On April 21, the chamber's 12-member board unanimously approved a recommendation to create a ballot measure to let voters decide whether to continue the practice of binding arbitration. The board then sent a letter to council members April 28, in which chamber President and CEO Susan Valenta wrote, "The current economic conditions means fundamental changes are necessary in order for the city to be able to continue to provide essential services to its residents. Binding arbitration has undoubtedly added to the City's costs for public safety, and Gilroy voters deserve the opportunity to decide if the policy should be repealed."

During the arbitration process, the arbitrator must pick one of two final settlement proposals from each party, taking into account wage considerations, the city's financial situation, and other factors. The arbitrator cannot modify either offer and must select the proposal judged to be most equitable.

Fire Local 2805 and the Police Officers' Association have already bristled at the idea of cutting personnel costs by 16 percent to help the city save millions, and city and chamber officials said they do not expect them to forfeit their most powerful bargaining chip after more than 20 years.

Monday, Gilroy Police Detective Frank Bozzo called Valenta - who said the chamber's Government Relations Committee has always tried to be open and has even invited fire union representatives to previous meetings - to convey his disappointment and ask dozens of questions, she said.

"I just let him talk," she said. "This is a very innocent request, so there wasn't anything that would or should cause any problems because it's really just asking the council to ask the voters."

The council backed away from asking residents in 2005 after a year-long wrangle with Fire Local 2805, whose members - along with those in the Police Officers' Association - are prohibited by state law from using strikes as a bargaining tool. The unions instead defend binding arbitration as their only recourse for fair treatment.

In 2005, disagreements between the city and public safety unions grew so bitter that Mayor Al Pinheiro led a council effort to uproot binding arbitration through the ballot box. However, the move fizzled amid union threats of political retribution in the run-up to the 2005 council election.

Binding arbitration in Gilroy was instituted in 1988 for public safety workers, but was not invoked 2000, when the fire department eventually won minimum staffing requirements that allowed the hiring of three additional firefighters. It happened again in 2006 after a year-long impasse with the 36-member fire union.

The council will discuss the issue at its regular meeting May 18, when City Clerk Shawna Freels will also report the cost of placing the potential measure on the spring 2010 primary election ballot.

More on the debate over binding arbitration along with budget comparisons will be posted later this week and will be printed in Friday's Dispatch.