SAN JOSE (CBS SF) — A spokesman for San Jose’s police union said Friday that labor and city officials may be closing in on a deal to roll back pension reform Measure B in exchange for cost savings and a resolution to a bitter, years-long legal and political conflict.
Tom Saggau, spokesman for the San Jose Police Officers’ Association, said that a breakthrough came Wednesday, when Mayor Sam Liccardo sent a letter to city employee unions saying the City Council might agree to resolve issues on pensions, disability and other aspects of Measure B as part of a “global settlement” this year.
Saggau said that could mean that Measure B, and the lawsuits filed by unions against it and fought by the city, could be settled while the city and the unions bargain simultaneously on employee labor contracts that expire this year.
“We’ll be discussing both of them for a global settlement in 2015,” Saggau said. “So, it’s pretty significant.”
“This is really from our perspective a very positive development,” he said.
Saggau said union and city officials conceivably could meet as early as next week about legal settlements and issue discussions after which “Measure B would go away,” he said.
“Both sides would end litigation and appeals” concerning the measure, he said.
The union would be amenable to proposals that would reduce the city’s costs to pay employee retirement and disability pensions, replacing what Measure B mandated, he said.
One controversial provision enjoyed by some police pensioners, the so-called “13th check” pension bonus at the end of year, would be eliminated, saving the city $18 million annually, he said.
Another topic would be to have second-tier retirement plans for new officers in place that are “competitive to retain and attract police officers,” he said.
The union would also be agreeable to a disability pension plan “without abuse,” a pension pay cap “that has to be lower” and having employees work longer and contribute more to their retirement plans, he said.
Saggau said city officials have had a standing goal of returning to the level of service the city had in 2011, the year 300 police were laid off when San Jose had to cut costs due to the national recession of the late 2000s.
“We have not been on the same page for four or five years,” he said. “At least we are in a place where we can have an honest dialog and that is what is really encouraging to us.”
Michelle McGurk, spokeswoman for Liccardo, said the mayor and City Council came up with the settlement proposal in a closed session on Tuesday and that the city is “eager” to return to discussions with the POA.
“We hear that the union is interested in getting to the bargaining table and that’s good news,” McGurk said.
In his letter, Liccardo said the city would pursue legal settlements if the unions met conditions that “achieve all reform objectives that the Council deems necessary to the public interest, including improved city services, and the sustainability of our retirement plans.”
Liccardo said he wanted to use the union-proposed “quo warranto” legal strategy to resolve issues involving the voter-passed Measure B, but if the approach were to fail, the City Council could pursue a new ballot measure in 2016.
Measure B, which was passed by about 70 percent of San Jose voters on June 5, 2012, required that new employees pay 50 percent of pension costs, while current employees would be given the option to choose a lower-cost plan or pay more for their current one.
The measure also gave the City Council the right to temporarily suspend retiree cost-of-living adjustments during fiscal emergencies and require voter approval for any future increases in retirement benefits.
In 2012, then-Mayor Chuck Reed, an advocate for pension reform along with then-City Council member Liccardo, said that the city’s retirement costs had tripled in the previous decade and cost the city $245 million per year.
But the measure met with virulent opposition among police during that election and in the more than two years since it passed, with Saggau complaining that it was illegal because it went against the labor contract the city signed with the POA.
The POA sued in court and won a partial victory last year when a judge threw out part of Measure B but retained other parts.
The union also made large contributions to the campaign of their candidate for mayor, Santa Clara County Supervisor Dave Cortese, who narrowly lost in the General Election last Nov. 4 to Liccardo.
Liccardo maintained his support for Measure B and pension reform during his campaign.