Ocean City — Council on April 26 approved a three-year collective bargaining agreement with the city’s police union, the Policemen’s Benevolent Association, Local 61.

City Business Administrator Michael Dattilo said Mayor Jay Gillian wanted “fair” contracts with the city’s unions.

According to Dattilo, health benefit coverage will be provided to retirees in the PBA who’ve served 25 years in the pension system and 20 years with Ocean City.

Employee contributions towards health care will be consistent with state law. Dattilo said older contracts used to have varying amounts of employee contributions towards health care. He said the recent PBA contract was reopened and provided for 1.5 percent contribution for health care.

He said terminal leave will be capped for new hires at $75,000.

The contract provides for a zero percent wage increase in 2012, a 1.5 percent increase in 2013 and a 2 percent increase in 2014. Dattilo said it would be an average of 1.2 percent increase per year over the three-year period.

New officers hired after the effective date of the contract will progress through a new ten-step guide, rather than the previous seven-step guide.

“That provides for a significant savings for a new officer as they move through the salary guide,” Dattilo said.

The contract provides longevity for new hires to not begin until the tenth year of service, an increase of three years from the previous contract, where longevity began at seven years.

“The amounts of longevity stay the same from what was negotiated in the previous contract which provided for flat rates and a cap that were much more advantageous to the city than come of the previous existing longevity rates at that time,” Dattilo said.

He said the contract extends from Jan. 1 2012 to Dec. 31, 2014.

Members of council thanked the administration and PBA for reaching a consensus.

“The police department is the forerunner in always helping the taxpayers of Ocean City when we as you to help. We do appreciate that and it’s reflected in this contract,” Ping said.

Council President Michael Allegretto echoed his support for the contract.

“I certainly feel the administration and the PBA worked well together. They got the best deal they could,” Allegretto said. “I think both sides made the compromise they felt were necessary to move us forward.”

The administration is currently negotiating with the city’s six unions whose contracts expired last year.