By Ted Schnell • BocaJump | Nov. 17, 2011
City Manager Sean Stegall, addressing the Elgin City Council on Wednesday afternoon about the city budget, said those who have been critical of the city’s overtime costs are chasing a red herring.
“Overtime is a red herring argument,” Stegall said in response to Councilman Bob Gilliam’s request that city staff explain what would happen if the city eliminated its overtime costs. “Overtime actually is cheaper than costs of hiring more people ... It saves the city money.”
Chief Financial Officer Colleen Lavery said a decision to eliminate overtime would have a direct impact upon the police, fire and public works departments, affecting mandates regarding the number of firefighters on duty and prohibiting costly special investigations, such as the Elgin Police Department’s investigation into last month’s murder of 5-year-old Eric Galarza Jr. That investigation, which Police Chief Jeff Swoboda said had detectives on the clock 24 hours a day, cost the city $40,000, Lavery said.
“I think the fundamental question is why is overtime preferred over hiring more people,” Councilman John Steffen said.
That dates back to 2004, said Fire Chief John Fahy. He explained that a consultant the city hired at that time advised the overtime costs were a cheaper alternative than hiring additional personnel.
Councilwoman Tish Powell said she understood that the consultant indicated the overtime was more economical as long as it met certain benchmarks that did not exceed 8 percent to 10 percent of the city’s payroll.
Stegall has said in the past that criticisms of the city’s overtime costs were off base as long as the city was saving money in the process. Specifically, he said, that up to a point, paying someone overtime makes more sense than hiring another person, because there is more to consider in terms of hiring costs than payroll. Besides a paycheck, each employee also represents a cost in terms of health insurance and pension benefits, for example, not to mention training and other aspects.
He continued on that track Wednesday night as he explained to the council — and likely more to the public — that a cursory examination of the city’s overtime costs cannot be the basis for judgment.
“Overtime has to be looked at in depth. We employ a low-staff, high-overtime model, whereas most municipalities employ a moderate-staff, low-overtime model,” he explained. “But we save money … only one pension benefit, only one health benefit, plus overtime equals savings.”
The result, he said, is that Elgin taxpayers are getting a good deal.
Fahy, Swoboda and Public Works Director Dave Lawry each stood before the council, outlining the various reasons their departments incur overtime and the measures they have taken to curb those costs.
Fahy explained that with 133 firefighters for 108,000 residents, Elgin has fewer fire personnel per capita than many other communities, yet maintains a good Insurance Services Organization rating, which determines insurance rates for residents.
By comparison, he said, Springfield has more than 200 firefighters serving its 116,000 residents.
Fahy added that he hopes to end fiscal 2011 with a $200,000 savings in overtime costs through various efforts the department is making.
Eliminating his department’s overtime, he said, would require drastic measures, including an ambulance brownout, and would affect other aspects of his department’s response to fires and other emergencies.
Glenview implemented an ambulance brownout early this year, reducing the number of units in use at night as a cost-cutting measure, according to a January 2011 story on Glenview Patch.
Fahy added the fire department’s anticipated $1.5 million overtime expense this year is only about 8 percent of the department’s payroll.
In response to a question from Councilman John Prigge, Elgin Corporation Counsel Bill Cogley said Elgin would face no statutory penalty if it were to eliminate overtime. There are, however, issues related to minimum manpower that are subject to contract negotiations and spelled out in the city’s collective bargaining agreements with its unions. Failing to abide by that agreement, he said, likely would draw a union complain of unfair labor practices.
Dunne added that, as far as federal safety standards, OSHA requires that for every two firefighters in a burning building, there have to be two firefighters outside as well.
“Not everyone understands this — the contractual nature on some of this,” Powell said. “There’s also standby pay for after-hours emergencies in Public Works.”
Police Chief Swoboda told the council his department’s overtime budget is $1.8 million, some related to police officers having to go to court during their off-duty hours, for example. But Swoboda noted that his department also seeks a variety of grants that specifically cover other overtime costs associated with enforcement.
Such grants will pay for overtime for special details — such as to set up roadside safety checks, or to conducted stepped up DUI enforcement, putting extra officers on the street for those efforts without pulling officers away from public safety work.
Swoboda also pointed out that the department provides special details to have police officers directing traffic at a couple of local churches, for example, but the department is reimbursed for each officer’s pay.
Lawry said a wide variety of circumstances can cause the Public Works Department to incur overtime costs. Most recently, he pointed to summer storms that downed a lot of branches and the blizzard in February. The federal government reimbursed the city for a large portion of that expense, however, after the area was declared a disaster area as a result of the blizzard. The disaster designation made the city eligible for reimbursement.
Assistant City Manager Rick Kozal pointed out the city has trimmed its overtime costs for the past three years.Elgin OCTAVE, in particular, has been citing the city’s nearly $6 million in overtime costs last year as excessive and extravagant at a time when city revenues have dropped. Leaders of OCTAVE, which formed earlier this year, have said they generally oppose tax increases and news fees imposed by the city. But the group formed specifically to pressure the City Council into rescinding the Elgin business license, which generated about $268,000 this year for the city. The proposed 2012 budget assumes business license revenues will continue, although the City Council has promised to review the issue in January.