Council Redistricting Advisory Commission

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Pursuant to the City Charter section 403, the Council shall appoint an Advisory Commission whose purpose shall be to study and make appropriate recommendations with respect to such redistricting. This Advisory Commission shall consist of one (1) member from each District, who shall be appointed by the Council member from that District, and a Chairperson chosen from the City at large, who shall be appointed by the Mayor. The membership of the Commission shall be representative of the ethnic make-up of the City at large, to the extent practicable.

The Advisory Commission shall conduct at least three public hearings, at various locations in the City, concerning its recommendations regarding District boundaries, and shall submit its report and recommendations to the Council within one hundred twenty (120) days following its appointment.

The Council shall duly consider the report and recommendations of the Advisory Commission and in adopting any redistricting ordinance. However, the Council is required to adopt an ordinance within the period of time required under this Section even if the Advisory Commission fails to provide recommendations or reports as specified in this Section.

Except as provided herein above, such Districts shall be used for all elections of members of the Council, including their recall, and for filling any vacancy in the office of member of the Council, subsequent to the effective date of such ordinance and until new Districts are established. Any territory which is annexed to or consolidated with the City but not included within a District shall, prior to or concurrently with completion of the proceedings therefore, be added to an adjacent District or Districts by the Council by ordinance, which shall become effective at the expiration of thirty (30) days after adoption and shall apply to all elections held on and after its effective date.

Any ordinance adopted by the Council and establishing, changing, or altering the boundaries of any District shall describe the new boundaries by reference to a map on file in the office of the City Clerk and/or by a metes-and-bounds description.

In any redistricting, the Council shall make the Districts as nearly equal in population as may be practicable, and may, in establishing the boundaries of the Districts, give consideration to (a) natural boundaries, street lines and/or City boundaries; (b) geography; (c) cohesiveness, contiguity, integrity and compactness of territory; and (d) community of interests within each District.
Upon any redistricting pursuant to the provisions of this Charter, each incumbent member of the Council will continue, during the remainder of the member’s term, to hold office and to represent the District by which the member was elected prior to such redistricting, notwithstanding any provision of Section 404 requiring a member to be a resident of the District represented by such member.

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FAQs

How will the settlement agreement save taxpayers money?
As outlined in the staff report, the settled agreement saves taxpayers over $1.7 billion over the next 30 years, primarily in four ways:
- reducing the pensions for future hires and for employees hired since July 2012, relative to pre-Measure B pensions ($1.15 billion savings over 30 years).
- closing the retiree healthcare plan, ensuring that taxpayers will not contribute to the retiree medical plans of future hires ($244 million savings over 35 years)
- eliminating the “bonus check” that retirees received when market returns exceeded expectations ($270 million savings over 30 years)
- constraining costs of disability programs by implementing an independent board of medical experts to make disability determinations, and by offsetting disability with prior workers’ compensation payments.
For calculations of those savings, see the actuary’s letters in the Council report (Attachment B, pages 31-40).

Most of the savings come from reducing the pension benefit offered to employees prior to the passage of Measure B. Since Measure B’s passage in 2012, new employees have seen a much lower pension benefit. The settlement strikes a balance between two extremes, but will solidify the savings from the elimination of the SRBR through Measure B while achieving significant long-term savings through revisions to the retiree healthcare plans and Tier 2 pension.

Importantly, the agreement ensures that we can offer benefits that are competitive with other California cities’ police and fire departments. The standard benefit in California, known as “PEPRA,” provides police officers and firefighters with a benefit that pays 2.7% of total final salary for every year worked for that agency. The City’s benefit mirrors the PEPRA formula, but costs taxpayers less money in two key ways: by setting an 80% cap on the total pension and by back-loading the 2.7% accrual rate in the latter years of the employee’s service. This way, San Jose taxpayers can save money while long-serving police and firefighters receive a benefit competitive with that of other cities.

A full description of the benefits of this settlement agreement can be viewed in this op-ed authored by Mayor Sam Liccardo and Former Mayor Chuck Reed.
How are taxpayers assured that we won’t go back to the days of unsustainable pension and retirement benefits that will bankrupt the City?

The City of San Jose currently faces over $3 billion of unfunded liabilities in its retirement accounts. Those burdens are split roughly equally between our retiree healthcare debt and our unfunded pension obligations. Let’s discuss each in turn:

Retiree medical liabilities: This agreement sharply reduces the likelihood of saddling future generations with additional unfunded debt by halting any future commitment of defined retiree medical benefits. That is, the agreement “closes the plan,” meaning that it forecloses the creation of new liabilities by ensuring that new employees will not enter the plan. Instead, new employees will pay 4% of their pay into a tax-favored defined-contribution account. That account, similar to an IRA, will accrue with investment savings to pay for retiree healthcare in their retirement, until the employee qualifies for Medicare at 65. The City and its taxpayers will have no obligation to contribute to that benefit. Current employees can dramatically reduce their costs by opting into that same defined-contribution account, but still take their past contributions with them into the account. By making that choice, employees waive the City’s obligation to pay.

Pensions: The agreement also reduces the risk and magnitude of long-term liabilities in a couple of ways. First, the deal prohibits retroactive enhancement of benefits. Second, it commits both police and firefighter union support a Charter measure that will require voter approval for any future increases in pension benefits and that the pension plan be actuarially sound. Third, it requires that future liabilities that are “unfunded” (i.e., not covered by City and employee contributions) be split 50/50 between employees and the City, creating a disincentive for irresponsible behavior as seen in the past.
How will the settlement agreement and wage agreement help to retain police officers on the force?

Many police officers left San Jose for better pay and benefits in other Bay Area cities. Chief among the articulated concerns were the disability protections that officers perceived as inadequate since Measure B. That is, a more narrow definition of “disability” that prevailed in San Jose since Measure B would have allowed fewer officers and firefighters to avail themselves of disability payments.

By restoring the language from the pre-Measure B law, the settlement agreement’s disability benefits will assure public safety officers financial security without breaking the bank. At the same time, the agreement will protect taxpayers from abuse by creating an independent panel of medical experts to evaluate whether an employee’s injury suffices in severity to qualifies for disability benefits, and by limiting double-payments for workers’ compensation.

Salaries also constitute a key focus of concern for many departing officers. Prior to this agreement, the median take-home pay of comparably-sized Bay Area police departments exceeded San Jose’s by about 14%.

With an 8% pay increase, our current officers will take a significant step toward pay parity. Half of that pay increase is given in a “non-pensionable” form, meaning that it is not used for calculating the employee’s retirement benefits. That detail is important because it saves the City about $3.6 million and enables officers to keep more of their take-home-pay in their pockets. Finally, the deal also calls for a one-time 5% retention bonus, which contains a “clawback” provision if any recipient leaves before the expiration of the contract.

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