Just when it looked like all hope was lost for the city and the police union to come to an agreement in negotiations over pay cuts and pension reform, a tentative deal was reached Thursday night.

The gloves have officially come off in labor negotiations between the city and public employee unions, and whispers of potential strikes are being heard in certain City Hall corners. On Tuesday, the City Council imposed 10 percent cuts in total compensation for four unions by an 8-3 vote. The cuts in pay and benefits will affect more than half of the city of San Jose’s employees.

City Manager Debra Figone passed on applying for a grant that would have saved the jobs of more than a few dozen San Jose police officers but included some significant costs. Members of the Police Officers Association were surprised by the move, and they weren’t the only ones. It seems Figone did not consult the City Council on her decision to pass on applying for the largest possible grant.

As city staff studies a number of proposals on how to fix San Jose’s budget crisis, one idea in particular is likely to have some local business owners up in arms. Councilmember Nancy Pyle submitted a memo at Tuesday’s council meeting that recommends modifying the business tax for establishments that offer services. These businesses are taxed by the number of employees they have rather than sales.

The city charter sets out some basic tenants for public employee retirement, and Mayor Chuck Reed is often touted as a stickler for adhering to the charter. The question many ask is: What exactly does the charter say?

Harry Mavrogenes made the surprising announcement Thursday that he will relinquish his role as Executive Director of the San Jose Redevelopment Agency as of June 24. Mavrogenes has held the title since late 2004.

Mayor Chuck Reed’s fiscal reforms, which would declare a fiscal emergency that allows the city charter to be changed in an effort to slash soaring public employee pension costs, will be discussed at Tuesday’s City Council meeting. While it seems likely Reed will get the necessary votes to begin the process—he already has the support of Vice Mayor Madison Nguyen and councilmembers Rose Herrera and Sam Liccardo—Councilmember Donald Rocha is suggesting the city stop, take a deep breath and consider the possible litigation that could ensue.

Mayor Chuck Reed sent a letter to Bud Selig last week, once again urging the Major League Baseball commissioner to come to a decision that would grant the Oakland A’s permission to relocate to San Jose. A few days later, the mayor announced that San Jose was in a fiscal and public safety emergency, and he wants the city to move toward putting measures on a November ballot to slash public-employee retirement benefits. The timing of the two actions could be coincidental. But then again, maybe not.

If you have an attorney in Silicon Valley, you’re probably paying more per minute than anywhere else in the country. According to U.S. Bureau of Labor Statistics (BLS) data for 2009,

The biggest story in the news Tuesday is word that action star and former California Governor Arnold Schwarzenegger had a child out of wedlock a decade ago. An interesting question is: What would California look like today if voters had known the truth about Schwarzenegger’s actions before he was elected governor in a 2003 recall election. Infidelity is generally a career-killer in politics, and Schwarzenegger had basically no experience before coming into office.

It’s a sad day at City Hall, as one of San Jose’s four falcon chicks born last month on a ledge on the 18th floor has died. Unita, the only female born to parents Clara and Esteban Colbert, fell while trying to retrieve food from its mother. The bird was not quite ready to fly.

Matthew Mahood, 45, has been named the next president and CEO of the San Jose Silicon Valley Chamber of Commerce. Coming over from the Sacramento Metro Chamber of Commerce, where he has held the lead role since 2002, Mahood will be replacing Pat Dando.

In its first month of collecting taxes on medical marijuana being sold inside city limits, San Jose took in almost $290,000. And it appears more money is still on the table. Less than three-quarters (73) of San Jose’s 100-plus collectives paid the business tax in March, according to city figures.

Declaring a fiscal and public safety emergency, Mayor Chuck Reed unveiled his fiscal reform proposal Friday afternoon at City Hall. The reforms will focus on pension and health care for current and future employees, and some actions will require changes to the city charter, meaning measures will need to be put on a ballot for voter approval. The proposal being put forward was co-signed by Vice Mayor Madison Nguyen and councilmembers Sam Liccardo and Rose Herrera.

A 51-year-old San Jose man died from his stab wound injuries late Thursday night, bringing the total of homicide victims in San Jose this year to 21. That total is one more homicide than San Jose had in all of 2010.

A legal settlement has been reached in the federal lawsuit between the city and a San Jose State student whose violent encounter with police two years ago was captured on video. Rather than go to court, the city will reportedly settle with Phuong Ho—who said his civil rights were violated when police used a Taser as well as a baton to subdue him—for somewhere in the range of $90,000 to $225,000.