City Modifies Proposed Retirement Reform Ballot Measure

Last week, the City's negotiating team provided its employee unions with revised ballot measure language that modified elements of the City's proposed retirement reforms. Most notably, the new ballot measure language would offer current employees a choice to either:

• "opt-in" to lower cost benefits (subject to IRS approval), or
• make additional contributions to help pay for the pension funds' unfunded liabilities.

"The City cannot afford to pay the ever-increasing costs of retirement benefits," Mayor Reed said. "Since our unions have told us they will not agree to changing benefits for current employees, the new opt-in plan offers each individual employee a choice: keep current benefits as they are and pay more, or take modestly reduced benefits and pay less." 

The changes were based in part on feedback offered during the course of negotiations and in an effort to reach an agreement on potential ballot measure language.

Learn more about the proposed retirement reforms.

Mayor Reed Discusses Pension Problems at Stanford Panel

On August 22, Mayor Reed participated in a special community meeting put on by the Stanford Institute for Economic Policy Research (SIEPR) addressing California's public pension systems, with a special emphasis on the City of San Jose's two retirement systems. Watch a video recording of the event and view SIEPR's presentation slides

In particular, SIEPR's research demonstrated how overly optimistic investment return assumptions can mask the true magnitude of our pension crisis. When factoring in a more realistic 6.2% investment return assumption, which mirrors historical averages, San Jose's two retirement plans are only 45% and 53% funded (based on market value). This represents a much larger $3.8 billion unfunded liability, translating into approximately $12,500 per household.

Underscoring the impact of market volatility, researchers also ran thousands of simulations which showed that the City's retirement plans have an 87% likelihood of falling short of its obligations, even if they average an optimistic 7.75% annual return over the long term.

SIEPR's final report is expected to be published by the end of the year.

Learn more about the city's pension problems.

22 SJ Firefighters Return to Service Thanks to Federal Grant

Mayor Reed was joined by numerous federal, state, and local leaders on August 25 to celebrate the return of 22 firefighters to the line, thanks to a $15 million federal Staffing for Adequate Fire and Emergency Response (SAFER) grant. This first group of firefighters, who were laid off during last year's budget cuts, had completed a six-week refresher training over the summer and are now back on active duty. Read the press release

"In these trying budget times, I am extremely pleased to welcome these 22 firefighters back to our department and our community," Mayor Reed said. "I'd like to thank the many different people who joined together to help us receive and accept this grant award."

In total, the SAFER grant will allow the City to restore 49 firefighter positions for the next two years. The Fire Department will be recruiting for and filling the remaining firefighter positions in the coming months.

View pictures from the event

Mayor Reed Welcomes SolFocus to San Jose

On August 12, Mayor Reed and other local leaders joined SolFocus to unveil its new headquarters in North San Jose. The solar company recently moved into a 44,000 sq. ft. LEED Silver certified facility in North San Jose, and is installing its own solar array systems on site to help power the facility. SolFocus' relocation brings approximately 90 clean tech jobs to San Jose and the company is currently hiring additional workers.

SolFocus is a leading supplier of high-efficiency and high-performance Concentrator Photovoltaic (CPV) systems, which provide the lowest levelized cost of energy (LCOE) in high sun regions.

Watch a video testimonial from CEO Mark Crowley discussing why his company chose San Jose. You can also view a video from their inauguration event.

View a video testimonial by SolFocus CEO Mark Crowley and other local business leaders about the benefits of doing business in San Jose.

Learn more