After a marathon negotiating session that ended shortly after 4 a.m. Friday, Philadelphia Mayor Jim Kenney’s administration and the largest union for city workers reached a tentative agreement for a three-year contract that gives employees annual raises, includes a significant boost to the union’s health-care fund, and provides paid parental leave for the first time.

The deal also awards special pay increases to sanitation workers, who became the face of the thousands of essential workers who kept the city running during the pandemic, according to the union. Trash collectors will move up one pay grade, worth about $900 to $1,400 per year, while sanitation truck drivers and a handful of other city employees will get a half-pay range increase, the union said.

In the first year of the contract, workers in American Federation of State, County and Municipal Employees District Council 33 — which represents 9,500 blue-collar employees such as rec center and fleet management workers — will receive raises of 2.5% and one-time $1,200 cost-of-living payments, according to the union. They will get additional 3.25% raises in the second and third years.

The city’s monthly payment to the union’s health-care fund, meanwhile, will increase from $1,194 per employee to $1,500, and the city will also make a onetime $23 million contribution to help stabilize the distressed fund.

The new parental leave policy will give workers up to four weeks of paid time off, according to DC33 attorney Samuel L. Spear.

And the contract will establish a committee to review whether certain city workers deserve pay increases because outside circumstances have significantly changed their work.

Sewer maintenance inspectors, for instance, now encounter large amounts of hypodermic needles while crawling beneath the streets in some parts of the city. The new contract gives them a half-pay grade bump, but Spear pointed to their experience as an example of the type of change the committee may tackle in the future.

DC33 is the lowest-paid city union, although salaries vary greatly. The average member makes about $35,000 per year, union spokesperson Bret Coles said.

Kenney said the city is “proud” of the agreement, which “recognizes the tremendous demands city employees have experienced — especially over the past several years.”

“These employees are essential to Philadelphia’s recovery, and I thank them for their tireless, ongoing work,” Kenney said in a statement.

The contract, which must be approved by a vote of DC33 members, will apply retroactively to July 1, the expiration of the previous agreement.

A cost estimate for the contract was not available Friday. The Kenney administration set aside $25 million for new labor contracts in the $5.27 billion city budget.

The city will easily exceed that reserve, requiring the administration to find other pockets of money in a budget already stretched thin by the pandemic. (It’s common for administrations to lowball the labor reserve in the budget to avoid showing their hands ahead of negotiations.)

The contract talks carried added weight after more than a year in which frontline city employees, many of whom are in DC33, have worked under challenging and sometimes dangerous circumstances through the pandemic. It was also the first negotiated by new president Ernest Garrett, who unseated the union’s longtime leader Herman “Pete” Matthews in October 2020.

Contending that the city has historically been less generous to DC33 than other unions because it is predominantly Black, Garrett lashed out at times during the back-and-forth negotiations shuttling between conference rooms at a Wyndham hotel in Old City. At one point Thursday evening, he threatened to call a strike as early as Friday if the city didn’t budge. Around 1:30 a.m. Friday, he erupted in the hallway outside the meeting rooms, yelling that the city couldn’t be trusted.

Thirty minutes later, the mood had changed, and the sides were again negotiating productively. In the end, Garrett said the contract gave him hope that the Kenney administration is making “major strides” to right the wrongs of previous contracts.

“I leave here optimistic that change is going to come,” Garrett said. “They have fixed that today.”

The administration’s negotiating team was led by Rich Lazer, Kenney’s deputy mayor for labor.

“DC33 has been out there doing some of the hardest work” during the pandemic, Lazer said after reaching the tentative agreement. “We should respect our workforce, all of them.”

Garrett made a point of raising issues that were of particular concern to each of the locals in his union. The final item decided Friday was an increase in the clothing allowance for crossing guards.

The union, however, did not get everything it wanted, including a relaxation of the city’s residency rule, which requires municipal employees to live in the city. The only exception is for police officers, who during former Mayor Michael A. Nutter’s administration won the ability to move out of the city after five years on the force.

DC33 pushed for its members to have the same rule. But Kenney’s team, which is trying to undo the Nutter-era rule change for cops, wouldn’t agree.

Typically, mayors negotiate multiyear deals with the city’s unions in the first year of their terms. But last year, the first of Kenney’s second term, the coronavirus pandemic arrived in Philadelphia shortly before contract talks were set to begin, and the administration instead negotiated one-year contracts for all four unions that included small raises and largely maintained the status quo.

» READ MORE: Police reform, worker safety, and city finances are at stake in Philly’s first union negotiations since the pandemic

Those deals expired at the end of June, and the city’s unionized workers have been working without contracts since then. About 22,300 of the city’s 26,800 employees are represented by unions.

DC33 is the first of the four municipal unions to reach a new agreement. AFSCME District Council 47, which represents white-collar workers such as low-level supervisors and administrative assistants, is still in negotiations.

The contracts for the Fraternal Order of Police Lodge 5 and the International Association of Fire Fighters Local 22 are conducted through interest arbitration, in which a three-person panel selected by the parties decides the contracts.

The FOP contract, through which the city hopes to achieve police reform measures such as revamping the disciplinary process for officers accused of wrongdoing, could be unveiled any day. Arbitration proceedings for the firefighters contract have not yet begun.