SAN JOSE -- For a mayor who has led a fragile majority in a hard-fought quest to reduce mounting employee retirement costs, the outcome of Tuesday's two San Jose City Council races seemed to reaffirm that voters want pension reform and fiscal responsibility from their leaders.

And they want any savings generated to be returned to much-needed city services like libraries and community centers.

While about one-quarter of the county's vote by mail ballots still must be counted, by late Wednesday District 8 incumbent Rose Herrera retained her lead over challenger Jimmy Nguyen by about 10 points, while financial adviser Johnny Khamis led sportscaster Robert Braunstein in the District 10 race by about 5 points.

Assuming their positions hold, and both are ultimately declared winners, Reed will have captured a solid 7-4 majority on the council, which he and others say will give him more leeway when it comes to implementing reforms.

"It makes it a little easier for Reed," said San Jose State Political Science Professor Larry Gerston.

Witnessing Herrera's victory -- despite a heavy union assault in both the primary and general elections -- could also embolden Reed's council allies, who may have feared the threat of the unions' power and its war chests.

"I can only speculate about labor's interest, which was they were attempting to punish Rose Herrera for thinking independently and voting in support of pension reform,'' said Matt Mahood, who leads the San Jose/Silicon Valley Chamber of Commerce, which spent about $230,000 backing Herrera in both the primary and general elections.

"What I think voters want is fiscally responsible and accountable council members who are going to stand up to strong pressure from special interests,'' Mahood said.

Reed agreed with that characterization, saying that the election of Herrera and Khamis "means we can move ahead and solve the problems that we're having to deal with on fiscal issues."

After voters overwhelmingly passed Measure B in June, the city's employee unions sued to stop it from taking effect. Yet Reed noted that the council can still move forward on small portions of the measure as the city waits to defend its case in court in early 2013.

For example, even as voters were lining up Tuesday afternoon at polls to cast their ballots, the council voted 7 to 4 to approve an ordinance that would eliminate bonus payments to retirees, as called for in the measure.

Without the support of Herrera and Khamis, future decisions on pension and fiscal reforms could be jeopardized, Reed said. The 11-member council, including Reed, typically split 6-5 on pension reform votes.

In the District 8 campaign, where unions contributed hundreds of thousands of dollars in independent expenditures to defeat Herrera, a Reed ally, the mayor said the race "was very clearly about trying to reverse pension reform."

The message in District 10, he said, was about Khamis, "the person who seemed to be the most solid on fiscal issues and who campaigned on it."

While both Khamis and Braunstein had backed Measure B, Reed said he believed the police union's endorsement of Braunstein "made people nervous about the potential influence of the City Hall unions, because they have been very clear that their obvious motive is to undo what the voters approved'' in June.

Union leaders disagreed with the characterization of the votes in each district.

Cindy Chavez, executive officer of the South Bay AFL-CIO Labor Council, said she didn't see the council elections as a rejection of union criticism of Measure B.

"Voters aren't talking about that," Chavez said, arguing unions support collaborative pension reforms.

Chavez attributed Herrera's re-election against heavily union-backed Nguyen to her incumbency and his inexperience in politics.

"It's hard to unseat an incumbent, and also Jimmy Nguyen is a newcomer," Chavez said. "When things are confusing, people vote for the incumbent. The opportunity to lead is now back in her court."

Jim Unland, president of the San Jose Police Officers' Association, which was among the unions supporting Nguyen against Herrera, said that the message the independent expenditures sent was about law enforcement and public safety. But the campaign rhetoric emphasized that a number of officers fled the San Jose Police Department for greener pastures after Measure B's passage amid a spike in crime.

He acknowledged, "I get the sense that some of the voters were still in Measure B mode."

Mercury News staff reporter John Woolfolk also contributed to this report.

Contact Tracy Seipel at 408 275-0140.