. I know that the SJFD Union now has a new President and has been working with Employee Relations to come up with some financial solutions. I think we are more than willing to take needed cuts in total compensation, it seems we just need to find the correct structure. I can tell you as a line Firefighter the past few years have been frustrating as despite what people say, we do all care deeply about what happens to the citizens we serve. Thanks for opening the door.

  27. “As it is, Chuck Reed has found a paper tiger to direct public angst at.  He has been wildly successful at diverting attention from city financial incompetence and sicking the most rabid of media and citizenry on every labor unit within the city, especially public safety.”

    It is the Lawyer Game. When things are looking bad for their side they start throwing out other issues, lies, whatever, to deflect and skew things in a different direction and away from their issues. In this instance, to deflect from the mismanagement of taxpayers money as being the TRUE cause of why we are in this mess. He had a mission and he set out to stir the pot to cause the public anguish. Like you stated, had the City continued to contribute to the retirement funds when times were good, we would not be having this conversation. Instead, they used the money for pet projects, give aways and other foolish ventures. A fool is soon parted from their gold. Guess what?

  28. ” The fact though that the city reduced their contributions during the fat times, ignoring that most basic of premise to save for a rainy day, is huge.  Add to this that the city has squandered money on excessive social programs, nice but optional building projects, and other mismanagement of tax dollars and the situation changes.

    The simple fact is, had the City of San Jose continued to contribute their normal share into the retirement funds and been more fiscally responsible during the good times, we would not be in as serious of a mess.”

    To clarify City Hall reduced their yearly pension contributions by taking credit for pension fund investment earnings rather than putting pension investment earnings into a reserve fund for any market downturns

    This allowed Council and City Manger to spend the millions in general fund taxes that normally would have gone into pension funds on Mayor’s and Council’s political paybacks and ego projects

    City employees were not given a credit for pension fund earnings even though their money generated earnings and had to pay the full amount of their pension contributions while city did not

    Now Mayor, Council and City Manager blame city employees for pension deficits rather than Council’s and City Manager’s bad financial management of spending pension reserve money

    City hall says they contributed all they were required to except for 2 years for federated employees if you don’t count the millions in reductions for city’s contribution from pension fund earnings

    mayor , City Council and City Manager never clearly have explained their decisions and spending shorted city employees normal pension fund contributions

    • the pension money was used to pay for overruns and budget issues as a result of the new city hall.  Where were the smart employees to stop that?  They all love there dusty run down dirty window ediface at this time.  Maybe the employees should be given a piece of the city hall property.  they paid for it.

  29. You should demand a complete report on the funding for the new City Hall. If the public ever really knew how funds were shifted and hidden to make it look like this monstrosity was cost-efficient they would storm the reactor dome and bring it down.
    The reign of terror of the Gonzales/Borgsdorf years continues to haunt the city. Meanwhile, they collect their pensions and feel no remorse for the near-fatal damage they inflicted on the City.

  30. “Politicians happily agreed to union contracts with unsustainable promises”

    “Angry that I’m carrying the cost of your cadillac compensation on my back?  Cadillac compensation that was negotiated in a backroom between union owned city officials and the unions?  Yes”

    Here we go again with perpetuating the myth that public worker pensions are inherently “unsustainable” and that the contracts negotiated in good faith by the unions in the light of day were corrupt and excessively compensated public workers.  The simple truth is that when the current contracts were negotiated, they were fair given the conditions at the time.  The public sector was making money hand over fist.  Private sector perks were rampant and public service was looked on with disdain.  The various unions negotiated with the city to try and reach some kind of parity.  The city has never been able to compete with private sector salaries and therefore the pensions and other retirement benefits were used to provide some incentives to otherwise qualified workers who might head to the private sector.  As stated by others, sick leave buyouts, pay raises, percentages at retirement, were all agreed upon willingly by both sides of the table.

    Sam, you stated the situation yourself in your post. “After all, employees fairly bargained for these benefits. Moreover, even as many taxpayers pay more for those retiree benefits, we would do well to remember that many employees do not actually get much richer. In many cases the costs have been driven by factors having nothing to fattening any employee’s wallet, such as soaring health costs, longer life expectancies and deep market losses.”

    However, you left out one very important part.  If all of the city’s current pensions problems were based solely on an economy that took a free fall, then certainly most city employees would feel some sense of obligation to help out.  The fact though that the city reduced their contributions during the fat times, ignoring that most basic of premise to save for a rainy day, is huge.  Add to this that the city has squandered money on excessive social programs, nice but optional building projects, and other mismanagement of tax dollars and the situation changes.

    The simple fact is, had the City of San Jose continued to contribute their normal share into the retirement funds and been more fiscally responsible during the good times, we would not be in as serious of a mess.  The over used term “unsustainable” would not be trotted out every post and the citizens of San Jose would not feel the need to jump on the anti-union bandwagon that Chuck Reed and his minions consistently use. 

    As it is, Chuck Reed has found a paper tiger to direct public angst at.  He has been wildly successful at diverting attention from city financial incompetence and sicking the most rabid of media and citizenry on every labor unit within the city, especially public safety.  I think the goal here is clear and it is union busting plain and simple.  Union haters have managed to gain some momentum and by blaming city, state, and federal woes on organized labor, it masks the true culpability on the parts of elected officials.

    I believe Mayor Reed and his cronies have adopted the Rahm Emanuel mantra “You never want a serious crisis to go to waste.”  This financial crisis has allowed some council people and city managers to try and put their finger on the scales and tip the balance of power from one that has been traditionally even in San Jose to complete control by city officials. Collective bargaining, binding arbitration, and organized labor on the west coast are a far cry from some of the corrupt shenanigans that have taken place back east.  Nevertheless, the unions have been characterized as shady greedy players that have no interest in a successful city, only their own wallets.

    Trust me, most unions are well aware of how the auto unions nearly drove all American auto makers into financial ruin.  Our city unions want our city to be financially solvent, successful, and cohesive.  Many city workers are also tax paying citizens.  Be that as it may, union workers are not going to be left holding the bag for complete financial incompetence on the part of some in the city.  Yes, the economy tanked.  Why is it then that there are many cities who are able to ride out the storm?  Some of these cities actually contribute the entire pension contribution for their workers (instead of the over 20% by public safety). Some of these cities continue to give their workers pay raises.  Some of these cities are not laying off workers in droves and some are even hiring. This is the billion dollar question and one that our city council does not want to answer. It is far more convenient to find a scapegoat. And sadly, it is working well given the complicity of the media.