CHICAGO, IL &#8211 Mayor Rahm Emanuel has forged an agreement with the union representing Chicago Police sergeants on contract and pension issues that threatens to undermine the costlier demands that the Fraternal Order of Police has made on behalf of rank-and-file officers.

Jim Ade, president of the Chicago Police Sergeants Association, announced the surprise agreement in a weekend e-mail to his members without specifying the terms.

City Hall sources confirmed that an agreement with the sergeants has been reached that includes a modest annual pay raise in the 2 percent range — far short of the 12 percent over two years that the FOP has demanded.

The agreement also includes pension reform.

“It’s proof that, when unions and management sit down and look at the reality of the situation, we can come to an agreement,” said a source close to the negotiations.

Ade could not be reached for comment. In his weekend e-mail to the troops, Ade said the contract “addresses the concerns” that his members have communicated in e-mails, phone calls and personal conversations.

The union president made it a point to thank the city for “being open to our ideas and working with us — not against us.” Details will be revealed at a special board meeting Tuesday, he said.

“We believe this to be an excellent agreement that gives each of us a modest raise without forfeiting any of the important benefits gained through previous contracts,” Ade wrote.

“These negotiations not only addressed the collective bargaining agreement, but also forged a collective comprehensive plan to ensure that each of us would receive the pensions that we worked so hard for. There were many difficult issues that were addressed in putting this pension plan together, but the end result is a guaranteed pension for our membership.”

FOP President Mike Shields was taken aback by the agreement forged by the sergeants association. Without knowing the details, Shields said it was impossible to say whether the sergeants deal undercut the FOP’s bargaining position.

“We haven’t seen their contract. We don’t have the information they have,” Shields said.

“We’re bargaining for a different labor contract. Our contract is different than the sergeants.”

Emanuel was tight-lipped about the sergeants’ deal during an unrelated news conference Monday to propose strict new penalties for gun crimes.

“We are having good discussions and making good progress,” the mayor told reporters.

“As I always said in general, if everybody would be part of reform and change, we could get a situation where we have a win-win.”

The Chicago Sun-Times reported last week that the FOP is demanding a 12 percent pay raise over two years, a reduction in health care contributions and a $3,000-a-year residency stipend to compensate them for being forced to live and send their kids to school in the city.

The pension and contract agreements with 1,125 police sergeants mark a surprise turn-around for City Hall.

Two months ago, the sergeants association accused Emanuel of jeopardizing a ground-breaking agreement on three pivotal issues — a new contract, retiree health care and a solution to the city’s pension crisis – by cutting off negotiations that were “90 percent done.”

Union sources said then that the sergeants and Chicago Firefighters Local 2 spent six months in intensive negotiations with the city after the mayor established an ambitious timetable of solving all three issues by Labor Day.

After 16 or 17 negotiating sessions, the sergeants association was on the brink of an agreement in preparation for a joint lobbying effort in Springfield needed to ratify the proposed pension reforms when Chicago Public School teachers began their seven-day strike.

That’s when the Emanuel administration pulled the plug on contract talks with police and fire. Union leaders understood the hiatus. What they could not understand was the city’s decision not to resume talks when the teachers strike ended.

After a three-month hiatus, frustrated union leaders accused the mayor of stalling while awaiting recommendations from a commission charged with solving the city’s $800 million retiree health-care crisis.

A court-approved, 10-year settlement agreement that calls for the city to share costs with retirees is due to expire on June 30, 2013.

“We’ve reached agreement on most of the issues in the contract. We’ve reached agreement on a way to address the pension crisis. But City Hall’s inability to be decisive and fair to retired employees is endangering this agreement,” a union source familiar with the negotiations said then.

“If they come to us and say, ‘We’re gonna turn our backs on retirees,’ the union won’t support that and the clever arrangement we’ve come up with to solve the pension problems and the next collective bargaining agreement could all fall apart.”

The source added, “The union was willing to make certain agreements with them on contributions and other items that will help the city deal with this overwhelming pension debt they’re facing. . . . But the message we’re getting from City Hall is, ‘We’re not interested.’ They’re running the risk that the union’s help won’t be there, but their problems will still be.”

From The Chicago Sun-Times