Lawrence, Kansas - For the second year in a row, the city is struggling to reach agreement with police officers and firefighters on new labor contracts.

The Lawrence Police Officers Association and the Lawrence Professional Firefighters chapter have declared an impasse in negotiations with a team of City Hall negotiators. A federal mediator was on scene last week, but was unable to bring the sides together.

"Overall, the number of issues we have unresolved is greater this year," said Diane Stoddard, the assistant city manager who is leading the City Hall team.

The labor contract for both employee groups will expire at the end of the year. State law prohibits public employees from going on strike, but a representative of the firefighters group said the negotiations have taken a heavy toll on employee morale.

"We feel like they have given us a take-it-or-leave it proposal," said Mike McMillen, president of the firefighters group. "We feel like they haven't negotiated with us in good faith. There's a lot of frustration."

Stoddard declined to discuss specifics of the negotiations, but downplayed concerns the process is damaging City Hall's relationship with employees.

"Overall, we consider our relationship to be good with all employees, and we work hard to ensure that is the case," Stoddard said. "But given the economic times, we believe it is not unusual to have these discussions be lengthier than other times."

Last year, police and fire groups declared an impasse after they could not agree with the city on the issue of longevity pay. This year the list of issues includes overall compensation, longevity pay, wellness days, sick leave, requirements for general competencies, and how long a new labor agreement should be in effect.

The sides are leaving open the possibility of more negotiations between now and July 28, when city commissioners are scheduled to act as arbitrators and pick from proposals presented by the city's management team and the two employee groups, which are similar to unions.

Compensation rates, and how they compare with wages paid in other communities, are major points still left unresolved.

"The LPOA is optimistic that the city will follow through with its philosophy and commitment that officers (and) detectives will be compensated at the market average during 'robust' economic times as well as during challenging economic times," said Mike McAtee, president of the police officers association.

This year police officers and firefighters received a 1.5 percent cost-of-living increase, plus employees were eligible for merit pay increases of up to 5 percent.

That made police and fire employees - the only two groups that negotiate labor contracts with the city - significantly different from other general city employees. This year marks the first time that general city employees no longer are eligible for cost-of-living increases. Instead, city employees only are eligible for merit increases of zero to 5 percent, based upon their performance reviews.

General city employees - who don't get to negotiate with the city - are likely to see smaller pay increases in 2010. City Manager David Corliss' recommended budget calls for the total amount of money set aside for merit raises to increase by 1 percent in 2010. That's down from a 2 percent increase in 2009.