By NEAL WAGNER / City Editor

Pelham Mayor Gary Waters said the city will move forward with formulating a budget and likely will extend the controversial Mercer pay plan at the recommendation of an attorney representing Pelham in a lawsuit filed against the city in 2010.

The lawsuit was filed against Pelham by several current and former firefighters in May 2010, and claimed Pelham violated the Fair Labor Standards Act of 1938 and the Pelham civil service law by allegedly not properly compensating the firefighters for overtime worked.

During a March 4 City Council work session, Waters said the lawsuit recently was taken up by U.S. District Court Judge Madeline Haikala after the judge originally assigned to the case retired.

Waters said Haikala will allow the case to be “re-tolled” to allow firefighters to be added or removed from the lawsuit before holding a hearing in July. If enough firefighters sign on, it could become a class-action suit.

Waters also said the city’s attorney in the case, Albert Vreeland, encouraged the city to not take any steps to modify the city’s current pay plan – the Mercer plan – which tentatively is set to be repealed on April 1.

For the past few months, the City Council and the Pelham Personnel Board have been considering a new city employee pay plan Waters proposed to replace the Mercer plan. Waters previously said the Mercer plan violates the Pelham civil service law.

“We are truly between a rock and a hard place. Do we want to operate under a pay plan that, by our own account, is illegal or do we act against the recommendation of our legal counsel?” Waters said.

Waters said the proposed pay plan, if enacted, would not give all firefighters a uniform percentage pay raise, and said the new plan could be “construed as an unequal pay increase.”

Waters said he will recommend the City Council and the Personnel Board continue to operate under the Mercer plan until the lawsuit against the city is concluded.

Waters previously said constructing the city’s fiscal year 2013 budget was contingent on a new pay plan being passed, but said the city will move forward with constructing the budget now in light of the lawsuit update.

“I say we go ahead and produce a budget and let (the lawsuit) play out over time,” Waters said.

Waters also said the delay is a “blessing in disguise” because it will give the city more time to formulate a new employee pay plan.