Employees in Millburn's five municipal unions are receiving a 3.5 percent increase in salary for the next three years, but the budget impact is much less because of financial maneuvering.

The salary increase will be split into six-month intervals, which allows the increase to appear at 2.64 percent in the township's budget. Additionally, there were give backs in medical care that resulted in a savings of $224,000 per year. Combined together, the salary cost is a 1.69 percent increase in the budget.

Assistant Township Administrator Alex McDonald said Wednesday the savings are $165,850 in in 2010, $189,058 in 2011 and $216,210 in 2012.

The contract settlements cover 193 employees in the Millburn fire, police and public works departments. (Editor's note: The wrong number of employees was quoted to Patch Tuesday night. It has now been update)

The five contracts are for four years each starting Jan. 1, 2009, and there is a 3.75 percent increase in salary for the current year. Township Adminstrator Tim Gordon said the money for that increase is included in the current budget.

The contract settlements was announced during Tuesday's Township Committee meeting by Mayor Sandra Haimoff, who said the negotiations focused on salary and health benefits.

Gordon said the main changes in the health benefits is to reduce the number of plans from two to one. It represents a $58 savings per month per employee. Additionally, the prescription plan was changed from two tiers to three tiers, which represented another savings.