Dunn said during the City Council meeting Monday that all seven of the employee groups have offered to pay their portion of their pension.
"It appears that the combined savings from all the employee groups will exceed potentially any savings I could get from outsourcing either police services or fire services, which means that I am putting the analysis of those services on hold pending the outcome of the labor agreements," Dunn said.
The city has responded to the employees' concessions and is now working out the details on the agreements, which should be ready for City Council approval at the next meeting, on Jan. 28, he said.
In November, the City Council gave Dunn approval to look into several ways to reduce costs to the city, including asking employee groups to make concessions.
Dunn recommended looking into outsourcing public-safety services and contracting out other city services with the goal of freeing up at least $2 million annually in the budget.
If all city employees agree to pay their share of pensions, Dunn estimated a savings of $1.3 million to the general fund.
"Although we haven't solidified our agreements with our different employee groups, I would just like to thank everyone in advance for the effort, the communication and working with us in this extremely difficult time," Councilman Brendan Brandt said.
"And I would hope and I believe that in the future, whether it be 2013 or 2014, that we're going to look at better economic times."
Reach Sandra via email, call her at 909-483-8555, or find her on Twitter @UplandNow.