About 1,600 workers for the Metropolitan Water District of Southern California engaged in a contract dispute have rejected the latest offer from a mediator and are threatening to go on strike, the union representing the workers announced Tuesday.

The members of Local 1902 of the American Federation of State, County and Municipal Employees (AFSCME) a member union of the AFL-CIO voted by a margin of 61 percent to 39 percent to reject the mediator’s offer. If no settlement is reached, the workers say they are prepared to go on strike for the first time in the agency’s 77-year history.

“We’ve been working hard to find a compromise since our contract expired last June,” said union president Robert Reeves. “MWD employees are keenly aware of the havoc a strike would cause to the economy and the health of communities across Southern California.”

The MWD released a statement, saying it was mulling what to do in response to the rank and file’s rejection of the contract offer.

“While progress was made on a number of issues during mediation, we are disappointed that AFSCME rejected the mediator’s proposed settlement agreement. The District will weigh its options in the days ahead. We have taken all steps necessary to ensure safe and reliable water deliveries to our customers without interruption,” the statement read.

According to the union, the MWD is seeking revisions to its contract with AFSCME Local 1902 to enable it to transfer employees at will throughout the MWD’s service area, which stretches from the San Fernando Valley to the California/Arizona border. The union said the agency is also seeking a 50 percent increase in employee contributions to health coverage.

The MWD board could take up the issue at its board meeting next Tuesday.

The MWD provides water on a wholesale basis to 26 cities and water agencies serving 18 million people in six Southern California counties. The district imports water from the Colorado River and Northern California to supplement local water supplies.