SJ Mayor: 'The Well Is Dry' - NBC Bay Area

SJ Mayor: 'The Well Is Dry'



    SJ Mayor: 'The Well Is Dry'

    San Jose Mayor Chuck Reed and his administration must lead the Capital of Silicon Valley through a $110 million for the fiscal year that starts on July 1. Reed articulated the coming financial struggles in his State of the City address Thursday night.

    Critical to navigating through the red will be gaining concessions from city unions, residents and city council -- and a serious retooling of the city's pension obligations and compensation.

    "The people of San Jose recognize that cutting services to pay for cost increases is a formula for disaster," Reed said. "With the overwhelming approval of Measures V and W last November, the voters have given us a mandate to get control of runaway costs."

    Pensions and retiree healthcare benefits account for $3 billion short of the funds needed to pay for commitments, according to the city's release.

    "In the past 10 years, our annual retirement costs increased by more than $90 million. In the next five years, they will increase by another $250 million to $400 million per year," Reed said.

    The city dropped 800 jobs, demoted or laid off another 150 people -- and that included 49 firefighters.

    Bottom line? "There is no more money. The well is dry."