Voters may rule on S.J. pension deal.

S.J. leaders pressured into submitting Measure B replacement to voters

“I’m happy voters will finally have the opportunity to weigh in. … It’s unfortunate it had to take a lawsuit to show the city the proper way to do this.” — Former San Jose City Councilman Pete Constant, a Measure B supporter

SAN JOSE — Hoping to head off more court battles over pensions, Mayor Sam Liccardo now plans to seek voter approval for the entire settlement his administration secured with city unions to settle their lawsuits over the 2012 Measure B retirement overhaul.

After reaching the pension accord with the city’s 11 unions last summer, San Jose officials asked a court to nullify Measure B, and planned only to seek voter approval in November for charter provisions that required it.

But a former councilman and taxpayer group that supported the measure sued, arguing only the voters, who approved Measure B by nearly 70 percent in June 2012, had the authority to replace it with a settlement. A judge earlier this year refused to throw out the lawsuit.

“We know this would drag out over several years, and right now the residents of the city critically need closure so that we could restore public safety,” Liccardo said Tuesday.

The City Council will finalize the ballot language to replace Measure B at its Aug. 2 meeting. The fight over what goes in front of voters has dominated closed-door discussions over the past month.

Measure B reduced pension benefits for new hires, required existing workers to pay more for their retirement and eliminated a costly retiree perk. But unions filed numerous lawsuits, saying the measure was an assault on their “vested rights,” and blamed it for chasing away hundreds of police officers and other city employees.

City leaders last summer negotiated an agreement with unions outside of court that they said would maintain the equivalent of Measure B’s savings from parts of the measure that survived a trial court ruling. While both sides threatened appeals, the city began hemorrhaging police officers and other highly-trained personnel, many citing the retirement battles as a factor. The settlement provides a more favorable pension formula to new hires and increases cost-of-living pay raises — all without touching current employees’ retirement

plans. The two sides agreed to ask a judge to nullify Measure B and then replace it with the proposed settlement.

But former Councilman Pete Constant, along with businessman Charles Munger Jr. and the Silicon Valley Taxpayers Association, filed legal papers to stop the city from repealing Measure B.

“I’m happy voters will finally have the opportunity to weigh in on this ballot measure. It’s unfortunate it had to take a lawsuit to show the city the proper way to do this,” Constant said. “Now residents will be able to see the actual numbers and decide if the increased costs are something the city can handle with the budget that they have.”

City leaders originally planned to put three provisions in front of voters, promising no retroactive pension increases or future enhancements without voter approval.

Constant said that wasn’t good enough and pressed to have the whole settlement go to voters. Liccardo at the time didn’t agree, saying that was not necessary.

Constant confirmed he’ll drop the lawsuit once the city puts the entire ballot language before voters, regardless of whether it passes. “If this does get put on the ballot, the legal case will be moot,” Constant said, adding that his lawsuit forced the city and mayor to do “the right thing.”

Despite saying the settlement will cost taxpayers more in the long run, Constant hasn’t decided if he’ll campaign against it and will wait to see final ballot arguments first.

In its announcement Tuesday, the mayor’s office did not specify its plan to put the entire settlement before voters. Spokesman David Low said that was to keep things simple.

Meanwhile, unions leaders applauded the decision, hailing it as a final step in ending the Measure B saga.

“Pete Constant has done enough damage to the safety of San Jose neighborhoods by impeding our ability to implement lawful pension cost savings that will help rebuild our depleted police department,” said San Jose Police Officers’ Association spokesman Tom Saggau.

The council has until Aug. 12 to finalize the ballot language and will also decide who will write arguments for and against the measure.