The city of Cape Coral and Fraternal Order of Police Lodge 33 reached a tentative agreement Tuesday after nearly a year of negotiations.

The new deal, which still has to be voted on by both the City Council and FOP membership, calls for a 2 percent salary reduction and 3 percent increase in pension contributions.

The deal is for both lieutenants and rank and file bargaining units.

Finance Director Victoria Bateman is now heading the city’s negotiating team, taking over for John Hamment.

Union leader Kurt Grau said the switch in negotiating teams helped to move the process along.

“In the past it’s been rather contentious and difficult to get things done,” he said. “I think they came in and were much more reasonable.”

Interim City Manager Steve Pohlman praised the city’s negotiating team and union leadership for reaching an amicable deal.

“The city’s team and the FOP union leadership approached the negotiating table with Cape Coral’s long-term best interests in mind,” Pohlman said in prepared statement. “When both parties are on the same page a good faith agreement can be reached. That is what happened today.”

Other details of the tentative agreement include: reduction of two days “holiday” pay, a modified step plan and a new, lower “entry level” step for new hires, according to a press release.

All told, the city receives an annual savings of $1.6 million.

Grau said union membership is expected to vote on the agreement “soon,” but did not know, exactly, when the vote would take place.

Grau added that deal is good through Sept. 30, 2012, the final day of the current budget year. A new contract would have to be negotiated at that point.

“We’ll have to see where the city is financially at that point,” Grau said.

The city is expected to sit back down at the negotiating table with Fire Department Local 2424 representatives Wednesday.

2424 President Brendan Fonock did not comment on the potential offer to the city, only saying that the city did ask them to bring a new proposal.

He said it could be similar to their last offer, which equated to roughly 7 percent in total payroll deductions.

“We’re all in this together so it’s in everyone’s interest that we get this deal done,” he said, adding, “I think we’ll be treated with respect and treated fairly.”

The city also agreed to provide a full retiree health insurance benefit for 26 police officers hired between 2001-2003, according to the press release.