SAN JOSE (KCBS) – Rising pension costs are decimating essential city services, according to a grand jury report issued Wednesday.

The Santa Clara County Civil Grand Jury review of county and San Jose city pension data for 2010 appeared to confirm the warnings of city leaders who have campaigned to reign in San Jose’s pension obligations.

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“Until significant modifications are enacted, there is no doubt the escalating cost of benefits is interfering with the delivery of essential city services,” the report said.

KCBS’ Matt Bigler Reports:

San Jose Mayor Chuck Reed said the grand jury report could provide additional legal ammunition as the city defends Measure B approved by a 70 percent majority on June 5.

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“The grand jury confirms that we’re not exaggerating. It’s a real problem, and if we don’t get some reforms, it will grow and could grow dramatically,” Reed said.

Measure B would have newly hired city employees pay half of their pension costs, and give current municipal workers the option either to pay as much as 16 percent of their salaries to remain in the current plan, or to enroll in a lower-cost pension plan.

Both the police and fire unions have filed suit to stop what they contend is an measure that unlawfully takes away benefits that have already been contractually promised.

“Those numbers aren’t going to have a whole lot of meaning, I don’t think, in the court cases itself,” said Jim Unland, president of the San Jose Police Officers Association. Instead he believes contract law and vested rights will lead the judge to decide in the unions’ favor.

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