The Cranston City Council has approved a contract with the firefighters union that is expected to save the city $3.1 million over 3½ years.

The new contract, approved unanimously Thursday, achieves the savings mostly by leaving up to 27 positions vacant, increasing employees’ contributions to their health insurance and providing smaller pay raises. In return, the city agreed to extend the current contract one year, giving firefighters a 3-percent raise on July 1, 2010, and a 2.5-percent raise on Jan. 1, 2011, Cranston Finance Committee Chairman Emilio L. Navarro said Friday.

“Even when you incorporate the raises,” Navarro said, “because of the concessions … you still had a savings.”

The firefighters, represented by Local 1363 of the International Association of Fire Fighters, approved the agreement June 10 in a 142-to-2 vote.

The city’s police union rejected similar concessions last spring.

More than half of the savings in the firefighters’ contract will come from not filling existing vacancies — as many as 15 from now until June 30, 2010, and up to 12 more through June 30, 2011. The vacancies are not expected to affect minimum-staffing requirements.

The second biggest share of the savings — nearly $500,000 — will come from higher employee health-insurance contributions. The contract increases the firefighters’ payments for an individual plan from $520 to $1,200 a year, or 15 percent of the cost.

The cost of a family plan increased to $2,400 a year, up from $1,040, or 13.7 percent of the cost. The changes were effective on July 1.

Other savings resulted from retroactively eliminating four paid holidays in 2008-09; eliminating one paid vacation day, and providing smaller pay raises.

In all, the budget for the coming fiscal year included concessions totaling $2.2 million, Navarro, the finance chairman, said.

larditi@projo.com