Years of administrative headaches and budgetary turmoil in the New Haven Fire Department may soon come to an end.

At a public hearing last night, the Board of Alders Finance Committee heard testimony from city officials, union representatives, firefighters and members of the public over the proposal to extend the New Haven Fire Fighters Local 825 Union’s contract until June 2018. The new contract won overwhelming approval from the union last month. City officials and union representatives alike said they hope that the new contract will mark the beginning of a new era at the fire department following 13 years of instability.

The negotiations over the new contract, months in the making, have proved contentious. Union president James Kottage was accused of working to include an extended pension for himself in the new contract, leading to an internal investigation into the veracity of the allegations.

The most important aspect of the new contract is the collaboration it engenders, according to both Labor Relations Director Marcus Paca and Kottage.

“For too long, the fire department’s been stagnant. There’s been a lot of contention over there,” Paca said. “This represents a collaborative effort between the city of New Haven, the administration and the fire department to work together to move the fire department forward in a positive way.”

Kottage took a more nuanced stance. He said that cultivating “labor peace” is the most important element, noting that factions within the union and the city had split during three years of disputes over the previous contract.

“Getting a contract extension will bring about a lot of good feelings,” Kottage said.

Three interlinked problems have vexed the fire department for a number of years — understaffing, disputes over exams and ballooning overtime payments. Paca said that the new contract goes a long way towards solving all three issues.

The weighting of the oral and written portions of promotional exams has proved divisive, and a dispute over weighting reached the Supreme Court in 2009. Observers have also noted that African-American candidates tend to do better on the oral portion of the exam than on the written. At present, the oral portion is weighted at 40 percent, but under the new contract, it will be weighted at 65 percent.

While city officials contend that this proposal will resolve the weighting issue, Kottage said this does not represent a permanent solution. Paca noted that Local 825 had originally disagreed with the new weighting, but eventually agreed in negotiations.

Understaffing, which, in turn, causes excessive overtime costs, has been a serious problem in the fire department for years, according to Kottage. The fire department currently has 120 vacancies, meaning that about a third of its 370 positions are empty.

“We’re supposed to have 25 captains,” Kottage said. “Right now we have zero.”

The position of fire marshal has been vacant for years. In the last 11 years, the number of firefighters has fallen from 366 to 234, while overtime costs have gone from $1.6 million to a projected $8.5 million this year.

Paca said the new contract will “unclog the hiring pipes.” Kottage explained that the fire department cannot hire new privates without first promoting current privates to lieutenants, a process that had been blocked by disputes over the tests. By resolving those disputes, he said, the fire department would be able to make new hires. Paca echoed that sentiment, noting that the contract will bring at least two new recruitment classes into the department’s ranks.

Understaffing has also led to inflated overtime costs — a pressing issue on the city’s finances for years.

The city budgeted $3.9 million for fire department overtime for the fiscal year 2014–’15, but spent $916,000 on overtime in the month of August alone. Current estimates suggest that the overtime bill could rise to $8.5 million for the year — $4.6 million over budget.

Kottage said that City Hall should bear some responsibility for the overtime costs

“We wouldn’t have an overtime issue if the administration, human resources and City Hall did the right thing,” he said.

The new contract goes a long way toward solving the dual problems of understaffing and overtime costs, said Paca. He added that $900,000 in overtime payments per month is not a sustainable model for the city. But he said that adding two recruiting classes in the coming year would help drive down this figure.

The sense that the contract extension could bring a new era to the Fire department was apparent at the hearing. Local 825, city administrators, and firefighters all agreed that the contract might create a new paradigm of operation, both at the Fire department itself and in the Department’s relations with the city.

“Our last contract took three years and cost both sides dearly,” Kottage said. “With the new good relations with the administration, we will be able to move the fire department forward.”

Joseph Fields, an insurance attorney for Local 825, echoed that sentiment, stressing that the union will work closely with the city. He added that, as a result of the settlement, past disputes on the issues will not resurface.

Members of the public who spoke at the hearing had more mixed reactions.

Fire department inspector Stephen Ortiz said the new contract represented the best hope of moving forward in over a decade, but he warned of the consequences of letting the opportunity slip.

“If we don’t move forward, we’re again entering an uncharted territory,” he said. “We desperately need new hires. We need to bring stability back to the New Haven Fire Department.”

Others were more skeptical . Ken Joyner, a New Haven resident, noted that the new contract will only save about $2 million — a paltry sum compared to the $8.5 million forecasted for overtime fees this year, he said. Moreover, he said that the net savings are little more than a dent in the size of the city’s total budget.

The Board of Alders will vote on the contract on Nov. 6.