"The strategic importance of the contract was greater than the numbers would indicate, because it moved the needle back on one of the hardest areas there is to move the needle back on - health-care contributions," said Pedro Ramos, a former managing director and city solicitor under Mayor John F. Street, and now a lawyer specializing in employee benefits.

The terms of the contract, especially the reduction in health-care contributions, set "a pattern and trend," said Phil Goldsmith, who preceded Ramos as Street's managing director.

"It was a feather in the city's cap and puts somewhat of a burden on the other unions to resist that," Goldsmith said.

On Thursday, Lodge 5 of the Fraternal Order of Police became the first of the city's four municipal unions to reach a deal when an arbitration panel awarded a one-year contract. The police union, representing 6,285 sworn officers, won some wage and benefit increases, while the city cut its health-care contribution by more than 10 percent without affecting benefits.

The FOP's success in managing its health plan helped both sides realize a cost savings. Those savings mean that the city will pay less than 1 percent more this year for the combination of wages, health-care, legal costs and uniforms, according to figures provided by Finance Director Rob Dubow.

Salaries for most police officers will increase by 5 percent as of Jan. 1. Because the raise is instituted in phases, it will only cost the city 3.5 percent more over the fiscal year. The union will also receive better benefits for police widows and the families of officers killed in the line of duty.

But Ramos and others said the city should be happy to trade those increases to reverse the trend of spiraling health-care costs.

"It's a lot easier to manage wages than it is to manage the fringe benefits," said Donald Kettl, director of the Fels Institute of Government at the University of Pennsylvania.

The city's three other unions - the blue-collar workers of District Council 33 of the American Federation of State, County and Municipal Employees; the white-collar employees with AFSCME District Council 47; and the International Association of Fire Fighters - would not comment on the police contract or its effect on their negotiations.

"We're still reviewing it," said Brian McBride, president of the firefighters' union.

Contracts with all four unions expired July 1. D.C. 47, with 3,372 workers, agreed to a 14-day extension that ends today. D.C. 33, the largest of the four with 9,419 workers, has agreed to continue negotiations without a firm deadline.

McBride's union, representing 2,280 firefighters and paramedics, has its own timetable. Like police, firefighters cannot strike and are subject to binding arbitration. The arbitration hearings do not start until Aug. 18 and are scheduled through December.

FOP president John McNesby did not return calls for comment yesterday.

Former FOP president Richard Costello, who preferred one-year deals during his stints as union chief between 1988 and 2002, said the police union cannot worry about what the other unions want, and called any criticism of the deal "cheap shots."

More crucial than the short-term gain on health care, Kettl said, is that the agreement by both sides to participate in a joint labor-management health-care evaluation committee sets up a new way to address costs beyond the traditional adversarial negotiating process.

"The most important thing is that they agreed to a short-term fix and a process for long-term improvement," Kettl said. "It's a completely different way of doing business."

Kettl also said the police commitment to a "year-long conversation with the administration" makes it more difficult for the other unions to "opt out" of that process.

Nutter has generally declined to comment on negotiations, but last week did suggest that the police contract should "serve as a model" for the other unions.

His spokesman, Doug Oliver, declined to comment yesterday other than to point to Nutter's words from last week.