San Jose has decided to put off implementing a controversial pension reform measure until next year.
Provisions from Measure B calls for city workers to contribute 16 percent more of their pay to retirement costs and would have taken effect on July 1. Measure B was approved by voters in 2012.
Superior Court Judge Patricia Lucas on Thursday signed an agreement reached by the city and its bargaining units to extend the employee compensation reduction portion of the measure for a year.
"Today's action extends the current agreement between the city and its bargaining units for another year, allowing more time for the legal process to come to resolution," Mayor Chuck Reed said in a statement.
Measure B also is being battled in court. The city's firefighters and police unions have blamed the measure for the mass exodus of employees over the last two years.
Under Thursday's deal, the city will put off for a year pay cuts of up to 16 percent, a decrease in disability benefits and the elimination of a cost-of-living increase for retirees.
Ed Shikada, San Jose's new city manager, is being credited with bringing the city and its workers together for a possible labor agreement outside of court.
"I think he's been instrumental," said Joel Phelan, who heads the San Jose firefighters union. "We're encouraged by the new city administration. We're having meaningful dialogue."
Shikada said the prospect of a 16 percent pay cut via Measure B is a "serious threat to the city's ability to retain employees and provide services to the community."
Last month, councilman Donald Rocha called on city leaders to take a second look at Measure B.
Rocha, who previously supported the initiative, is concerned on what Measure B would do to the city's struggling police department.
He said the changes have forced many officers to retire or simply move on to jurisdictions with stronger benefits packages.
The police union said the number of sworn officers at the department is now under 900.
There have been 27 officer resignations to date this year, with two more pending, the union said. Officers also said the lower staffing has led to low morale and a rise in crime.