The Tracy City Council took one more step toward balancing the city’s budget Tuesday, Aug. 21, by approving a labor agreement with police officers and several city leaders, including the city manager.

By a 4-1 vote, with Councilman Bob Elliott dissenting, the council approved staff-negotiated contracts with Tracy Police Officers Association and Tracy Police Managers Association, which represent 76 full-time employees and three lieutenants and two captains, respectively.

The council unanimously approved contracts for police Chief Gary Hampton, City Attorney Daniel Sodergren and City Manager Leon Churchill.

All the contracts take effect Wednesday, Aug. 22, and expire June 30, 2015.

According to an estimate by Assistant City Manager Maria Hurtado, the five agreements could save the city $924,466 in three years from its general fund budget, which was anticipated to run a $2.2 million deficit in the fiscal year from July 1, 2012, to June 30, 2013.

Hurtado said the contracts “slow down future increases in future health care costs and move toward employees paying their share of pension costs.” She said they are a major component of the city’s eight-step plan to increase revenue or cut costs by a combined $8 million by fiscal year 2015-16, when Measure E, a voter-approved half-cent sales tax increase, expires.

City management hopes to save $3.4 million with employee concessions alone in 2015-16.

The contracts approved Tuesday mirror those accepted earlier this year by Tracy Firefighters Association and five other city employee groups. A contract with part-time workers was also approved but entailed no changes from the previous contract.

Police officers, commanders and Churchill, Sodergren and Hampton agreed to pay the employee share of their contribution toward the California Public Employee Retirement System.

They also agreed to forgo cost-of-living raises and pay a larger share of any increases to health insurance premiums levied by insurers.

In exchange for the concessions, the city agreed to give the police department employees 300 hours of “flex leave time” over the span of the three-year contracts. That time can either be used or sold back to the city at the end of each fiscal year, but cannot be rolled over past the lifetime of the contracts.

Also, a police master patrol officer’s position will be eliminated and a corporal rank program added, which Hurtado said was agreed to by both the police union and the police chief .

Meanwhile, Hampton will receive 170 hours of management leave time, while Sodergren and Churchill will be given 40 hours of management leave, which matches the leave given other city department heads in a contract approved June 19.

In the contracts with Tracy Police Officers Association, Tracy Police Managers Association and Sodergren, the city will save money during the next three years — an anticipated $804,792, $76,569 and $5,788, respectively.

However, flex time for Hampton and Churchill will cost the city more than the CalPERS concessions save through June 30, 2015.

Hurtado told the council that although those two contracts will cost the city an extra $41,237 and $11,332, they set the city up for savings of $22,425 and $15,926 in 2015-16 and beyond.

City staff members assume that the next round of contracts will include the same employee concessions — waived cost-of-living increases and employee contributions to CalPERS — without a give-back of flex leave.

Craig Kootstra, a police officer and board member of Tracy Police Officers Association, hoped such measures might not be necessary.

After the meeting, he said he and the rest of his union hoped the city would remember the concessions police officers and others agreed to, if the city’s financial situation improved by then.

“Our hope is the economy turns around in the next three years,” he said.

Kootstra also said that the police union was “overwhelmingly” in favor of the new contract and appreciated the relationship between the union and city negotiators.

“It’s tough,” he said of the concessions, “but I think we all agreed we could do our part to help the city.”

Councilman Elliott, however, said the city again fell short in seeking to balance its budget.

“We certainly appreciate the valuable contributions all our city employees make, and we want to do our best to stand by them,” he said. “(But) it is our responsibility to put our city’s finances in the best position we possibly can.”

Elliott said he would rather cut back more on compensation now than lay off public safety officers in the future, if the city’s tax income were not buoyed by a resurgent economy.

“In my opinion, we could have given back too much,” he said regarding flex leave. “We could have done better on some of these contracts.”

Elliott explained that he voted in favor of the contracts for Hampton, Sodergren and Hampton because the other four council members had already approved similar contracts for the other department heads, and he thought it important to maintain “equity in how we treat our employees.”

Three members of the council who approved the contracts are public safety officers or retirees. Mayor Pro Tem Michael Maciel retired from Tracy Police Department, Councilman Steve Abercrombie retired from Hayward Police Department and Councilman Robert Rickman works for the California Highway Patrol.

Mayor Brent Ives receives a pension from University of California for his 37 years working at Lawrence Livermore National Laboratories.

Elliott is a retired U.S. Army colonel.

At a glance

• WHAT: Tracy City Council regular meeting

• WHEN: 7 p.m. Tuesday, Aug. 21

• WHERE: City Hall, 333 Civic Center Plaza

• DETAILS: Mayor Brent Ives, Mayor Pro Tem Michael Maciel and councilmen Steve Abercrombie, Bob Elliott and Robert Rickman were present.