The City Council on Tuesday signed off on a three-year contract that suspends bonus pay and increases employee pension contributions for the city’s largest union — moves that will help the city keep school crossing guards on its payroll, officials said.

The Burbank City Employees’ Assn., which claims roughly 740 workers, agreed to the concessions in September.

In voting to approve the agreement this week, City Council members applauded union leaders and employees for accommodating the city’s financial constraints.

“I really wanted to thank the leadership and members who really stepped up and recognized the challenge we — and that’s we collectively — are all facing,” Councilman Dave Golonski said.

The city has already suspended bonuses for managers and executives who aren’t represented by unions.

Agreements are still pending with two other labor groups, the Burbank Management Assn. and the Burbank Firefighters-Chief Officers’ Unit, Councilman Gary Bric said.

Millions of dollars in bonuses were handed out in the last few years despite the fact that the city was struggling to close a budget gap. The majority of the roughly $8-million budget gap — about $7 million — was due to rising pension costs, which in turn were impacted by bonuses driving up total employee compensation.

Under the new agreement, Burbank City Employees’ Assn. members will start paying a portion of their pension contributions, which so far has been covered by the city. By the end of the three-year deal, the employees will be paying half of the 8% contribution, with the city covering the rest.

“We were told in the beginning that there is a deficit in the budget and it was suggested we open negotiations, which [the union] did,” said Michael Castro, president of the Burbank City Employees’ Assn. “We worked with the city to try to find a solution to the problem and we came up with one. That was it. That’s what they wanted us to do and we agreed to help out.”

Due to the cost savings, city crossing guards will keep their jobs, according to a stipulation written into the agreement.

City Council members recently voted to pay 2% of their own share for retirement benefits. City spokesman Keith Sterling said about $21 is taken out of the council’s monthly compensation of $1,075.

“It’s more symbolic,” Mayor Jess Talamantes said. “We don’t get paid that much, so 2% less is not a lot … it starts at the top, we should step up and do our part, that’s why I agendized it.”

Bric also noted that he and his colleagues on the council, like the other employee groups, will also be contributing a total of 4% to their retirement plans in the next few years.

“We need to lead by example,” he said, “I certainly have no problem with it.”