Pegram Pledge of Fiscal Responsibility

By Larry Pegram

I have made a commitment to ten principles that I will follow in order to help balance the City budget.

2. I will vote to make the pension contribution levels for employees and the city more equal (50-50). The current 8-3 split requiring the City to contribute 73% of regular retirement contributions is no longer acceptable.

3. I will vote to increase the retirement age of all employees. Public safety employees would not be eligible to receive retirement benefits before the age of 55 and non-public safety employees will not begin to receive a retirement benefits until age 62.

4. I will vote to reduce the full retirement benefit so it does not exceed 65% of the average of the last 5 years of pensionable compensation and require 10 years of service to be vested in the pension system.

5. I will vote to eliminate paying 100% of the cost of family health insurance for life.The City's contribution should be no more than 50% of the cost.

6. I will vote to put a cap on any increase in total personnel costs. That cap should be a rate that does not exceed the last 5 year average rate of increase in general fund revenues.

7. I will vote to eliminate automatic pay increases (step increases) for time in the job.Pay increases should be based on performance and/or promotion.

8. I will vote to ban retroactive raises.

9. I will vote to eliminate the practice of cashing out unlimited amounts of sick leave. Sick leave cash outs should not exceed 50% of the unused time.

10. I will vote to eliminate policies that restrict the City's ability to deliver services in the most cost effective manner.

Principles of Fiscal Responsibility

The City of San Jose has faced budget deficits for the last 9 years. These past deficits have required $400 million in reductions in spending to achieve the legally required balanced budgets. San Jose is facing an additional $40 million shortfall of revenue to expenses next fiscal year.

These reductions in spending or "cuts" have resulted in major reductions in library hours, the closing or reductions in community center operations and programs, and leaner public safety services, youth programs, senior services, and road maintenance and repairs.

The City must change the way it does business. It must change the way it compensates its employees to fix the City's structural budget deficit. The changes needed are both for the short term and the long term to ensure future generations are not faced with the financial mess we face today.

In order to restore services to the level the residents of San Jose expect and deserve, we must increase staffing across the board. My objective is to return library service to seven days per week, reopen neighborhood centers and facilities including the Kirk Community Center, reestablish robust youth and senior programs, restore police and fire service levels, and adequately repair and maintain our roadway and sewer infrastructure. To accomplish this in a fiscally responsible manner, we either raise taxes or negotiate concessions from our employees. For the City to restore service levels and remain fiscally responsible, we must reduce the current costs per employee and restrict future increases in employee total compensation.

I do not support raising taxes, especially as it becomes harder and harder for households to make ends meet.

We must adopt a new plan for retirement benefits for new employees. This new retirement system, known as a two-tier system, ensures the long term viability of the City's retirement plans. These changes, along with the other fiscal measures in this document, give the City the ability to raise services to desired levels.

If elected, my guiding principles to deal with our immediate budget problems will be:

• To negotiate with employees to make permanent reductions in their total compensation sufficient enough to end this chronic deficit we face. If negotiations do not produce the savings necessary to balance the budget and preserve neighborhood services, I am prepared to vote to impose terms that do reduce total compensation per employee.

• To go to the voters and rescind or amend public safety binding arbitration. We must have a system that encourages negotiations; not an almost automatic move to impasse. The system must restore the final decision making regarding salaries and benefits of police officers and firefighters to those individuals who are elected by the people of San Jose and are responsible to fund all aspects of City services. Under the current system, arbitrators are not required to take into consideration the fiscal realities faced by the City and, in many cases, have not.

• To continue to seek ways to find less expensive ways to provide our current level of services.