After 16 months of negotiations, the Palo Alto City Council unanimously ratified a new contract with city firefighters at last Monday’s council meeting.

The city council and the International Association of Fire Fighters Local 1319 struggled through tense negotiations and binding-arbitration proceedings over the past year and a half. The groups settled on a three-year contract that would save the city $1.1 million for the current fiscal year and reel in more than $1.4 million annual savings for the future years.

This move brings the city a step closer in its attempt to close the $4.3 million gap in the city’s budget passed by the city council in June, without any obvious reductions in services.

The new deal, ratified by the firefighters union in September, implemented a structural readjustment of firefighter benefits, including establishing a second pension tier for new employees and requiring employees to contribute to their own pensions and medical premiums. Rather than the city paying its firefighters with shares to the California Public Employees Retirement System (CalPERS), union members will directly start with a 6.5 percent CalPERS member contribution, which will increase to 9 percent the next year.

Stanford University pays for a third of the Palo Alto firefighters’ payroll and a quarter of their costs for fire engines and other capital equipment.

One significant change through the new firefighter contract is the elimination of the mandatory minimum-staffing condition. This contentious provision mandated that at least 29 on-duty firefighters be present at all times, a costly action for the city.

The “mandatory staffing requirement prevented the city from managing in an efficient way,” said Councilman Larry Klein.

The agreement revamped the entire staffing section of the contract, stipulating a bare minimum of at least one fire captain, one fire apparatus operator and one firefighter for each engine, truck and rescue company. Similarly, only two paramedics will be on staff in the fire department.

The council’s Policy & Services Committee is expected to give a more detailed report in November on more ways to reduce staffing costs and lower fire department staffing levels.

Councilman Pat Burt stated that these changes were “an important step” and “necessary measures to take as a city in order for a sustainable future.”

The deal, discussed extensively by city officials, prevented possible layoffs of police officers and the closing of fire stations, a proposal they have contemplated since May. The new firefighter plan may close the $4.3 million hole with the help of a $2.1 million transfer of funds from the city’s budget stabilization reserve.

The agreement required the firefighters union to make concessions that most other union and non-unionized labor groups of professionals and managers, including the Service Employees International Union and Local 521, have made over the past two years. Since the downturn of the economy, labor group members have faced tumultuous negotiations over their benefit packages, including accepting second pension tiers and required contributions to medical payments.

Initially, the firefighters struggled to reach a compromise with the city council when city officials refused their $3.1 million proposal in late June and declined their offers of mediation in late July.

The initial proposal included $3.1 million in concessions that included a four percent wage decrease for firefighters and engineers and a five percent decrease for captains and fire inspectors, as well as a 10 percent contribution to their health insurance premiums and adjustments to the pension formula for new employees.

However, the union presented the proposal while the city council contemplated altering the city’s procedure for settling labor disputes with public safety workers and management, which under current law is through binding arbitration.

This led to the controversial Nov. 8 ballot Measure D, opposed by the firefighter union, to overturn the policy of binding arbitration.