Palo Alto's tortuous struggle with its firefighters union over a new labor contract came to an official conclusion Monday night when the City Council voted unanimously to ratify a three-year deal with the union.

The new contract, which the union ratified last month, followed 16 months of negotiations that concluded in an impasse and binding-arbitration proceedings. It imposes a second pension tier for new workers, requires employees to chip in for their pension and medical costs and, most crucially, scraps the controversial minimum-staffing provision, which required at least 29 firefighters to be on duty at all times.

"This has been a difficult path for both sides," Mayor Sid Espinosa said just before the votes were cast. "It's been a long process and this is very much needed for the long-term health of our city."

Councilman Larry Klein, who made the motion to ratify the contract, cited the Beatles song "Long and Winding Road" to describe his feelings about the new agreement. He said he was "delighted that after all the time and trouble we had in negotiations, that we're finally here."

"It certainly helps our budget and helps us not only achieve savings and have our personnel be more efficient, but it sets the right tone," Klein said.

The council's approval effectively ends the binding-arbitration process that kicked off after the city declared an impasse in negotiations in February. It also forces the firefighters union to make the types of adjustments that other labor groups, including the Service Employees International Union, Local 521, and the non-unionized group of professionals and managers, have been making over the past two years. Both of these labor groups have been forced to accept second pension tiers and requirements that they contribute toward medical premiums.

City Manager James Keene had continuously stressed the need to get similar concessions from firefighters and police officers.

"It's three years now since the Great Recession hit and we finally have an agreement with the firefighters where they begin to make some contributions to the fiscal challenges that the city has been working through," Keene said Monday.

Council members concurred and praised, with varying degrees of enthusiasm, the proposed contract. Councilwoman Gail Price called the contract a "watershed agreement" and thanked the firefighters for agreeing to the concessions. Councilman Greg Scharff was slightly less sanguine.

"I'm glad it finally happened," he said. "I'm not sure why it took so long, frankly."

Councilman Greg Schmid said the new agreement "gives us structural adjustments that create a fair solution for workers in Palo Alto."

"This is the end of a long, arduous set of negotiations that dealt with salaries, benefits and staffing," Schmid said.

While the new agreement comes as a sign of hope after months of bitter negotiations between the city and the union, the two sides remain far apart on the issue of binding arbitration. The council voted 5-4 in July to put the repeal of the binding arbitration, which is required by the city charter, on the November ballot. The union strongly opposes the repeal of the provision, which enables a three-member panel to settle disputes between the city and its public-safety unions.

Staff estimates that the concessions in the new contract will save the city about $1.1 million in the current fiscal year and bring in more than $1.4 million in annual savings in future years. In addition, staff expects the city to save money by reducing staffing -- cuts that the city can impose now that the minimum-staffing provision is gone from the contract.

Staff will return to the council's Policy and Services Committee in November with a more detailed report about ways to reduce Fire Department staffing levels and potential cost savings from these reductions.