Police officers have been working without a contract since June 2007. The arbitrator was brought in after negotiations between the Fraternal Order of Police (FOP) and the city broke down last year.
As the arbitrator considered the case, the economy soured and the city hit the financial skids. Some would consider 2 percent a year a pretty good raise in these times, but it is still less than what the mayor offered the cops two years ago.
"They had my word on 16 percent, but like anything else, the union officials must have not trusted it," Daley said.
The mayor seemed to relish telling the story of how he says the FOP strategy to get a bigger pay raise backfired. The union rejected the mayor's 2008 offer of a 16-percent pay raise over five years, hoping an arbitrator would agree to a 20 to 30- percent increase.
The mayor reminded the cops that while their union waited for a ruling, the recession happened.
"They went to arbitration…so don't blame me. It was your union officials decided that," Daley said.
But Lodge Seven President Mark Donahue called the contract--which maintained retirement at age 55 with free health insurance--a win for the union. And he had different version of what happened on the pay raise. He says the city caused the arbitration when it pulled the 16 percent increase off the table.
The new contract also calls for enhanced alcohol and drug testing of city officers, including those on-duty.
"We will have tests done, both through random alcohol testing and mandatory drug and alcohol testing for any time they discharge their weapon, whether on or off-duty," said city negotiator David Johnson.
Donahue called the on-duty tests unnecessary.
"What they walked away from the table with was a solution to a problem that simply they could not show exists, that is, on-duty alcohol," said Donahue.
If the new contract worsens the reported low morale in the police department's rank and file, Mayor Daley expects to be unfairly blamed for it by the union.
"I'm their kicking boy. In order to make their members mad at me, they have to kick me around. I understand that. That's how it works. They make me the bad guy, but I'm not the bad guy in this situation," Daley said.
More than 11,000 FOP members will get the first three years of the raise, or 6.5 percent retroactively. They will get two percent a year for the next two.
Then, it's back to the bargaining table in 2012. But right now, there are some icy relations between the city and union. Hopefully there's a thaw between now and then.