San Jose is set to faceoff against its financial issues, as the city began discussing possible solutions at Tuesday’s City Council meeting.

City staff brought forward to City Council in open session a summary of labor negotiations for the upcoming year. The process provides an opportunity for the public to become informed on the labor negotiations before the city commences negotiations and provide the council’s input before the negotiations begin.

According to the city staff report, San Jose is entering its ninth year of General Fund shortfalls. In order to achieve a balanced budget for Fiscal Year 2009-2010, the Mayor and City Council were faced with closing an $84.2 million General Fund deficit. 

In addition, many of the city’s special funds were also impacted by this economic crisis and had significant shortfalls to rectify.

Director of Employee Relations Alex Gurza said the meeting was due to the Public Information provisions of the Sunshine Reform Task Force Phase 1 Report approved in 2007.

Gurza claimed before this provision, negotiations were completed before the reports were available to the public.

“This gives the public an opportunity to speak to pay and benefits,” Gurza said.

One way Gurza said the city can cut the budget is by “cutting employees and services.”

San Jose is taking the approach of reducing how much each employee costs as a whole.

This could mean reduced salary, reduced health benefits and reduced workers compensation, increased taxes and possibly reducing employees.

“The more personnel costs there are can dictate how many [employees] you can afford,” Gurza said.

According to the report, “If the current projected $91.5 million deficit for Fiscal Year
2010-2011 was solved through position eliminations; this would require the elimination of approximately 763 positions Citywide. However, if there were no impact to sworn positions, this would result in the elimination of approximately 905 nonsworn positions citywide.”

The goal of Tuesday’s open discussions was to earn input from the city.

“The Mayor and City Council understands they have difficult decisions to make,” Gurza said.

Louis Dettorre can be reached at