New contracts giving raises to the bulk of the roughly 8,500 city employees are projected to cost the city about $26 million in the coming year.

But both Mayor Kirk Caldwell and City Council Budget Chairwoman Ann Kobayashi said they expect the pay increases to be incorporated into the upcoming $2.09 billion 2014 operating budget without disruption to public services or other government operations.

Three of four units of the Hawaii Government Employees Association that make up most of the city’s white-collar civil servants have already ratified their contracts, while a fourth HGEA unit will be in ratification mode through Tuesday. They are receiving roughly 4 percent annual pay raises in each of two years. Workers would pay a 40 percent share of their health insurance premiums, down from 50 percent.

For the United Public Workers union, leaders of the Unit 1 blue-collar workers have, meanwhile, reached a four-year deal that will give its members roughly 4 percent increases annually through 2017. That unit has ratified the contract. Members of Unit 10 are still in negotiations.

The state and counties are still in arbitration proceedings with the State of Hawaii Organization of Police Officers and the Hawaii Fire Fighters Association. Both are expected to be done soon.

It’s not known what those arbitrated settlements will cost the city, but given the recent HGEA and UPW contracts the Caldwell administration is projecting similar multiyear, 4 percent increases.

"For budgeting purposes, that’s our assumption," Managing Director Ember Shinn said.

"We believe that the contracts that have been negotiated are fair," Caldwell said on Friday. "They’re not unreasonable given the strengthening of our economy. Some of these public sector unions have lived with furloughs … and so they’ve lived through four years of a 5 percent pay cut and with no true increases. So this is trying to address some of that."

The 5 percent, across-the-board pay reduction, instituted in 2009, is scheduled to end July 1.

Caldwell said he wants to be frugal with taxpayer money.

"But at the same time, I recognize the value of the work our public servants do every day," he said. "If they don’t come to work, the toilets don’t work, the water doesn’t come on, our garbage isn’t picked up, our roads are not repaved, our potholes aren’t filled."

Caldwell and Shinn said the administration will work with the Council to find the money to pay for the increases, which were not earmarked in the 2014 budget that the administration submitted on March 1.

"We will be working closely with the Council to make sure these contracts are funded," the mayor said.

Kobayashi said she has been apprised of the financial projections by administration officials.

"I think money has been set aside in anticipation of these increases," Kobayashi said.

But she’s more concerned about fiscal 2015, "because it compounds — 4 percent on top of this year’s 4 percent," she said. "So we try to put money away in anticipation of these increases because they have to be paid."

Such funding can be found in provisional or salary adjustment accounts, she said.

"We do want all the collective bargaining contracts to be honored and we will pay the increased salaries."

The city Salary Commission earlier this month gave final approval to a salary plan giving 4 percent raises to the mayor, the City Council and most department heads. Caldwell said he will forgo a raise for himself, and wants his department heads to hold off on raises until the collective bargaining process is done with unionized workers.