Negotiations between the Chandler Lieutenants and Sergeants Association police union and City Manager Mark Pentz over a proposed wage freeze will continue through next week.
The union's lawyer has warned the proposal could lead to a lawsuit.
Jane Poston, city spokeswoman, said the City Council did not reach a decision at its Thursday meeting, and that talks aimed at reaching a resolution will continue.
"The city manager and the union will continue the discussion into next week," Poston said.
CLASA's labor contract with Chandler is only a year old and doesn't expire until July 2011. Even so, the City Council on Thursday is slated to consider eliminating the 48-member union's annual merit pay - which gets added to base pay each year to move officers through their pay range - and replacing it with a one-time payment this year that would not be added to base pay.
Both city officials and the union's lawyer, Martin Bihn, have acknowledged that the labor contract does not reference merit pay, and that city personnel rules should apply. City officials point to personnel rules that state merit increases shall not be automatic, but at the discretion of the department director based on such things as each employee's length of service, performance and other information.
Nevertheless, Bihn has said the personnel rules don't give Pentz the authority to suspend merit pay, and that the decision is up to the City Council. In a July letter to council members, he implied the union could sue the city over the issue.
City officials have argued the necessity of reducing personnel costs to help balance the budget in a time of plunging revenues because of the economic downturn. Replacing a total of about $46,000 in merit pay with a one-time payment to CLASA would help the city slow down the annual escalation of salaries, officials have said.
A similar proposal to replace merit pay became a point of contention during negotiations with three other unions, as well. The Chandler Service Employees International Union, the Chandler Law Enforcement Association and the local International Association of Firefighters also rejected the proposal, which caused an impasse that prompted the City Council to bring in a federal mediator.
Ultimately, the three unions chose to accept alternatives to eliminating an increase to base pay. Under the new agreements, the police officers and service workers unions will take a small pay cut, and firefighters will get reduced holiday pay.
Chandler labor leaders have said a wage freeze would hurt efforts to recruit new employees and eventually create a wage disparity between longtime employees and new hires. City officials have said they're willing to let CLASA also propose alternative cuts in lieu of its merit pay proposal.