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The union that represents 630 white-collar city employees declared a contract impasse Friday, as bargainers blamed the setback on uncertainty over how much state aid Buffalo will receive.

The impasse was declared after city negotiators withdrew an earlier offer that included pay raises of 2.5 percent in each of the next three years for employees represented by Local 650, American Federation of State, County and Municipal Employees.

Louis R. Giardina, the city's director of employee relations, said the offer was withdrawn in light of heightened concerns that last week's tragedy in New York City could result in Buffalo receiving less aid than anticipated. The city has asked for an extra $31 million in aid, a request that could be scaled down significantly, according to some state officials.

"There's no way in the world I can sit there and propose spending money that we might not have," Giardina said.

But Local 650 President Michael H. Hoffert said he thinks it's premature to assume that the state will be forced to slash assistance to Buffalo.

As a result of the impasse, a mediator from the Public Employment Relations Board will get involved to try to bring the two sides together.

If the mediator is unsuccessful, a fact-finder will be appointed to make recommendations in a process that could add at least six months to a negotiating effort that began in April. If either side were to object to the fact-finder's recommendations, the dispute would go to the Common Council, which could impose a one-year settlement covering economic issues only.

"This is a disturbing development, because we felt we were getting close to a settlement," Hoffert said. "We've put a lot of time and energy into this process."

The union was seeking raises amounting to 13.5 percent over three years, plus salary upgrades for many employees, Giardina said Friday. At one point in the bargaining, the city included salary upgrades for some workers in its proposals.

Hoffert claimed the union has compiled data that proves that many of its employees are being paid less to perform identical jobs than their counterparts in the Buffalo Sewer Authority, Municipal Housing Authority and the Board of Education.

"These employees just want a fair wage. They're not looking to become the highest-paid workers," Hoffert said.

Giardina agreed that negotiators had made substantial progress over the past five months, resolving more than two dozen issues.

"We were right down to the nitty-gritty with the white collars," he said. "But in light of the fact that the city could be facing a large shortfall, we had to withdraw our economic proposals today."

In addition to salary increases, one unresolved issue involves potential concessions in health insurance coverage.

Mayor Anthony M. Masiello directed department heads this week to begin working on cost-cutting plans that would target non-essential services. He also froze spending for capital outlays, including new vehicles and equipment. e-mail:

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