Council Backs Mayor’s Budget Message

The San Jose City Council unanimously approved Mayor Chuck Reed’s March Budget Message, but the action came with a dire warning to the public: The budget deficit is likely to grow in the next two months, and layoffs and service cuts will be severe.

Even with pay and benefit concessions from 11 employee unions, the City may still have to lay off 230 police officers, 95 firefighters and hundreds of other employees. And the cuts to thebudget won’t begin to address changes that Reed calls for to the city’s costly pension system.

Approval of the budget message at the March 22 meeting was a necessary step to launch the number crunching and cost-saving proposals that will balance a budget now estimated to be at least $120 million short. The message gives the City Manager and her senior staff direction in making those proposals. Police and fire departments have been asked to trim 10 percent of their budgets, and other departments, 30 percent.

Immediately after taking action on the budget message, the council voted 9-2 to accept a two-year contract agreement with the San Jose Fire Fighters, International Association of Firefighters, Local 230, that calls for a 10 percent cut in pay and benefits. The Council did not support a proposal by Councilmember Sam Liccardo to reject this agreement with the firefighters and go back to the bargaining table to address pension reform.

While agreeing that Liccardo’s intent to deal with pension reform was critical to the fiscal future of the city, council members argued that the timing is wrong and the city should honor its agreement with the firefighters now and continue to work on pension reform later.

“Not only has the train left the station,” said Councilmember Pete Constant, “but it has arrived at another station.”

Liccardo and Councilmember Pierluigi Oliverio voted no on the firefighters’ contract agreement.

Council members, for the most part agreed with the mayor’s priorities spelled out in the budget message released on March 11, which included funding the senior nutrition program, health insurance for children, crossing guards at elementary schools, the San Jose Conservation Corps and the BEST anti-gang program.

But details of proposed cuts in the budget won’t be known until a draft budget is released on May 2, which leaves residents with a lot of uncertainties: How many community centers will remain open? Will library hours be limited to three days a week, will parks and streets be maintained and streetlights in neighborhoods keep shining?

More information could be available at community meetings in each council district, beginning with District 2 on April 6.

At the first budget hearing on March 15, Reed set a goal of keeping services at this year’s level, and opening new community centers and libraries in the next five years. But Reed reiterated that all that depends on achieving pension reform and finding more cuts or new revenue.

“We are going to lose ground in the next fiscal year,” Reed said.

Also uncertain is the future of the San Jose Redevelopment Agency, which Governor Jerry Brown has proposed eliminating along with about 400 others in the state, and the impact of that action to the city’s general fund.

Most of the speakers addressing budget issues at the meeting also supported the mayor’s direction in the budget message, including representatives from the San Jose Silicon Valley Chamber of Commerce.

“The Chamber supports the effort,” said Pat Dando, the Chamber’s outgoing CEO. “But we are highly conscious of the fact that this is simply a short step to a longer step that needs to be take on the road to pension reform. We can’t continue to cut public services to the community.”

Steve Kline, a neighborhood leader in the Strong Neighborhoods Burbank/Del Monte area, said, “The community and neighborhoods have been stirred into action with your message.”

Kline outlined a three-point program that he had proposed in a letter sent this week to the mayor, asking budget makers to look at reducing non-personnel costs, negotiating with contractors for lesser contracts and requiring the Redevelopment Agency to pay money it owes to the city’s general fund.

At the request of Oliverio, budget director Jennifer Maguire disputed estimated savings figures proposed in Kline’s program as well as pointing out that the city was trying to renegotiate contracts with vendors and that the Agency funding referred to was already restricted to paying for certain debts.

Kline said after the meeting he had used figures given to him by the city in calculating savings and the residents’ message was to point officials in a direction other than staff cuts.

“We just wanted to change the conversation today,” he said. “We weren’t successful but we’ll keep trying.”