Nevertheless, consider these facts:

■ Gilroy's retail sales tax revenues are off more than $550,000 in a six-month, year-over-year comparison period.

■ City salary and benefit obligations continue to rise at an alarming rate - fully 75 percent of the city's discretionary monies go to fire and police salary and benefit costs.

■ Top level employees in Gilroy are in the process of forming yet another bargaining unit. So approximately 40 employees, who are eligible for merit increases, will also be bargaining for cost of living and benefit increases.

The lessons surrounding Vallejo's bankruptcy should be well learned
The city of Vallejo, 117,000 population and less than 100 miles from Gilroy, is declaring bankruptcy. "The (Vallejo) city council voted unanimously Tuesday night following hours of public comment and months of failed negotiations with police, fire and other unions … the San Francisco suburb is expected to generate $5 million less in revenue than projected because retail sales and property values are down amid an economic slowdown and slumping real estate market," the Associated Press reported this week.

This should be a wake-up call for Gilroy, and the spotlight should be re-directed to the proverbial "elephant in the room." That elephant is binding arbitration for public safety employees.

Binding arbitration, which Gilroy voters unwittingly passed in the 1980s, completely obliterates the notion of home rule. When negotiations with the fire union, for example, come to an impasse, the union can simply force the issue into binding arbitration. That hands critical financial decisions on pay, benefits and even staffing levels to an outside arbitrator instead of the elected City Council. Invariably the game becomes one of "well, Vallejo firefighters have the 3-at-50 retirement benefit and Gilroy has ample reserves, so …" So, the union makes out like a bandit … our city's costs increase rapidly, we're penalized for our fiscal prudence and we're rudely reminded that we've ceded critical financial oversight to someone who has zero accountability to this community - a faceless arbitrator from somewhere like Palo Alto.

Binding arbitration is indeed the elephant in the Gilroy living room
Unfortunately, the collective courage of our elected officials on this issue falls well short of the cowardly lion in the Wizard of Oz. Only Mayor Al Pinheiro has shown flashes of having the hutzpah to put the issue before Gilroy voters. Perhaps the Council will collectively revisit the issue for ballot purposes, or perhaps it will take a resident referendum. Regardless, binding arbitration should be rescinded from the City of Gilroy's charter and local control re-instated before Gilroy finds itself in a financial black hole.

In addition, there are serious concerns related to the management group seeking to unionize. We urge Council members to follow through on campaign pledges to review salary policies related to this group. Pay levels for every position should be scrutinized, and, given that a new union is almost assuredly going to drive up costs, positions should be reviewed. Are all the positions necessary given the city deficit and economic outlook? Lastly, there's no point in delaying if consolidation and layoffs are clearly necessary. It's time to get serious.