"Without a doubt this group has seen the writing on the wall," Councilman Dion Bracco said. "I'm sad to see them activate their union, but I'm not surprised. They've got to protect themselves now."

During the campaign leading up to last year's council election, four of the seven current council members objected to the managerial group's salaries. Debate centered around an April 2007 council decision, when Councilman Craig Gartman was the only one to oppose a plan calling for top employees to earn 15 percent more than those they supervise and 10 percent more than comparable positions in nearby cities. That way Gilroy can retain and recruit the best employees, officials argued at the time.

But Councilmembers Cat Tucker, Bob Dillon and Perry Woodward partially campaigned against the so-called "Best of the Best" program. During a debate last September, Dillon said he would "be happy to hire ordinarily competent people at a reasonable market price," lest the city's salaries continually "ping pong" off fluctuating wages in nearby cities. Tucker said the policy was unprecedented in the private sector, and Woodward called it "ridiculous."

Now that these three sit on the dais with Gartman, council members said the managers and company have taken note and are preparing for an uphill battle.

"They're right to think that one's coming," Woodward said. "Some of these people are drawing astronomical salaries given what they do, and this council is going to have to take a very hard look at that."

Mayor Al Pinheiro said it is no surprise how the bargaining unit has reacted to the new council.

"When you're faced with this situation, this employee group felt it needed to be treated like all other bargaining units instead of being at the mercy of whatever this council decides," Pinheiro said.

But Tucker and Woodward - who said he would spend freed up money to hire more police officers given the department's need according to a recent study - both said the group needs to come to terms with reality.

"Unions are meant to protect the working folks, not the top brass," Woodward said. "If the lawyers in my firm came to me and said they're going to form a union, I can tell you that there would be shades of Ronald Reagan and the air traffic controllers … Running this city is no more complicated than maintaining the air traffic controller system, so if we have to take that line, so be it, but hopefully they won't take it to that point."

Tucker shared Woodward's goal to tighten the city's fiscal belt in light of the city of Vallejo declaring bankruptcy this week due to unmanageable employee compensation, but she said she would wait to hear what Gilroy's revived bargaining bloc has to say.

"I absolutely do not want to end up like Vallejo, and I'm not intimidated by bargaining units, but I will listen to what they have to say," Tucker said. "We're heading into a recession, and government employees have to face reality just like private sector employees."

The Gilroy Management Association includes 35 employees who earn an average of $106,606 and who range from the city's budget analyst to the planning division manager. Higher-ranking department heads such as the police and fire chiefs and the two finance directors add to this group to form the larger, 46-member "exempt group," but they will not join the resurrected bargaining group and will remain non-unionized.

The 1985 city council approved the formation of the GMA when it consisted of 14 employees, but the group never exercised its formal bargaining status and instead dealt with the council informally via former City Administrator Jay Baksa.

Now the group will bargain for itself, led by its elected president, IT Director David Chulick, and three other GMA employees.

"We have been dormant as a group, so there's really no activation," said Chulick, who has worked for the city for four years. He added residents tend to have a misperception of a bunch of managers receiving generous raises willy nilly, but that is just not the case, he said.

"The perception last year was that all of us received huge raises, and that perception is inaccurate," Chulick said.

When the council raised pay ceilings in April 2007 to accomplish the best-of-the-best percentage standards, Human Resources Director LeeAnn McPhillips and Finance Director Cindy Murphy each got $13,789 raises. Chulick stressed that these department heads are not a part of the GMA and that none of the city's 10 highest paid employees are either. Last August the council voted to skip over the city's 10 highest-paid positions for a 3-percent cost of living adjustment, but afforded it to 22 lower-level managers and analysts. Beyond this, Chulick added, only nine of the 35 GMA members received best-of-the-best pay bumps on top of their cost of living adjustments.

City officials defending the exempt group last year often pointed to the fact that sworn police officers have received a 36.5 percent raise since 2000, but the exempt group has only received a 31.5 percent raise in that same time period, and since union employees can also work overtime, their salaries have risen even faster than their superiors'.

Throughout the next six weeks, Chulick said the GMA will continue identifying objectives and modifying its bylaws dating back to the early 1980s. Depending on its decisions, the group will determine when to hold its first formal bargaining session with the council, Chulick said.

All of this made City Administrator Tom Haglund's first week on the job a busy one. At his former city of Hanford, Haglund said the managerial group there bargained informally with the council just as the GMA did via Baksa until now. He added, however, that it's not uncommon for cities to have a managers' unions; he pointed to Visalia and Madera as two examples off the top of his head. "Certainly Bay area cities," Haglund said.

Gilroy management association roster

Barbara Voss - Assistance Finance Director - $95,394 - $127,197 = 111,295.5

Carla Ruigh - Operations Services Manager - $117,066

Carmen Medrano - Financial Analyst - $74,856

Charles Krueger - Senior Civil Engineer - $95,394 - $127,197 = 111,295.5

Clay Bentson - Fire Battalion Chief - $134,012

Daniel Farnsworth - Fire/Ems Analyst - $93,587

David Chung - Building Plan Check Engineer - $95,394 - $127,197 = 111,295.5

David Chulick - Information Technology Director - $137,892

Debbie Moore - Police Captain - $146,125

Donald Dey - Senior Civil Engineer - $120,305

Dwane Stevens Camp, Sr - Network Administrator - $96,724

Edward Bozzo - Fire Battalion Chief - $136,625

Frank Comin - Fleet Superintendent - $80,675

Irma Navarro - Revenue Officer - $89,544

Jacqueline Bretschneider - Fire Marshal - $114,498

Joe Kline - Public Information Officer - $92,403

John Diego - Web Developer - $64,816 - $86,421 = $75,618.5

Kristi Abrams - Development Center Manager - $135,713

Kurt Svardal - Police Captain - $141,074

Lisa Jensema - Environmental Program Coordinator - $89,544

Maria Del Rosario Deleon - Recreation Manager - $76,014 - $101,352 = $88,683

Marilyn Roaf - HCD Grant Coordinator - $89,646

Martin Quiroz - Systems Administrator - $93,972

Michael Machado - Building Field Services Manager - $95,394 - $127,197 = 111,295.5

Patricia Bentson - Financial Analyst - $74,401

Philip King - Fire Battalion Chief - $136,625

Phyllis Ward - Police Crime Analyst - $89,544

Richard Smelser - City Engineer - $145,260

Rickey Brandini - Facilities Superintendent - $87,379

Rosemary Guerrero-Chavez - Budget Analyst - $88,261

Saeid Vaziry - Senior Environmental Engineer - $122,151

Scot Smithee - Police Captain - $134,041

Steve Baty - Public Safety Systems Administrator - $76,014 - $101,352 = 88,683

William Headley - Facilities & Parks Project Manager - $104,388

William Faus - Planning Division Manager - $139,268

Department heads and other not included

Lisa Velasco - HR Analyst - $89,544

LeeAnn McPhillips - HR Director - $148,645

Cindy Murphy - Co-finance Director - $109,192

Christina Turner - Co-finance Director - $91,152

Susan Andrade-Wax - Community Services Director - $139,554

Wendie Rooney - Community Development Director - $164,088

Anna Jatczak - Assistant City Administrator - $89,308

Tom Haglund - City Administrator - $199,000

Shawna Freels - City Clerk - $115,314

Denise Turner - Police Chief - $130,728 - $174,300 = $152,514

Dale Foster - Fire Chief - $162,407

Source: City of Gilroy, FY06-07

Chris Bone Chris Bone covers City Hall for The Dispatch. Reach him at 847-7109 or e-mail him at cbone@gilroydispatch.com.