The city of Los Angeles and its police officers are continuing to negotiate over a new labor agreement, but contract talks with city firefighters may have reached an impasse, officials said today.

City officials are trying wipe out a $405 million budget deficit in the current fiscal year, which began July 1, and are calling for across-the-board budget cuts averaging 10 percent.

The union representing the police issued a statement today saying talks are continuing, but no deal has been reached.

"The Los Angeles Police Protective League and the city of Los Angeles remain in negotiations for a new contract covering more than 9,900 LAPD officers," the union said.

"Public comments made by city officials earlier today on the status of the contract talks are premature and contrary to a confidentiality agreement between the parties," it continued. "The LAPPL Board of Directors remains committed to ensuring our members receive a fair contract while preserving public safety and the long-term viability of the city of Los Angeles."

Earlier, City Council President Eric Garcetti said the negotiations were going well.

"I am optimistic this week we can wrap them up, but it will require shared sacrifice by police officers, too," he said.

Mayor Antonio Villaraigosa's spokesman, Matt Szabo, concurred. "We are hopeful and optimistic that it will conclude this week," he said.

The Los Angeles Police Department is supposed to cut spending by $129 million this fiscal year to adhere to Villaraigosa's call for "shared responsibility and sacrifice."

Over the last couple of weeks, the City Council's Budget and Finance Committee has been weighing a recommendation to force thousands of police officers to take 18 furlough days, lay off 300 cadets and discontinue police hiring.

The terms of the potential deal with LAPPL are confidential, but officials said it would likely avoid layoffs and furloughs.

A city official familiar with the labor negotiations told City News Service, "We hope to have a resolution that will take care of a major portion of that amount."

As for the rest, Szabo said the city may have to dip into its reserve fund to balance the budget.

Garcetti said he was against the idea, noting the city has only $150 million left in its reserve fund after it withdrew $50 million to compensate for a drop in tax revenue.

"There are no plans to dip into that anymore," he said.

The reserve fund, often called a rainy day fund, is one of the criteria used to determine a city's credit rating. In April, Fitch Ratings downgraded the Los Angeles' credit rating outlook from stable to negative because of increasing unemployment and declining revenue.

Talks with United Firefighters of Los Angeles, meanwhile, appear to be deteriorating, and the Employee Relations Board is in the process of deciding whether an impasse has occurred.

Villaraigosa has asked that firefighters take a pay cut for their "shared responsibility and sacrifice," but the union has resisted.

The city official familiar with the negotiations said, "it's pretty hard at this point." He added that if talks break down, the city could -- as a last resort -- impose pay cuts unilaterally, although "but that would not be one of our first options."

United Fighters President Pat McOsker said his members will make "whatever sacrifices are necessary as long as they're similar to what others are being asked to do."

"What we do need is the city sharing some sacrifices with us, perhaps dipping a little bit into the reserves that they have, which are very ample," he said, adding that "5.5 percent of the overall city budget is set aside in reserve -- we can dip into that."

A coalition of unions representing some city workers has agreed to $105 million in cuts -- including deferring cost-of-living increases, early retirements and cuts in bonuses -- that are meant to avoid layoffs and furlough days, but that deal still needs to be ratified.

The union representing city engineers and some other workers have rejected a similar deal and are facing layoffs and furlough days.