San Jose's pending deal with the firefighters union to slash pay and benefits to help close a huge budget gap marks the most dramatic thaw in labor relations since Mayor Chuck Reed took office in 2007 railing about runaway employee costs.
The firefighters union, under new leadership after years of battles with the city, was the first to reach a tentative deal, which the City Council is expected to approve Tuesday. But more than half of San Jose's other employee unions have already proposed extending temporary pay cuts they grudgingly accepted in June, and city officials are evaluating their offers.
City and labor leaders are hopeful more deals will quickly follow now that a public safety union that balked at big cuts a year ago has shown it will make the same sacrifices asked of everyone else, even as the city acknowledges that the concessions might not stop layoffs.
"It's such a positive move for the city," Budget Director Jennifer Maguire said. "Hopefully, this will change the tone."
Shared pain
Nancy Ostrowski, who heads a coalition of five city unions representing about 750 employees that last month offered 10 percent cuts and pension changes, said employees feel strongly that sacrifices should be shared equally across departments. Last year, the city accepted smaller cuts from the police union and couldn't reach a deal with firefighters.
"It's about fair and equal treatment; everybody shares the pain," Ostrowski said. "Fire has totally stepped up to that."
Reed and other city leaders may have better success securing employee concessions this year, but another year of mass layoffs is almost certain.
The problem is simple mathematics.
San Jose expects costs to exceed revenues in the next budget cycle by $105.4 million. And even if all 11 city unions agree to the requested 10 percent cuts, the savings is less than half of that -- about $38 million. About 480 jobs would have to be axed to cover the balance.
"Concessions by themselves aren't enough," said Employee Relations Director Alex Gurza, the city's chief labor negotiator. Job "reductions will still be necessary to balance the budget."
Last year, the council imposed 5 percent cuts on a building inspectors union, which is now among those offering to cut employee compensation 10 percent. Six other unions last year reached last-minute deals to take 10 percent cuts, and all six have offered to extend them. Police agreed to a 4 percent reduction, just enough to save officers from layoffs, while 49 firefighters lost jobs after talks failed. Two other unions still under contract continued receiving raises.
All told, nearly 200 city workers ended up unemployed.
This year, some 700 jobs are on the line as San Jose confronts a 10th straight deficit in the budget year that begins July 1. Union leaders said city workers recognize what they're up against and are sensitive to residents' outrage about services being cut to cover the soaring costs of city employees' pensions.
"My membership understands that there is a problem and we need to do something around the 10 percent," said Bill Pope, a business agent for the city's operating engineers union, which also has already offered reducing pensions for new hires.
Still, other unions are balking at offering concessions or are noncommital.
Yolanda Cruz, president of the city's largest union, the Municipal Employees' Federation, which represents employees from planners to librarians, said she needed to study the firefighters' deal before commenting.
Public safety layoffs
If police agree to the 10 percent cuts, it would save about 100 of their jobs, about a third of those that could be on the chopping block.
George Beattie, president of the San Jose Police Officers Association, said officers aren't necessarily opposed to some concessions, but are "still in the preliminary stages" of developing a proposal. But he said officers are incensed that even if they agree to the 10 percent cuts, their department will probably still have layoffs. The POA has launched a campaign criticizing the potential staff cuts -- a campaign that Beattie said is unrelated to concessions.
"Our guys and gals have been making concessions for three years now," Beattie said. "Even if we give the 10 percent, you still can't afford to cut police officers."
Maguire said the firefighters' concessions will save 65 of their jobs, but there is no estimate of how many of their budgeted 647 positions may have to be cut.
Firefighters are hopeful their new agreement will allow the city to accept a $15 million federal grant to maintain Fire Department staffing for the next two years. Acceptance would require no firefighter layoffs, which city officials say may be impossible, even with the 10 percent cuts.
Fire Chief Willie McDonald said the firefighters' concessions could make the grant possible, but a lot of details still have to be worked out.
The city's struggling airport is still considering outsourcing the jobs of 41 San Jose cops and a dozen firefighters to curb costs. And redevelopment woes threaten to further widen the deficit.
The reality that employees will be laid off even if they agree to the city's pay-cut demands weighs heavily on workers.
"Everybody knows that," said Pope, whose union includes park rangers, whose entire division may be eliminated. "They are frustrated. It's difficult to negotiate in this economic climate."
