The Atlanta City Council passed Mayor Kasim Reed’s $539 million budget late Monday night, granting city workers modest pay increases and giving the city’s economic development arm a $2 million blank check.

Reed and union leaders had been locked over pay raises in recent weeks, with the mayor originally proposing a 1 percent hike for police officers and firefighters and 3 percent for corrections officers and city workers making less than $60,000 annually.

Those workers will now receive those raises in addition to a half-percent increase in January, pending performance reviews and increased revenues from city courts now under more pressure to recover fines. City leaders said they plan to identify other cost savings measures to help fund the half-percent increase.

The council unanimously approved the measure to spend $3.2 million on the combined raises, the first for public safety workers since early 2011.

Other high priced items approved Monday included a last-minute amendment by at-large Councilman Aaron Watson to grant Invest Atlanta, the city’s economic development arm, $2.3 million for what was loosely described as business development.

Councilmembers Yolanda Adrean and Felicia Moore were among those opposing the amendment, asking for more information about what projects the cash infusion would fund.

Councilwoman Joyce Sheperd, who voted for the amendment with some hesitation, said the money would help entice companies to Atlanta. The measure passed by a 10-5 vote.

Unhappy with the Invest Atlanta vote, Moore later proposed an amendment to increase public workers’ salary raises from 1 percent to 3 percent, a move that failed 4-10.

Moore expressed her frustration that Invest Atlanta was funded over additional pay raises.

“We continually tell our employees, ‘We don’t have the money, we can’t afford it, we can’t fund it.’ And then get to the budget and end up with an amendment … for things we haven’t even discussed,” she said. “What we’ve said is that business retention, or the subsidy to other businesses … is more important than salary increases to our employees.”

Atlanta Professional Firefighters Association union spokesman Stephen Borders was disappointed in the pay raise outcome, calling the increases a “near empty political gesture.” Borders criticized the negotiation process and the city’s unresponsiveness to labor concerns.

“We don’t feel we made any significant impact with this,” Borders said. “The biggest thing we asked for was a collaborative and open process to work together with the administration to come up with short- and long-term solutions to salary (issues). But we’ve only been on the receiving end of communication.”

But Atlanta police union leader Ken Allen and Gina Pagnotta-Murphy, president of PACE Atlanta, the Professional Association of City Employees, were more optimistic.

“It’s not a perfect fix,” said Allen, with the International Brotherhood of Police Officers Local 623. “But it gives us some resolution for the future. That’s all we ever asked for it to do.”

Pagnotta-Murphy said the overall 3.5 percent bump for city workers making less than $60,000 was a step in the right direction.

“I’m very satisfied with it for now,” she said.

Duriya Farooqui, Atlanta’s chief operating officer, said the increases reflect Reed’s commitment to public safety workers while the city climbs out of an economic slump. This year’s budget is nearly $100 million lower than the 2008 fiscal budget, yet Reed’s funding of public safety departments is at the city’s highest.

“Mayor Reed has made public safety his priority and his actions here demonstrate that’s the case,” she said.

In the meeting that adjourned at nearly 11 p.m., the council also narrowly approved spending $750,000 to create a public art gallery within 72 Marietta Street, the former site of The Atlanta Journal-Constitution which currently houses the Department of Watershed Management.

The overall budget passed by a 12-3 vote, with Councilmembers Kwanza Hall, Alex Wan and Moore voting against the legislation.