It was a win some, lose some night for Lawrence city employees.

On one side of the ledger, city commissioners Tuesday evening agreed to give employees a year-end longevity payment that will total about $400,000.

But on the other side of the equation, employees were told to expect some major changes aimed at reducing the amount of overtime the city pays in 2011.

In a 4-1 vote, commissioners approved the longevity program, which basically will pay each full-time city employee $48 for each year of service the employee has with the city.

“I’m impressed with the challenges we have put on the employees and how they have responded,” said City Commissioner Mike Dever. “They have been able to make it through the cuts and the scrutiny and still come to work and do a good job.”

Commissioners said they didn’t like the idea of dipping into the city’s savings account to pay for the program, but City Manager David Corliss said he was “reasonably confident” the city could find a way to make the budget balance by the end of the year. The city’s latest projections show it will be close.

The projections estimate that by funding the longevity program the city will need to dip into is fund balance account for about $100,000. But Corliss said there may still be ways to make more cuts to other city spending, or that revenues during the last three months of the year may come in higher than projected. Either way, Corliss said the city’s fund balance would remain healthy, with about a $12.4 million balance.

Commissioner Lance Johnson was the lone commissioner to vote against the program, which has been given to city employees for many years. Johnson said city employees were deserving, but that now was not the right time financially, and that he would rather reward employees based on their performance instead of longevity.

On the overtime issue, city commissioners signaled change is on the horizon. A report by city staff found the city has varying overtime policies for different departments, and that parts of the city’s policy are out of step with other area cities.

“We’re pretty much the most generous of anybody around,” City Commissioner Aron Cromwell said of the report’s findings.

Lawrence allows employees to count vacation time, holiday time and sick leave toward the 40 hours worked in a week. Federal law allows employers to not count holiday, vacation and sick time as hours worked when calculating whether an employee has exceeded 40 hours in a week. Lawrence was the only city out of seven surveyed where all three categories were part of the overtime calculation.

City Commissioner Rob Chestnut put together a memo proposing that the city no longer allow vacation and sick time to be counted toward an employee’s 40 hours when computing overtime. He also said a policy that allows some departments — but not all — to pay employees for overtime when more than eight hours are worked in a day should be discontinued. Chestnut said overtime should be computed based only on total hours worked in a week. Also, Chestnut said employees should be given the option of taking compensatory time off instead of overtime, as long as their supervisor approves.

Corliss recommended that the commission authorize a city employee task force to study the overtime issues. A majority of commissioners balked at that idea. Instead, commissioners said they wanted Corliss to develop a policy based off of Chestnut’s memo and then gather feedback from employees. The item is expected back for final approval by mid-February.

None of the overtime changes would impact members of the city’s fire and police department unions because their overtime polices are part of an employment contract. But the overtime issue could become an issue when those contracts expire in 2012.