San Francisco is on track to spend tens of millions more than anticipated in employee overtime — a dogged situation that has vexed city officials for years.
San Francisco expects to spend $167.4 million on overtime this fiscal year, which is $47 million more than was budgeted. The latest figures show significant increases in overtime costs over the past two fiscal years, which saw San Francisco spend $130 million and $143 million in succession.
As San Francisco faces a $170 million budget shortfall for the next fiscal year, which begins July 1, the overtime spending has received increased scrutiny.
Most of the overages have resulted from extra work done by members of the San Francisco Municipal Transportation Agency and the Fire Department, both of which see overtime as essential to smooth operation.
“As everybody knows, it does cost less to staff through overtime than to staff through hiring on the position,” said Fire Department spokeswoman Mindy Talmadge. “We’re trying to balance it out.”
Talmadge said the department remains within its staff budget, despite the overtime costs. Today, a Board of Supervisors committee will consider re-appropriating money budgeted for Fire Department salaries and fringe benefits to overtime funds instead.
Although San Francisco has put constraints on the amount of overtime employees can work, about 130 Fire Department personnel exceeded their annual limit of 520 overtime hours and 286 employees exceeded a cap requiring them to keep overtime hours below 25 percent of regular hours worked. About 360 SFMTA employees exceeded the 25 percent cap.
SFMTA spokesman Paul Rose likewise said the agency is seeking to find the best balance between the use of overtime and increasing staff.
“It’s the cost-effective way to manage,” Rose said of overtime. “Bottom line, it’s needed to deliver 24-7 service.”
Rose said the SFMTA recently adopted an “implementation strategy” to bring costs down, including an overtime budget that’s more attuned to big events in The City, and charging more to special event organizers whose activities increase the burden on the system. Rose said the number of buses on routes is occasionally decreased to stay within budget means.
“We’re being strategic in which runs not to fill,” Rose said.
Overtime spending is also the subject of a hearing today that was called by Supervisor David Campos, who said the policies are in need of scrutiny, including the consideration that simply hiring more staff could save money in some instances.
“Sometimes you can actually save money by making an investment,” Campos said. “You have to reach a sweet spot. There is a point that overtime might be cheaper, but that may not always be the case.”
Campos said The City also needs to look at the use of “as-needed” employees — seasonal workers who clock fewer hours than full-time employees, but can also opt into The City’s health care system if they meet thresholds.
“For employees that have been as-needed for several years, is it time to make these permanent positions?” Campos said. “It could be the right thing to do for the worker and might be a smarter way.”
$130M: Overtime costs in fiscal year 2009-10
$102M: Original overtime budget for fiscal year 2010-11
$143M: Actual overtime spending for fiscal year 2010-11
$120.2M: Original overtime budget for fiscal year 2011-12
$167.4M: Projected overtime spending for fiscal year 2011-12
Source: Controller’s Office