Most of Mayor Chuck Reed’s State of the City Address, delivered at the Civic Center this evening, dealt—in sometimes painful detail—with the budget mess that the mayor has been forced to deal with since he took office.

He began by defending the city’s Redevelopment Agency, which, like RDA’s throughout the state, is under attack from Sacramento.

Last Thursday, the council had a study session for San Jose’s 2010-2011 budget. The public meeting received little media attention. Perhaps, since the holidays are near, we only want to hear the good news…and next years budget is far from good. There is no dispute on the data—just the direction we shall choose to balance the budget. 

Every now and again the Mercury News editorial board hits a home run. Shortly after the election, the Merc issued a strong and thorough editorial about the city’s problems as they relate to city employees and their unions. “It’s time for San Jose city employees and union leaders to drop the ‘scapegoat’ label. It’s wearing thin, and nobody outside of union circles is buying it.”

By Greg Larson

It appears that Democrats won all nine statewide races and retain significant majorities in the California legislative and congressional delegations. But as evidenced below, the statewide ballot measures paint a completely different picture, one that suggests the Democratic Party itself is increasingly out of touch with the policy preferences of the California electorate.

At first glance, modifying binding arbitration back in July was not my first choice over new pensions for new employees. I support the Mayor on fiscal issues, so voting in favor of Measure V and giving residents the opportunity to support this measure is consistent with my line of thinking.

In a nutshell, Measure V would put limits on outside arbitrators. During the course of the campaign I have become more and more supportive of this measure.  There are two primary reasons why it is important, neither of which are getting much publicity. One, the passage of Measure V will mandate that binding arbitration for public safety unions would be held as public meetings.

Everyone’s talking pensions and benefits these days.  It’s the elephant in the room that can no longer be avoided.  Even the Mercury News Editorial Board has found religion on the subject, endorsing the passage of Measures V and W.  “As to pensions, there’s a recognition across the nation that the level of public sector pensions is not sustainable…spiraling towards bankruptcy serves no one.”

At a City Council meeting yesterday, Bob Brownstein of Working Partnerships blasted an audit that found the city’s pension benefits program unsustainable, saying it was, “filled with flaws and inaccuracies.”  It was a testy exchange, and at one point, City Councilmember Pete Constant, who chaired the meeting, threatened to have Brownstein removed from the meeting.

The unionized education hourglass has a few minutes of sand left before its upper glass chamber loses its last speck. Race to the Top and the Charter School movement have quickened the pace of the draining granules of sand. Unions can flip the hourglass to gain some time for dialogue, but only if they heed some advice.

It feels like madness. China continues to fund our debt, launches major initiatives to improve their future—particularly in green technologies—and their education system is outsmarting us. Concurrently, with the rising drop-out rate and decreasing graduation rate of our 18 year olds, we are spending trillions of U.S. tax dollars nation-building in Iraq and Afghanistan. In 1970 the U.S. produced 30 percent of the world’s college graduates…today only 15 percent. This is madness. We need nation building here beginning with public education now.

“It’s Not Fair To Make Public Unions The Scapegoats…Unions Are Not Devils,” writes Evan Low, mayor of the City of Campbell, in a recent opinion piece published by the Mercury News. “In these tough economic times, we cannot stereotype or demonize one another or strictly adhere to political ideologies. We need to look at what’s fair and what’s right considering the limited resources we have…”

Team San Jose, the peculiar alliance of hoteliers, unions and city bureaucrats that runs the city’s entertainment and convention venues, is facing the biggest crisis in its short, contentious history.

Last Wednesday, finance chief Scott P. Johnson issued a report showing that the quasi-public entity overshot its budget by $750,000, and tangled its bookkeeping so badly that director Dan Fenton can’t even say exactly where the missing money went. Then on Monday, City Councilmember Sam Liccardo turned up the heat, asking city manager Deb Figone to dig into the hotel-tax-funded entity, which is run by Fenton and an executive committee including South Bay Labor Council boss Cindy Chavez.

As most of you are most likely aware from the front page article in the San Jose Mercury News on August 12, The San Jose Municipal Rose Garden was selected as America’s Best Rose Garden. What an incredible achievement! Congratulations and thanks to all involved including the paid park maintenance city staff and the non paid volunteers.

The rebirth of the Rose Garden could not have been done by only park maintenance staff or only by volunteers. It is the combination of both that allows for this fantastic achievement. And the leadership of Beverly Rose Hopper and Terry Reilly.

The Rules Committee allowed my memo on Pension Reform to go before the City Council Tuesday, Aug. 3, to be considered as a ballot measure for San Jose voters this November. At the Rules Committee meeting, members of the public were few compared to the number of paid lobbyists that were in the audience. 

My memo below will be discussed, next Wednesday, July 28 at 2pm at the Rules Committee which includes Mayor Reed, Vice-Mayor Judy Chirco, Councilmember Nancy Pyle and Councilmember Pete Constant. This is a public meeting.

Recommendation
Direct City Attorney to prepare legally binding ballot language for a ballot measure to be considered at the August 3, 2010 Council meeting for the November 2010 election allowing residents of San Jose to vote on changing the City charter by removing charter language regarding “minimum benefit” and “contributions/ cost sharing” in regards to pensions (Sections 1504 and 1505). Removing this language would allow the flexibility to negotiate a 2nd Tier pension for new employees whose hiring date is after January 1, 2011. This proposal would not change current legally vested benefits for existing employees. 

Hope your Fourth of July holiday was fantastic. On June 29, prior to the holiday the Council made the final vote for a balanced budget. More than 20 people spoke at the Council meeting and all but one advocated that the Council not outsource janitorial services but rather keep the janitorial staff employed, since they provide an incredibly valuable service. You would have thought janitorial was listed in the city charter by the speakers’ comments.

Lately, San Jose’s political rhetoric has been hotter than its weather. Here are a few samples of comments by San Jose residents that were published by the Mercury News in recent days:

“With the resulting layoffs of 230 police and fire personnel looming, their (the unions’) motto needs to be revisited. Perhaps it should be modified to read, ‘To protect and preserve union power at the expense of public safety.’”

“Public and private workers increasingly live in separate economies…public employee unions have had a stranglehold on state and local elected officials for decades.  This has to end, as the taxpayers are fed up and tapped out.”