Friday’s news that progress was being made in the city’s negotiations with its three employee unions is a welcome development.

But how that progress might translate to helping the city deal with its worsening financial dilemma is a question only time will answer.

It’s been said a number of times over the past year or so that if the city continues on its current financial path, the municipality might face bankruptcy in three years or less, or be forced to apply for state fiscally distressed status.

Neither of those options should be seen as palatable. Distressed status is no panacea, as the Pennsylvania cities already under that “umbrella” can attest.

With employee costs consuming the bulk of Butler’s budget each year, the current negotiations are the biggest factor in whether the city will reverse its dead-end financial direction or whether the municipalitiy’s financial status will continue to deteriorate.

It’s clear that city officials would like to be fair with the 55 employees covered by the three current agreements, which expire Dec. 31. Nevertheless, based on the city’s dwindling reserve funds, which have been tapped to achieve balanced budgets in the past, it’s just as clear that the unions must be open to serious concessions on such issues as health insurance coverage, and the need for a wage freeze covering one or more years.

Without major concessions, the city might be backed into a financial corner in which it has no alternative but to pare down its employee numbers, which, in the case of the police and fire departments, could pose dangers to public safety.

Whether the news of progress in the negotiations means that a willingness by both sides to acknowledge the tough options can be only speculation for those not privy to details of the talks.

The unwillingness of both sides to reveal where progress has or has not been made is a common practice in contract talks.

Regardless, one issue that both sides need to acknowledge with months to go before the contracts’ expiration is that the quicker that deals are reached, the better it will be for 2012 budget preparations to move forward.

If the contract talks extend to the end of the year, whatever budget is passed prior to that time will not realistically reflect all that the budget should take into account.

“Progress looks good,” said Lt. Don Crawford, vice president of the firefighters union.

“We are looking at everything we wanted to investigate,” said Mayor Maggie Stock.

Soul-searching, open-mindedness and willingness to compromise, including on the issue of authorizing the city to scale back employee numbers, if necessay, must be the foundation for all of the talks under way.

For city residents, it’s wait-and-see as to how the results will affect their tax bills and city services.

For both sides, despite any progress made to date, the current negotiations are exceedingly difficult, because of the dismal financial realities.

Hoping for the best seems the only recourse for now.

Cautious optimism is justified for city taxpayers, based on what those with knowledge of the talks have been willing to say. Unfortunately, there’s little chance that the new contracts will achieve all that the city needs to replant itself on sound financial footing.