San Jose Mayor Chuck Reed, who planned to seek the City Council's blessing Friday to declare a fiscal emergency and agree on language for a fall ballot measure aimed at fiscal and pension reforms, announced Monday that he is delaying action on both until at least early August.

He also said he will hold off on a ballot election until at least March 2012.

The mayor's decision came after the city's police and firefighter unions on Monday agreed to a framework for negotiations through Oct. 31 on retirement reform and related ballot measures.

Three other unions, representing the city's architects and engineers, midlevel managers and maintenance supervisors, had agreed to similar conditions on Friday.

In an effort to prevent balancing future budgets with more layoffs and cuts to city services -- which he blames on rising pension costs -- Reed in May unofficially declared what is believed to be the city's first fiscal state of emergency and said he would take his case to the voters in November.

The move underscored the two-term mayor's growing frustration with the resistance of some unions to pension changes for current and future employees. Reed wants to raise retirement ages and slash benefits.

Reed on Monday dismissed any notion that he was backing down under pressure from the unions, six more of which he hopes will make similar pledges to negotiate in good faith on those issues by the fall deadline.

"I have a lot of concern about the timing of all of this,'' Reed said. "But it's important to get people to sign on to the ground rules on the timing so we can take action before the next budget cycle."


Reed noted that he now has until early December to place a measure on the March ballot. A November election would have required the City Council to prepare a ballot measure by early August.

Ben Field, the South Bay Labor Council's chief of staff, offered Reed a backhanded compliment for his change of heart.

"It's good that Mayor Reed is having second thoughts about whether there is a state of emergency and whether to undermine the right of collective bargaining,'' Field wrote in an email. "Resolving labor issues at the bargaining table holds the most promise for saving city services with the least risk to the taxpayers of San Jose."

Sgt. Jim Unland, vice president of the police union, also was relieved with Reed's decision to delay a ballot measure.

"We have been on record for a long time now that we've got to do something about the rising pension costs," Unland said. "But if they wanted to do something in November with our cooperation, we would have had to have had something in place by August, and there is no way. It's just too complicated."

Said Robert Sapien, president of the San Jose firefighters' union: "I'm hoping this is not a delay but in fact a faster way to come to a better solution."

From his perspective, the unfunded pension liability issue has been used "as a political fulcrum to sell anti-labor ballot measures, reduced staffing levels and reduced employee salaries,'' he said. "I'm hopeful we are now serious about coming to the bargaining table in good faith to find legal and effective cost savings reforms."

Despite calling off the fall ballot measure, Reed said the city staff will proceed to work on the ballot language and background about the city's fiscal emergency between now and Aug. 2, the first council meeting after the new fiscal year that begins July 1. He said the draft ballot language would be available "well before" Aug. 2 so that the unions and city staff can debate that language in their negotiations.

"The problem is still there and it's getting worse, not better," Reed said of the city's financial future. "But we have a little time and we will use it productively with our unions. Ultimately, we have to solve the problem, and it is not going to go away."

On Tuesday, the council is expected to take a final vote on next year's budget. To balance the $954 million general fund budget, which has a $115 million shortfall, an estimated 500 city positions are being cut, including 100 cops being laid off.

Ten-percent pay cuts from police and other city employees helped ease the layoff toll. Many city services also are being curtailed. Branch libraries, now open 4½ days a week, will lose half a day of operation, while community centers will see weekly hours cut from 63 to 59 a week.

City officials are expecting more of the same in fiscal year 2012-13, with a projected general fund budget deficit of at least $80 million.

A special council meeting that had been scheduled for Friday to discuss pension reform and the ballot measure language will still take place -- and will be focused on related subjects.

They include a discussion on a report analyzing the costs of other proposed changes in pensions for existing employees; an update on negotiations with unions about combining their meetings with the city on both the proposed ballot measure and pension reform; and the scope and timing of polling to test voter support for more taxes if fiscal reforms are made.