By Pat Loeb

PHILADELPHIA (CBS) — The City of Philadelphia has a new three-year contract with the Fraternal Order of Police, and both sides have reasons to be pleased.

The contract, awarded by an arbitration panel, gives officers 10.5 percent in raises over the next three years, about 3.5 percent a year. But it also requires a bigger pension contribution meaning officers will see just under a nine percent increase in their paychecks.

FOP president John McNesby calls it fair for both sides.

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“It’s a morale boost and I think they’re happy to have it,” said McNesby. “They maintain medical coverage, which for years we gave up raises for decent medical; we were able to keep that.”

City spokesperson Lauren Hitt says the administration is pleased with work rule changes that she says will help control overtime.

“That ability to shift around officers both to address crime and then also to address peak events,” said Hitt. “That is definitely helpful for the city from a public safety standpoint and then also from a cost management standpoint.”

She says the city also retained the provision that officers must live in the city for the first five years of employment.