NEWPORT — Another year, another arbitration.

Twelve months since firefighters and the city turned to an arbitrator to settle their differences over a labor contract, they’re back at it again.

With the two sides still unable to reach an agreement, an arbitrator held a first hearing earlier this month on resolving yet another year’s worth of pay and benefits, this one for the fiscal year that ended June 30, 2007.

“I would hope that it gets done by early next year, hopefully in the spring by the latest,” said David Hanos, president of Local 1088 of the International Association of Fire Fighters.

Each arbitration addresses one contract year at a time, as required by state law. That means that even when the hearing concludes, the union and city still have no agreements for succeeding years.

“We’re almost three years out. We’re sitting in the 2008-2009 contract year,” said Hanos. “We’ve been negotiating ever since the award for 2006.”

But so far, the talks with the city have been fruitless. The union made an offer that was rejected by the city and the two sides agreed they had reached an impasse a few months ago, Hanos said. Craig Overton, a member of the American Arbitration Association who in recent years presided over the police union’s dispute with the city, has been assigned to the firefighter’s case.

In arbitration, a three-member panel is formed, made up of a neutral arbitrator and one representative for each of the two sides. During the quasi-legal proceedings, expert witnesses are called to testify. After the hearings have concluded, an arbitrator issues a written decision. The first hearing of the current case was held on Feb. 9, with the union beginning the presentation of its side.

In the last case, arbitrator Mark L. Irvings awarded the firefighters a 3.5 percent pay increase while requiring them — for the first time — to contribute toward the cost of their health insurance premiums. The city had been making that demand.

As a result, firefighters now have to contribute 1 percent of the sum of their base salary and longevity payments toward individual health coverage, or 2 percent for family coverage. A cap protects them from paying more than 10 percent of the cost of the premium. In addition, those who retired since the arbitration pay 1 percent of their pension toward health coverage. The arbitrator also reduced the “buyback” payment for those who opt not to accept health insurance, from half of the cost of the premium to $1,000.

Hanos said the union remains willing to negotiate a long-term contract.

“We’re still 100 percent open to anything the city would offer us that is reasonable. We can’t be expected to take a pay cut. We understand times are tough … but with the cost of everything going up … this is our livelihood, this is how we make our living. We are just looking for something fair,” Hanos said.

“In a very tough economy, it’s very difficult for everyone, politically and matter-of-factly. These aren’t easy decisions placed on our elected officials.”

Meanwhile, he noted, arbitration costs both sides money and makes it more difficult for the city to manage its finances.

“You can’t budget for an unknown,” he said. “They can [only] guess what it’s going to cost.”

A four-year dispute between the city and Lodge No. 8, Fraternal Order of Police, which resulted in back-to-back arbitrations, finally ended in 2006. The two sides reached a five-year retroactive agreement that ends next year.

All three of the city’s largest unions — firefighters, police and teachers — now share, to varying degrees, in the cost of their health-insurance coverage. A three-year teacher contract ratified this month will in its final year raise members’ share of their health insurance premiums to 15 percent.

rsalit@projo.com