Sixteen months of negotiations between the city of Palo Alto and its firefighters came to a conclusion Monday night when the Palo Alto City Council voted unanimously to ratify a new three-year deal with the union.

The new contract imposes a second pension tier for new workers and requires employees to contribute to their pension and medical costs. The new contract also no longer includes the minimum-staffing provision, which requires 29 firefighters to be on duty at all times. Other city labor groups such as the Service Employees International Union, Local 521 and the non-unionized group of professionals and managers have also recently accepted second pension tiers and requirements to contribute toward their medical premiums.

The contract’s ratification ends the binding-arbitration process that began after the city declared an impasse in negotiations in February. The new concessions will save the city of Palo Alto approximately $1.1 million in the current fiscal year and $1.4 million annually in future years.

Combined with rising revenues and savings, the $1.1 million in savings negotiated in new contracts will likely stave off projected personnel cuts for the current fiscal year, according to the City Council Finance Committee at its Tuesday meeting. Revenue from documentary-transfer tax and from sales tax are both up $1.2 million above projections, and hotel taxes have exceeded projections by $600,000.

The removal of the minimum-staffing provision will also allow the city to save money by reducing Fire Department staffing. The city’s Policy & Services Committee will review a more detailed report on ways to reduce Fire Department staffing levels in November.

— Ivy Nguyen