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Clerical and public-works employees will see 50 cent per hour wage increases for the next five years under the terms of a contract approved last week by city council.

Employees also will contribute 1 percent of their salaries to cover their health insurance premiums, City Solicitor J. Jason Elash said. Although that deduction will be phased in over five years for existing employees, any new hires will have to contribute the 1 percent as soon as they begin.

Approximately 70 employees represented by Teamsters Local 205 of White Oak have been working without a contract since Dec. 31.

"They've taken wage freezes in the past, which is what made this so difficult," Elash said.

The agreement, retroactive to Jan. 1, was approved by 7-0 vote at Wednesday's meeting. Union members had previously ratified the agreement.

Mayor Jim Brewster said the pay raise was justified both in light of the past wage freezes and the layoffs last year, which eliminated 10 positions.

"You have to consider the needs of the workforce that remains, and their morale," he said, adding that the public works department remains shorthanded.

City officials must now negotiate new contracts with police, firefighters and crossing guards, whose wage pacts expire this Dec. 31. Police and crossing guards are represented by Local 205, while firefighters are represented by International Association of Fire Fighters Local 10.

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In Other Business: Council unanimously approved the site plan for a new 8,400-square-foot office building to be constructed in the 500 block of Fifth Avenue.

To be constructed between Sheridan and Huey streets, opposite the former G.C. Murphy Co. headquarters, the structure will house local offices for the Social Security Administration and will return two vacant lots to city tax rolls.

The developer is Lawrenceville-based JRA Development Inc. James Aiello, president of JRA, told council last week the new building will be valued at $2.5 million.

"We're excited about coming to McKeesport, and we're excited about the new building," he said. "It also will be a LEED-certified building, which will mean it's energy efficient."

When the new building opens, Social Security will relocate from its existing offices, located in the same block.

The fate of the current building, owned by a trust, is unknown. Built in 1996, the one-story structure is valued at $558,300, according to county tax records.