MOUNT CARMEL - Contract negotiations between the Mount Carmel Borough Police and the borough have ended amicably, said borough president Tony Matulewicz at Thursday's borough meeting.

In the contract that will end in 2016, the police and the borough agreed to a 25-cent raise per year for 2014, 2015 and 2016. Police will also now contribute a percentage toward health insurance: nine percent in 2014 and 2015 and 10 percent in 2016.

Each police officer will receive a base salary, used for the purpose of establishing a pension amount.

To determine an officer's pension, his base salary will be calculated as his regular hours multiplied by his wage plus no more than $3,125 in overtime per year.

Matulewicz said the overtime cap in calculating base salary will help control ballooning pensions by ending overtime spiking.

"I'm happy with the contract," said Matulewicz.

Police had been working under an expired three-year contract that ended Dec. 31. Pension and health care costs have been the major points holding up the negotiations over the last year.

By far, police salaries and benefits, at a projected $999,465.40, are the largest part of the borough's 2014 spending plan, taking up approximately 60 percent of the $1,652,431 budget. Salaries for eight full-time and four part-time officers cost the borough $450,256; health, pension and other benefits total $549,209.

Officers did not receive a raise in 2011, but their hourly wages increased by 25 cents in 2012 and 35 cents in 2013.

Additionally, they received $75 a year for every year of service to the borough - up from $50 in the previous contract. For example, if an officer is employed at the borough for 15 years, he receives an extra $1,125 annually.

Officers had been contributing 5 percent of their salaries toward their pensions and a flat $500 toward their health care plans each year. The borough contributed $120,000 in pension benefits in 2012, which includes past retired officers, and have budgeted $80,000 for officers for health care this year.

Attempts to reach police officers for comment Thursday were unsuccessful.