Over 100 Chamber members attended Access City Hall on September 25th. The main theme of the day was the city’s on-going structural budget deficit. The program opened with San Jose City Manager Debra Figone providing an overview of the city’s fiscal challenges and outline of the city’s deepening structural deficit. She pointed to no one easy answer to resolve the debt that has plagued the city since 2002. According to Figone, the city is facing a projected $200 million deficit over the next five years.

City administrators and city council members discussed layoffs, budget cuts, service reductions, imminent tax increases, and the future of this city that has struggled with a deficit for the past 7 years.

Following the City Manager Redevelopment Executive Director Harry Mavrogenes provided an overview of the Redevelopment Agency’s budget. The Agency, being San Jose’s economic development tool and affordable housing’s funding source is showing signs of severe distress. In September the RDA laid off 25% of its staff following a $75 million dollar “take” by the state of California. Additionally, the Agency diverts approximately $21 million annually to Santa Clara County as agreed to in prior negotiated settlement agreements and funds a level of neighborhood services in the City’s redevelopment neighborhood districts.

During one of the question and answer periods the subject of Pension Reform was raised. Business members questioned the city’s current generous benefit packages for city employees acknowledging the fact that most all private sector employees no longer have the option of a defined benefit retirement system. City administrators and several council members acknowledged that the city’s current pension benefit system is no longer a sustainable fiscal model for the city. A 2-tier retirement system for future city employees hired after a specific date received strong endorsement by members of the business community in attendance.

In the first panel discussion Council members Kansen Chu, Ash Kalra, Nora Campos and Pierluigi Oliverio spoke on the building and code enforcement processes, the economic development needs in their districts and a possible two-tier pension system for city employees. Additionally Councilman Chu provided a snapshot of the North San Jose planning effort, Councilman Kalra centered on the technological needs in his district while Councilwoman Nora Campos highlighted public safety. Councilman Pierluigi Oliverio focused on the hard financial decisions that he feels have to be made returning once again to the economic development needs within the community.

On several occasions Chamber CEO & President Pat Dando acknowledged that the city as well as the private sector is struggling in the current economy. Just as the private sector has had to make very difficult decisions the city will need to be making difficult choices and decisions over the coming budget year. She emphasized that the business community will need to support the city and policy makers as they make these challenging decisions during the coming year’s budgetary and labor negotiation processes.

For more information about Access City Hall, please contact Pat Sausedo, Vice President of Public Policy & Communications, at pats@sjchamber.com, 408-291-5262.