Posted by Doug Turetsky, October 4, 2012
With the Mayor asking city agencies to come up with $2.0 billion in proposed budget cuts for the next year and a half, one area that could come under scrutiny is overtime spending. In fiscal year 2012, which ended June 30, the city spent about $280 million more on overtime pay than it did five years ago.
Somewhat surprisingly, at least in recent years, the growth in overtime spending bears little relation to changes in the size of the city’s workforce. Over the past five years, the number of full-time city workers has waxed and waned with the ups and downs of the local economy. In fiscal year 2007, there were 270,839 municipal workers as of June 30, 2007. A year later, there were 280,649. By June 30, 2012, the number was 270,795 (the June 2012 projection by the Mayor’s Office of Management and Budget), virtually the same as in 2007. Still, over those five years citywide overtime spending climbed steadily: from $989 million to nearly $1.3 billion.
About two-thirds of all overtime spending is generated by just a handful of agencies, the so-called uniformed forces: the police, fire, correction, and sanitation departments. Uniformed workers in these agencies collected $933.6 million in overtime pay last year.
Likewise, virtually all the growth in overtime spending has occurred among these same agencies. Since 2007, overtime spending by all city agencies on “civilian” employees (including civilian employees within the uniformed forces) grew by a modest $3.9 million, with some agencies spending more and others less.
There are a variety of factors that can drive overtime spending, some of which are unique to particular agencies and not entirely under the agencies’ control. The police department is responsible for the biggest share of the city’s overtime costs—$519.1 million for uniformed officers in 2012. This overtime is the result of a number of factors ranging from arrests and time spent in court to ongoing investigations to unplanned events (for example, Occupy Wall Street, presidential visits, one-time concerts) and planned events (such as annual street fairs, walkathons, and parades). See “IBO’s Police Overtime: Tracking the Big Growth in Spending” for more on types of police overtime spending.
Snowfall can cause sanitation department overtime to pile up. In 2011, more than 61 inches of snow fell on the city and sanitation workers earned $62.4 million in overtime pay to clean it up. Last winter, with less than 7 inches of snow, snow-related overtime melted to a modest $7.2 million.
Declining staff levels at an agency can lead to rising overtime costs. With hiring on hold at the fire department due to a discrimination lawsuit, overtime has soared. As retirees were not replaced, firefighter staffing fell from 11,459 in 2009 to 10,260 in 2012 and overtime spending grew from $127.6 million to $230.8 million over the same period. Despite the falloff in the number of firefighters, fire houses still have to be staffed around the clock to provide a constant level of services. With the judge on the lawsuit now allowing the city to hire more firefighters, the department’s overtime spending should decline as new recruits graduate from the fire academy.
While the fire department used increased overtime spending in order to maintain services in the face of diminished staffing, the parks department cut staffing and increased overtime spending to achieve overall budget savings—savings that may also affect the level of services delivered. Parks department full-time staffing fell by about 430 in 2012 to 2,920, while overtime spending increased by $1.2 million to $8.7 million. That’s about $2,700 in additional overtime spending for each staff member lost, an amount well below the cost of salary and benefits for a full-time employee. Of course, that doesn’t mean all the work done by the former staff members is being accomplished on overtime—budget savings by cutting personnel may also be accompanied by service declines.
Conversely, even when staffing levels rise, agency overtime spending may increase. Civilian full-time staffing grew by about 300 last year at the Department of Correction, but overtime spending jumped by nearly $5.0 million to $11.7 million.
With a tab of more than $1 billion a year, overtime spending appears to be a ripe target for budget cutting. But given the different factors driving this spending, hitting those targets may take some careful aim.