More than 100 of San Jose city workers spent their last day on the job Friday as layoffs approved to help close a $115 million budget deficit took effect.

Some 264 city workers were either laid off Friday or are expected to be laid off over the next week. Among them: 100 police officers whose last day on patrol will be July 1. Friday's layoffs at City Hall came as San Jose's elected leaders debated proposals to curb runaway pension costs that have helped drive a decade of budget deficits.

"I hate doing layoffs," Mayor Chuck Reed said. "Today is the last day of employment for hundreds of really good people. This is all driven by skyrocketing retirement costs, and it's not over. It's a real problem."

The layoffs come despite 10-percent pay cuts agreed to or imposed upon all city workers, including elected officials and executive managers, which saved $39 million.

The city cut a total of 528 filled positions, all but 52 of them full time. But due to seniority rules governing layoffs, many of those employees transferred into other similar or lower positions, "bumping" less senior colleagues out of that job and perhaps into others. City officials said 87 employees were demoted to lower-paid jobs.

Among them was Blynthia Williams, who supervises the handling of some 2,500 public calls a day about various city services. The 22-year employee said her $69,000 salary will drop 25 percent. She has been forced to take a pay cut and a lower position even as job cuts elsewhere are expected to increase the workload in her center to 3,000 daily calls. To save money, she's reducing her cable TV subscription and cutting down on road trips. Like many city workers, she blames Reed for her plight.


"The mayor doesn't have a heart," Williams, a 48-year-old single mother of three, said. "A lot of us are getting the double-whammy. But I still have a job."

After a four-hour meeting, the council narrowly voted 6-5 to advance a new pension reform proposal from Reed and four other council members that would allow the city to negotiate an optional reduced pension for current employees. The idea is based on offers from police, firefighters and other unions, but includes incentives to encourage employees to take the less generous pension, which could make them pay more for the existing plan.

Council members Ash Kalra, Xavier Campos, Kansen Chu, Don Rocha and Nancy Pyle were opposed, citing concerns that it would discourage a deal with unions.

The council also called for polling on a variety of possible tax hikes as the city faces an 11th straight deficit next year, a shortfall of at least $78 million. Proposals include a quarter-cent sales tax, raising the city business tax and perhaps a special tax dedicated to public safety services. Voters in the last five years already have approved tax increases on phones, card rooms and medical marijuana.