Members of the Laguna Beach Municipal Employees Assn. and nonunion managers will get bigger paychecks starting July 1, but they will take on some of the costs of their retirement benefits.

In a meeting Friday, the City Council approved 5% pay hikes, spread over the next three fiscal years, and reductions in retirement contributions made by the city to the California Public Employees System.

Association members and management will be contributing to their CalPERS retirement benefits for the first time, starting with 2% this fiscal year and 3 percent in each of the following two years.

Marine safety managers and personnel will contribute a total of 9% over the term of the agreement.

The changes are expected to save the city $310,000 over the next three years, city Finance Director Gavin Curren said at the early-morning meeting.

Unused sick leave will be valued at 50% of the hourly rate paid the employees. Vacation rates will be valued at 100% but capped at 400 hours.

The city will pay 100% of all employees' and management's healthcare premiums, 80% of the cost for employee dependents — an increase of 5% — and 90% of the cost for management dependents — an 87.5% increase.

Association members and management hired after Monday will be eligible for the city's retiree medical plan coverage when they have worked for the city for 10 years, seven years more than the current provision.

Retirees pay the health insurance premiums.

Other provisions for city employees include an increase in the boot allowance to adjust for the rising costs of protective footwear; adjustment in the compensation for assigned stand-by duty during emergencies; and the use of sick leave to care for a domestic partner, according to the staff report.

The telephone stipend for management will be doubled, reflecting the costs related to smart phones. Police managers will be reimbursed $200 a year for contributions made by them to the Legal Defense Fund.

City clerk and city treasurer benefits are tied to management's but their salaries are regulated by the council at annual hearings.

The council Friday approved a 5% increase in the salary ranges over three years.

City Treasurer Laura Parisi will be paid $6,510 a month in fiscal year 2013-14, including 5% exceptional performance pay, previously approved by the council. City Clerk Lisette Chel-Walker will be paid $6,510 a month.

City Manager John Pietig's benefits are also tied to the managerial benefits, but he already contributes 2% toward retirement. His salary is set by contract, which means the negotiated increases do not apply to him.

The memorandum of understanding between parties and agendas for the Friday meeting are available on the city's website, http://www.lagunabeachcity.net.