One of the few issues that separates the two candidates running for Santa Clara County District 2 supervisor in a race largely focused on their backgrounds and experience is how to tackle the county's ballooning employee retirement bill.
It is hardly a minor concern: The county is on the hook for about $4.1 billion more in employee retirement perks than it has funds to cover, a figure almost as big as its entire yearly budget.
As the race between labor leader Cindy Chavez and Teresa Alvarado, a water district communications manager, heads into the last few weeks before the July 30 runoff, the candidates increasingly are being asked at public forums to address the issue.
And for good reason: Pension costs are expected to grow 50 percent in coming years to cover investment losses and benefit increases. Retiree medical care costs have more than quadrupled over a decade.
Left unchecked, those costs will continue taking a bigger bite out of the budget for programs and services, requiring even higher taxes -- the county just raised its sales tax through Measure A to one of the highest rates in the country -- just to keep them afloat.
"We can't ignore the problem and hope it will just go away," Alvarado said. "The long-term financial solvency of the county is at risk."
If elected, she said she will "engage from day one" with County Executive Jeff Smith, public employee union leaders, the four other supervisors and the community to arrive at a "fair and equitable solution" through a transparent negotiation process that honors benefits earned by current employees and retirees, but ensures that county services are protected.
Chavez has said pension reforms are needed, but she also has criticized San Jose's divisive approach, noting it has led to lawsuits and a rash of police resignations.
"All options should be explored," she said, including increasing employee contributions and the vesting period -- the years a county employee must work before they can retire at age 50 with free medical care for life. In San Jose, that period has been bumped to 15 years. At the county, the vesting period, depending on the employee hiring date, ranges from 5 to 8 to 10 years.
But trimming pension and retiree health perks that are generous by private industry standards will pit the supervisors against politically powerful public employee unions that are major political campaign donors.
Critics of those unions' influence -- business groups and the GOP -- are lined up behind Alvarado. They see the front-running Chavez as a rubber stamp for unions that enjoyed a bevy of retirement benefit sweeteners when she was a San Jose city councilwoman and pension trustee.
Chavez also supports San Jose employee unions now fighting voter-approved benefit cuts. City leaders say the cuts are needed to tame retirement costs that have more than tripled and forced both tax increases and deep cuts to city services.
"Cindy's issue is a single focus, which is to promote her issues in terms of wages, benefits and jobs for the unions," said former Supervisor Don Gage, who has endorsed Alvarado. "You need people like Teresa, who have a more balanced perspective of what is best for the county."
If elected, critics expect Chavez's actions will mimic those during her eight years on the San Jose council, where she also served as a trustee in 2005 and 2006 for the pension plan serving city police officers and firefighters, both big contributors to her campaigns.
During her two terms, city police, firefighters and other workers received a host of retirement add-ons, as laid out in a 2010 city audit: pensions jumping from a maximum 85 percent to 90 percent, annual cost-of-living adjustments increased to an automatic 3 percent, richer survivor benefits and bonus checks from investment returns. The council approved most of those increases, and Chavez acknowledged supporting them.
But benefit costs have skyrocketed, more than tripling in a decade, and continue to outpace revenues despite four new taxes approved since Chavez left office. City leaders say they were forced to cut employee pay 10 percent and eliminate 2,000 jobs to balance the budget.
Chavez supporter Jacquie Heffner, former leader of San Jose's Mobile Home Advisory Commission, said it's unfair to blame her friend for the fallout when so many other council members voted for the same benefits.
"Cindy is a taxpayer just like everybody else," Heffner said. "Because of the positions she has held, she understands both sides. There will need to be concessions, but if anybody is able to get those concessions, it's Cindy."
Like their San Jose counterparts, Santa Clara County employees have made concessions, in their case $75 million worth for each of the past two years, to help ease budget crunches brought on in part by growing retirement costs. Included were unpaid furlough days off, higher contributions toward employee pension plans and retiree health benefits. But as employee contracts are coming up for renewal, it's clear those concessions haven't been enough.
"What they have given up," Gage said, "is just a drop in the bucket."
Staff writer John Woolfolk contributed to this report. Contact Tracy Seipel at 408-275-0140.
Vote-by-mail ballots sent to voters July 1.
Last day to register to vote: July 15
Last day to request a vote-by-mail ballot: July 23
Election Day: July 30
For more information, call toll-free at 866-430-VOTE (8683) or go to www.sccvote.org.
Source: Santa Clara County Registrar of Voters