UPDATE: San Jose officials sign off on higher union pay

San Jose Mayor Matt Mahan was the lone official to downvote a new contract for unionized city workers, after months of contentious discussions over how the city will afford pay raises for thousands of its employees.

The San Jose City Council today ratified labor contracts after coming to a deal with two of the city’s largest unions—IFPTE Local 21 and AFSCME Local 101—reached hours before the groups representing 4,500 workers were set to strike in August over wages and working conditions.

After intense back-and-forth on the dais, councilmembers eventually found ways to avoid major cuts to city services, including to its parks programs, by adopting a proposal by Councilmembers David Cohen, Pam Foley and Sergio Jimenez. One notable cut to cover the wage increase is eliminating about 10 vacant city positions.

“(These cuts) feel like the tip of the iceberg,” Mahan said. “It worries me that the community doesn’t understand the math of the tradeoff that we’re setting up here … I hope I’m wrong and we’re not in a position of having to reduce wages or lay people off in the future. We are gambling with resident services and worker’s security.”

The plan routes $10,000 from each district and $100,000 from the mayor’s budget back to the parks programs to maintain staff positions, but falls short of fully saving the crown jewel—Viva Calle. The program closes six miles of streets to traffic for residents to bike and enjoy activities, and will still likely be cut from three events per year to two. Staff would need to independently fundraise close to $350,000 to hold a third event.

Throughout the months of a heated bargaining process, Mahan was steadfast in his stance that the city can’t afford to cave to the unions’ demands. He continued that sentiment during today’s council meeting by casting the sole “no” vote against the union contracts, which gives 14.5% in raises over the next three years.

“What we’ve done is lock in the costs over the next three years without having confidence about the revenues,” Mahan said. “I think folks are in for a pretty rough ride over the next couple of years.”

Foley served as a trustee for San Jose Unified School District during the 2008 financial crisis, where she said she made difficult and painful decisions on slashing programs and laying off employees. She said the union deals are necessary, but acknowledged that tough times are ahead for the city.

“We’ve heard a little bit about Viva Calle and Viva Parks,” Foley said. “Trust me, my friends and colleagues, it’s not going to be anything like this in the next year, it will be much more difficult.”

Mahan held his own press conference before the council meeting, where he said the city faces significant economic uncertainty: Measure E revenues and sales tax are slowing down, and San Jose is seeing a 25% vacancy rate downtown, lower than Oakland and San Francisco but still “very high by historical standards.”

Mahan said he has no intention of demonizing city workers or labor unions, and that he has long spoken in support of “generous” raises for staff. But union members who spoke at council said they felt the mayor isn’t showing city workers the respect they deserve, including Cindy Harlin, president of AFCSME Local 101.

“Labor will now focus on the upcoming opening council seats, and will come full force in the next mayoral election,” Harlin said. “Labor will back and support a mayor who supports, appreciates and invests in our valuable city workers.”

Mahan said he tried offering the unions a deal that would trigger automatic pay raises based on city revenues, but to no end. He said 10% of the city’s general fund already goes to paying unfunded pension liabilities, and inking this deal with the unions, while it may look good for politicians now, it will add to the city’s debt.

“The truth is, in government, we often don’t face the right incentives to make the best decisions, and we kick the can down the road,” Mahan said. “There’s a reason our city has accrued over $3 billion in unfunded pension liabilities (and) about $1.7 billion in deferred maintenance on our infrastructure.”

Contact Ben at [email protected] or follow @B1rwin on Twitter.