The continuing dispute over wages and benefits means many city councillors are unlikely to accept the Amalgamated Transit Union's offer of an arbitrator to end the 38-day-old transit strike, CTV Ottawa has learned.

City officials say they won't comment on the issue until after council discusses the proposal at an emergency meeting scheduled for 9 p.m. Friday.

But at least one councillor believes the two sides remain far apart on basic contract issues, and that the City of Ottawa needs to stand firm on behalf of taxpayers.

"A lot of people think it's only about scheduling, but the fact is, the parties are nowhere near agreement on the financial side," said Rick Chiarelli late Friday afternoon.

"We're over $30 million apart on wage and other benefits."

The union executive told reporters they are willing to go back to work without an agreement on scheduling, which they say can continue to be discussed, possibly with a mediator.

If the city agrees to appoint an arbitrator, the ATU executive will take the arbitration proposal to their membership for a vote. If the city agrees to the union's proposal, the transit strike could be over within the next week.

Arbitration, however, can be very complicated and the city has historically come up short when using an arbitrator to settle labour disputes.

After two days of closed door meetings, Ottawa city council said Thursday the city is willing to change its latest offer if the union agrees to let an independent fact-finder examine the scheduling issue.

"We wanted to be pro-active, to find a solution, rather than rely on a last-minute brainstorm from a third party fact-finder," union vice president Randy Graham told reporters on Friday.

"What we're proposing is with the exception of scheduling ... all of the other outstanding issue would go to binding arbitration. If they accept our proposal, we will bring it to our members for their approval, and immediately after that, service will resume."

Under the city's fact-finder proposal, it could take two weeks for both sides to return to the bargaining table.

The city has already removed the $2,500 signing bonus from its latest offer and says any new package cannot cost more than the one already on the table.

Both sides met with a federal mediator earlier this week. No new talks are scheduled.

"I think folks on both sides have lost sight of the people who depend on our public transit service," said Premier Dalton McGuinty on Friday.

More than 2,300 OC Transpo drivers, dispatchers and mechanics walked off the job Dec. 10, after working without a contract since April.

With a report from CTV Ottawa's Vanessa Lee