San Jose Mayor Chuck Reed has delayed seeking the City Council’s approval to declare a fiscal emergency and for a fall ballot measure for fiscal and pension reform.
Reed said he is delaying both of the actions until at least August, according to the San Jose Mercury News.
The delay came after police and fire unions agreed to a framework for negotiations on retirement reform, the newspaper said.
At the end of May, Reed called on the council to declare a fiscal emergency in an effort to reduce pension and retiree health benefits.
The city’s annual retirement costs have quadrupled to $250 million in 2011 from $63 million in 2000. By 2016, the costs are expected to reach $400 million, according to the mayor.
Reed said his proposal builds on an earlier plan by the city manager that would potentially save $216 million from retirement reforms.
Reed had proposed capping the city’s contribution to retirement benefits for new employees at 9% of base salary and 50% of the total. He also wanted to raise the retirement age to 60 for public safety personnel and 65 for other employees, and raise eligibility for retiree health care benefits.
The mayor’s proposal did not target benefits that current employees and retirees have already earned and accrued.
The plan also put in place a temporary limit on employee benefits until essential city services are restored to first-of-the-year levels or the retirement plans have new unfunded liabilities.
