The City of Allentown, Pa., has approved a three-year, $7 million fleet maintenance contract with its previous provider, choosing it over a proposal by the union to conduct the work in house, WFMZ reported.

The Service Employees International Union said it could do the work in-house and save the city $420,000 over the life of the contract. The city’s public works director disagreed, stating that the union’s offer would actually cost the city $300,000 more per year.

According to city council meeting notes, the public works director said he estimated labor and insurance costs would make in-house work cost-prohibitive. The union representative said by doing it in house, the city would save on a “management service fee,” which is more than $200,000, that the union considers profit for the company.

The approved contract with Centerra Integrated Services is for three years, with an option of two additional three-year agreements. Centerra’s technicians also belong to the Service Employees International Union.