CONCORD -- The city and its two police unions have agreed to one-year contract extensions that swap retirement benefit cuts for pay raises.

The deal comes just as the City Council is scheduled on Tuesday to get its first look at the $81.4 million budget for the fiscal year that begins July 1.

Beginning in July, police officers will pay the full 9 percent employee contribution to CalPERS, the state-run retirement system. Currently, the city pays 5 percent of the employee share for the 11 members of the Concord Police Managers' Association and for the 136 rank-and-file officers in the Concord Police Association.

In exchange, all officers will receive a 3.5 percent raise, also beginning in July.

Above and beyond that, POA members will get an additional 2 percent salary increase, their first raise in four years.

Beginning in January, the payment for officers who decline health coverage will be reduced from $637 to $400 per month for current employees, and to $200 for anyone hired next year. The city expects to save $63,000 on this health waiver benefit during the upcoming fiscal year, based on the 22 officers who currently receive it, according to Laura Brunson, human resources director.

While the agreement with the police managers will save Concord $5,000 in fiscal year 2014, the total 5.5 percent raise for POA members will add $437,000 to the budget, according to Brunson. The police contracts, which were set to expire next month, will be extended until June 2015.

The union presidents could not be reached for comment.

Mayor Tim Grayson said the agreements give city leaders an additional year to assess Concord's financial situation in light of the still-sluggish economic recovery. He praised the unions for taking on their full pension contribution and agreeing to reduce the health waiver payment.

"The POA and the city are partnering together to make sure that we have a very strong, sustainable, balanced budget," Grayson said. "If it means people have to take a year at bare minimum in order to get better direction, then all sides are willing to do that."

Although Councilman Edi Birsan supported the managers' deal, he voted against the POA contract amendment because he believes this is the wrong time for an across-the-board 2 percent raise. He also pointed out that other city employees hit with furlough days and a pay freeze during the recession haven't been restored yet.

"We've got great cops, we have reasonable pay, and I thought they would follow the lead of their management and hold the line," Birsan said. "Wait a year. Once we know a little more about our economic situation we will know whether we will get a real increase in revenue or not. That's the time to do this."

Concord has a balanced budget for the upcoming fiscal year, but it needs more revenue to avoid further painful cuts. Since the recession began in 2008, the city has laid off 144 employees, cut programs and services, increased employee contributions to health and retirement benefits, outsourced some services and used $24 million in reserves to balance the budget.

With the additional revenue from Measure Q, the half-cent sales tax increase voters approved in 2010, the city has preserved current service levels and replenished its reserves. But Q expires in March 2016.

"Measure Q has been the lifeline that has allowed us to continue to provide the services the community demands," said City Manager Valerie Barone. "So one of the conversations the community is going to have to have is, what next?"

Lisa P. White covers Concord and Pleasant Hill. Contact her at 925-943-8011. Follow her at Twitter.com/lisa_p_white.