SAN JOSE — After more than three years of bitter fighting, city and public safety union leaders Wednesday reached a tentative deal that would end litigation over the Measure B pension reforms voters overwhelmingly approved in 2012.
The proposed deal came after round-the-clock talks during the City Council’s summer break on the day union leaders had threatened to walk out if they couldn’t reach a settlement.
“Today’s agreement will be a catalyst for the rebuilding of our public safety services, to restore San Jose’s police and fire departments,” said Mayor Sam Liccardo, who’d championed the pension reforms as a councilman and candidate. “It’s also a moment to celebrate our collective commitment to move forward beyond the contentiousness of the past.”
Paul Kelly, president of the San Jose Police Officers’ Association, called it “a historic day for San Jose.”
“When two sides work cooperatively and collectively,” Kelly said, “a positive outcome can be had.”
While the agreement Wednesday only covers retirement benefits for police and firefighters, Vice Mayor Rose Herrera said it would pave the way for settlements with other unions that also are suing the city.
“The other groups will look at this as a template,” Herrera said.
The police and fire unions expect members to ratify the settlement in the next few days. The deal will then go to the City Council in early August for final approval.
The pension reform measure fueled a heated court battle between the city and its unions, especially the public safety groups who blame the 2012 initiative for chasing away droves of San Jose police officers.
But the city viewed Measure B as a way to control skyrocketing retirement costs that had more than tripled after benefit increases in the late 1990s and devoured funds for services. The measure called for current employees to pay more into their pensions, eliminated bonus checks for retirees, established scaled-back benefits for new workers and stricter disability provisions.
The proposed settlement would roughly maintain most parts of the measure already enacted, such as eliminating bonus checks for retirees and scaled-back pensions for new hires while abandoning provisions blocked by a trial judge’s 2013 ruling or which the council had not enacted, such as higher pension contributions from workers and some disability changes.
“The message was being sent to new officers that they wouldn’t be protected if they become disabled,” Herrera said. “But if somebody gets injured on the job, they shouldn’t have to fight for disability and I didn’t want us to be different than other agencies.”
Measure B became the signature fiscal reform initiative of former Mayor Chuck Reed, but he called the settlement “good news.”
“It’s a good move to lock in savings because litigation is uncertain and you never know if you’re going to be able to hold on to all your winnings,” said Reed, who had backed successor Liccardo and is pushing for pension reform on a statewide level by introducing a new measure earlier this year.
Councilman Ash Kalra, who had criticized the pension measure, called the settlement “bittersweet vindication.”
“Today, we begin to close a very dark chapter in San Jose and start to rebuild our city,” Kalra said on Twitter.
In a news conference late Wednesday, Liccardo said the technical details about how the city will replace Measure B charter changes with the settlement are still being worked out, and it’s unclear if voters would have to approve.
Nearly 70 percent of city voters approved the June 2012 measure over objections of city unions that called it an illegal assault on their employees’ promised benefit rights that would spawn an exodus of city workers.
The police department has seen its ranks dwindle from a historic peak of 1,400 officers in 2009 to about 960 today, marking the first time in three decades that number was below 1,000. By contrast, San Francisco, a city with 15 percent fewer people than San Jose, is served by over 2,100 officers.
After Measure B was passed in 2012, the city was slapped with numerous lawsuits from its employee unions and retirement associations. The city and unions have collectively spent millions litigating Measure B in court before coming to the table four months ago to discuss settlement options. Liccardo said the city will repay some of the unions’ attorney fees as part of the settlement.
Less than a year ago, the two bitterly torn sides could hardly be in the same room to discuss a settlement. But new blood at the city’s administration — a new city manager, employee relations director and mayor — along with fresh leadership at the San Jose Police Officers’ Association, seemed to turn the tide.
“A number of people believed the problems between Mayor Reed and the public bargaining units were so poisoned that nothing could happen until there was a new administration,” said Larry Gerston, a political science professor emeritus at San Jose State University.
Follow Ramona Giwargis at Twitter.com/ramonagiwargis or contact her at 408-920-5705.
PROPOSED PENSION SETTLEMENT
