A state labor relations committee has settled a long-running contract dispute between the town of Tisbury and the union representing the police department that spans nearly three years and four different police chiefs.

The Jan. 28 decision from the Massachusetts Joint Labor Managements Committee for Municipal Police and Fire sides with the town on the central issue of a 3.5 per cent pay increase for patrol officers and police sergeants retroactive to July 1, 2007, the date the contract was supposed to have gone into effect.

The town police union wanted a four per cent increase for the past three years; the town had countered with an offer of 3.5 per cent. The 16-page agreement settles on the lower amount, citing a 3.5 per cent increase for town employees (who are in a separate union) as a benchmark.

“The panel’s decision . . . was strongly influenced by the annual 3.5 per cent base wage increases for . . . members in the town-wide unit. While internal consistency is but a single consideration, this panel considers it to be a compelling consideration given that the parties are only .5 per cent apart on their annual wage offers,” the settlement states.

“The trauma done to internal consistency by awarding increases higher then the 3.5 per cent would not, in this panel’s opinion, be justified,” it also says.

Town administrator John Bugbee yesterday estimated the settlement will cost the town about $125,000 — not $600,000 as reported in yesterday’s Martha’s Vineyard Times. He said state law requires the town to pay the settlement as quickly as possible, which means a spending article will appear on the warrant of the upcoming annual town meeting.

“This is not something we want to keep putting off. The state law essentially requires that it goes to the next town meeting. We also want to resolve this before the start of the next police contract, which begins July 1, 2010,” Mr. Bugbee said.

He said paying for the settlement may require an override of Proposition 2 1/2, although that has yet to be decided.

The police contract dispute dates back to May of 2007 when the Tisbury police union was created; previous to that patrol officers and sergeants were represented by the American Federation of State, County, and Municipal Employees (AFL-CIO) in separate collective bargaining units.

Both groups of police employees told the town they wanted to change representation, and the town voluntarily recognized the Tisbury police union. The two sides entered negotiations for a new three-year contract, but were unable to come to terms, eventually entering mediation with the Joint Labor Management Committee.

Since that time the department has been shaken by nearly constant turmoil, starting with the early departure of former police chief Theodore (Ted) Saulnier in June of 2006 after he was unable to reach agreement with selectmen on a new contract.

Selectmen appointed patrolman Timothy Stobie as acting chief, and later hired John Cashin, formerly of the Norwalk, Conn., police department, as chief. In May of 2009, three months before the end of his three-year contract, Chief Cashin stepped down amid vocal claims that the department was dysfunctional and selectmen had undermined his authority.

Also an investigation was under way into claims by a Tisbury policewoman that she had been sexually harassed by a fellow officer and subjected to retaliatory action from the chief when she complained about it.

Meanwhile, the labor contract dispute dragged on, and last June the Joint Labor Management Committee invoked a provision triggering binding arbitration. In a letter dated June 4, 2009, the committee wrote a letter stating there was “an apparent exhaustion of the process of collective bargaining, which constitutes a potential threat to public welfare,” according to the settlement.

An arbitration panel made up of a police representative, a management representative and a neutral chairman reviewed the various issues forwarded by the town and police union.

In broad terms, the panel supported the town on five points and the police union on four points. While settling on the 3.5 per cent pay raise, the panel also called for new steps to be added to the police wage scale to bring salaries of officers and sergeants more in line with their counterparts in other Island towns.

The settlement acknowledges that salaries for patrol officers in other towns were higher than those in Tisbury. As of July 1, 2006, the Oak Bluffs top-step patrol officer salaries were 7.3 per cent higher than top-step patrol officers in Tisbury. On the same date, a Tisbury top-step patrol officer was 6.6 per cent lower than a top-step Edgartown patrol officer.

The settlement found that a top-step sergeant in Tisbury made 3.1 per cent less than a comparable sergeant in Edgartown, but 1.4 per cent more than a top-step sergeant in Oak Bluffs. “With the exception of the Oak Bluffs sergeant, this set of circumstances would argue in favor of the award sought by the union of 4 per cent annual increases,” the settlement says.

The settlement concludes the best way to address the disparity in wages is to add an extra step for patrol officers and sergeants. Both steps will be retroactive to Jan. 1, 2010.

The panel also granted an increase in hourly differential pay to police officers who work the 4 p.m. to midnight shift from $1.45 to $1.50 an hour, and an increase from 80 cents to $2 per hour on the midnight to 8 a.m. shift.

“It is a well recognized aspect of shift work that there are consequences to individuals serving on shifts other than the day shift. There are real physical and emotional consequences,” the panel said. “The panel is convinced that the current level of night shift differentials paid in Tisbury is so dramatically low compared to comparable communities that they warrant updating.”

The panel also clarified the current system of shift assignments, allowing senior patrol officers to continue to bid for shifts while alternating day and evening shifts, but limiting their choices to one of three shifts. “Under the current system, which is senior based, a junior officer could well be left with a somewhat exotic schedule made up of a combination of day, evening and night shifts,” the settlement concludes. It adds:

“While senior officers selecting such a non-homogenous mix might make a selection based on that individual’s needs, the chances of any residue available to a junior officer would not by magic coincide with their individual needs. Thus, the panel views the existing system as exacerbating rather than assisting in the challenge of officer retention.”

The panel took no action on a town request to use road flaggers instead of police details for town construction projects, and a proposal to expand the definition of emergencies to include calls regarding injured domestic animals. The panel also rejected a request from the police union to create pay increases based on elevated levels of education.

Reached by telephone yesterday, Tisbury officer and union steward Michael Gately declined comment on the settlement until after a joint meeting of both sides. He deferred to union attorney Kenneth A. Grace, who was not immediately available for comment.

Selectman and board chairman Tristan Israel said he thought the settlement was fair for both sides. He said the 3.5 per cent increases, offered by the town three years ago, seemed more than generous considering the change in the economy.

“A lot has changed since then . . . you’re not seeing that type of raise in pay as much now for [municipal employees],” Mr. Israel said, adding:

“But that being said, I think this is an equitable solution for both sides.”