Ledyard - The outcome of a state arbitration ruling last month gives the town the ability to place a cap on how it calculates pensions for police officers.

The state's decision to place a cap on the retirement calculations at 130 percent of an officer's base pay is the result of the two sides' inability to reach agreement on a new police contract. Previously, there was no cap on an officer's final average earnings.

Because of their failure to come to a contract agreement in the past, the police union and the town have sent at least four contracts to the state Mediation and Arbitration Board since 1996.

The ruling settles the 2008-2011 police contract that expired June 30.

As part of the arbitration process, the town and the union had to submit their last best offers to the state board in June. As part of their last best offers, the town asked for a 120 percent cap while the police union unwillingly asked for a cap of at least 130 percent, said Richard Gudis, an attorney at the American Federation of State, County and Municipal Employees (AFSCME), Council 15, of the Connecticut Council of Police, on Sunday.

"We felt that the cap was unnecessary and the union knew that if its last best offer wasn't somewhere near 130 percent, we would have lost the entire issue and ended up with 120 (percent). Every percent matters, and 30 is better than 20," said Gudis, who represents the town's police officers. "We would rather not have had to fight at all but the town consistently refuses to bargain in good faith with us."

Mayor Fred B. Allyn Jr., said Sunday that the new retirement cap "does help limit the exposure to the town" and that he would like to think future police contract negotiations do not end in arbitration.

"This contract has been in negotiation for two years and it's already time to start another one. We haven't been to arbitration with any other contract I can recall in my four years, it's only been the police," he said. "I'd like to think this next contract won't be as contentious because there is a middle ground. It's not necessary to go to war every time a contract needs to be done for them."

At last Wednesday's Town Council meeting, councilor James Diaz, a member of the negotiating committee said that if the first officer to retire under the previous contract with no cap retired under the new plan with the 130 percent cap, the town would save $420,000 in 25 years.

"It would be a significant savings for the town and we're going to see that savings in the future," Diaz said during the meeting.

j.hanckel@theday.com