The union representing 1,700 city of Portland's employees announced this morning that it had ceased mediation with the city and threatened to strike if several key demands are not met. The union is organizing a rally in Chapman Square next Wednesday before the talks resume on September 30.

The Local 189's list of issues is pretty long on complicated, so I asked union rep James Hester to break down for me what his group's beef is with the city. He cited four main sticking points that his union will strike over if they can't reach a deal with the city: contracting out labor, overtime, seniority, and wage rates.

OVERTIME—City council took up this issue over the summer when Dan Saltzman argued that overtime pay should only kick in if employees work more than 40 hours a week. The city has backed down significantly from that idea, but the current sticking point is that the city wants employees who haven't worked 40 hours a week to be paid time and a half only if they're pulling mandatory overtime—no taking a day off in the middle of the week and making it up for extra money with voluntary weekend overtime. But the union says that change will hurt people who need to take time off to watch their sick kids and want to work to make up the difference.

SENIORITY: Years ago, the city had to decide promotions based strictly on seniority. That changed in 1998 to allow the city to choose 25 percent of the time between the top two most senior employees for who to promote to a given position. Now the city wants to do away with that seniority rule entirely and be able to choose from the top two candidates all the time. The union, of course, fiercely defends seniority rights.

Two more sticking points below the cut.

WAGE FREEZES: Both sides acknowledge that times are tight and they've already agreed to a wage freeze for this year. But the bickering comes in hammering out increases for coming years. Hester says the union wants a 1-5 percent increase in 2011 and 2-5 percent increase in 2012. The city says that to avoid more layoffs and service cuts, it needs a 1-5 percent increase until 2012.

CONTRACTING OUT: The city can only contract out work—anything from designing transportation projects to fixing broken pipes—when getting an outside party saves the city money. The city has to notify the union whenever it's going to contract out work and give the union time to respond. The union says the city has broken that policy numerous times, most notably when it tried to hire a third-party service to fix parking meters, which ended in a penalty awarding six workers $28,300 each. "This is our work," says Hester. But city negotiator Yvonne Deckard responds that the city needs to contract out work sometimes, like capital projects or emergency fixes if something like a sewer pump bursts, and that work doesn't fall under the contracting out policy.