PITTSFIELD — The city will save about $1.5 million in health insurance costs in the coming fiscal year under an agreement with a coalition of city employees, officials said.

The agreement, which shifts municipal employee costs from 15 percent to 20 percent over six years, was particularly important, given soaring health care costs and the city's tight financial situation, according to Finance Director Matt Kerwood.

Without the savings, he said, "there would have been reductions in other places in order to absorb that."

The Pittsfield Employee Committee represents all benefit-eligible city employees and retirees — 1,138 and 1,475, respectively — and the new contract begins July 1. Mayor Linda Tyer said the agreement is unprecedented, and it offers breathing room as she and her team prepare a budget for fiscal year 2019.

"The impact that that's having on our budget is, it's providing some relief to our levy ceiling constraints," Tyer said Thursday. "It means we are not seeing a reduction in force. It means we are able to implement a couple of new initiatives — a couple of low-cost but high-impact initiatives."

The preliminary budget will be public Friday, in time for an initial City Council review Tuesday. The PEC agreement was an important piece of that puzzle, Tyer said.

"Reaching this agreement reflects the shared responsibility that our employees accept and it signifies the good-faith collaboration that the city has with its employees," she said. "At each step of the way, there was give on both sides."

Brendan Sheran, chairman of the committee, said the union has been working on the agreement for nearly a year, and began formally bargaining in February.

He said six-year agreements are unusual, and this is a first for Pittsfield.

"I think that's a plus for everybody, because having a long-term agreement allows for more details and sustainability," he said. "By making some structural changes along the way, we can sort of mitigate the premium increases over the course of the six years."

The shift will only affect active employees, Kerwood and Sheran said. Retirees and Medicare recipients will continue to pay the same 15 percent cost share. The agreement also adds a low-premium, high-deductible option, accompanied by a tax-free savings account that employees can use to safeguard themselves against costs incurred before reaching the deductible.

"Any time you go into a negotiation, you want to come away with something you all can live with," Sheran said. "We thought the whole package ultimately worked for us."

Sheran called the agreement "a win," while acknowledging that union representatives were willing to take on more of the cost burdenm given the city's financial situation. He said the union wouldn't want the city to have to lay off more employees in order to get out from under mounting financial pressure.

He hailed the process as a positive one, noting "this isn't all puppies and rainbows in other cities and towns."

That said, swollen health care costs must be addressed at the system level, Sheran said.

"If we had a single-payer system," he said, "cities and towns would be a whole heck of a lot better off."

Kerwood said it's also important to emphasize overall health and personal wellness in light of the national health care debacle.

"If you have a healthier population, you have less claims," he said. "If you're not incurring claims, you're not paying claims."

Amanda Drane can be contacted at adrane@berkshireeagle.com, @amandadrane on Twitter, and 413-496-6296.