County trims OT expenses Overtime down 37% compared to four years ago

HILO — Hawaii County spent $8.8 million in overtime in the fiscal year that ended June 30, an average of $2,959 extra for each of the 2,976 positions in county departments under Mayor Billy Kenoi’s administration.

That’s a 37 percent drop from the $14.1 million in overtime paid in the 2007-08 fiscal year under former Mayor Harry Kim, according to a West Hawaii Today analysis of data provided by the county Finance Department. The drop comes even as the county saved about $4 million in monthly employee furloughs.

“Overall, people are working really hard in spite of furloughs to get work done and not have overtime,” said Finance Director Nancy Crawford.

Fire and Police departments, as they have historically, account for most of the overtime costs, with the Fire Department racking up $4 million last fiscal year — an extra $7,742 for each of the 517 positions — and the Police Department accounting for $3 million — an extra $4,171 for each of 720 positions.

The Department of Environmental Management had the next highest overtime, paying out $986,415, followed by Parks and Recreation with $434,673 and Public Works, with $264,655. The other departments had less than $30,000 in overtime.

“It was a directive from year one,” Kenoi said. “We made sure we controlled costs and to do that, we needed to reduce our overtime significantly. It’s a significant savings when you add it up year after year.”

Kim said he held the line on overtime during his first three years as mayor, when the local economy was in a tailspin caused by the closure of the sugar plantations. As the economy improved, overtime began creeping up, especially in public safety areas, he said.

“We put priority on two areas, what is mandated by law and public safety,” Kim said. “If it’s mandated by law, our job is to find the money for it. … Certain departments, agencies that have emergency obligations, Police, Fire, Public Works, overtime is a necessary part of their budget.”

The Fire Department, in fact, last year spent 10.6 percent of its operating budget on overtime. While industry standards are difficult to come by, a 2007 audit by the city of Cincinnati said the national average for police department overtime is 6 percent of its operating budget. That puts the Hawaii County Police Department, with 5.6 percent of its budget going to overtime, about on the mark.

Kenoi defended the Fire Department’s high overtime, saying it is down 20.6 percent over the 2007-08 budget year. He noted several years of dry weather have increased the number of brush fires, and added the Fire Department is the first responder to all kinds of emergencies.

“The fact that they could reduce it by 20 percent shows it took a lot of sacrifices,” Kenoi said.

Andrew Schrage, co-owner of the website Money Crashers Personal Finance, said it’s not cost-efficient to eliminate overtime in government agencies.

“If government agencies maintained full staff levels year-round, only to account for a few months of increased employee vacations, it would cost more than simply paying out overtime,” Schrage told West Hawaii Today.

Does excessively high overtime equate to poor management?

“Poor management can indeed be a reason for high overtime, though it is not necessarily the only reason. Workers with specialized training may be required to work a great amount of overtime,” said Schrage. “The main reason (police and firefighter overtime is higher) is because their jobs are service- and safety-based, so the higher overtime is an added incentive to such stressful positions.”

It’s important to differentiate between planned overtime and discretionary overtime, according to Chris Harvey, government and education industry manager at Chelmsford, Mass.-based Kronos Inc., which sells workforce management software.

“While departments may have funds to secure planned overtime labor, their budgets can suffer from the misuse of discretionary overtime,” Harvey said in a December 2006 article in Government Finance Review. “When an employee calls in sick, many supervisors will ask someone currently at work to stay longer, or call in someone they know can use the overtime. … Even managers with the best intentions for cost control will turn to discretionary overtime if they lack the tools to fill cost-effectively an open shift.”

Council Chairman Dominic Yagong, who has pushed the administration to trim overtime and added transparency to the subject by requiring periodic reports to the County Council, praised county departments for “taking it to heart.” He acknowledged that some overtime is necessary, particularly in the areas of public safety.

“When you have overtime that is excessive, it’s in the best interest of both the departments and the taxpayers to minimize that,” Yagong said. “Sometimes it might be better to have part-time workers or contract workers to minimize overtime and maybe increase productivity.”

DEPARTMENT OT FY 2008 POSITIONS OT/POSITION OT FY 2012 POSITIONS OT/POSITION

Fire $5,039,016 520 $9,690 $4,002,417 517 $7,742

Environmental Mgmt $1,348,854 211 $6,393 $986,415 211 $4,675

Police $5,542,995 720 $7,699 $3,003,073 720 $4,171

Civil Defense $84,479 7 $12,068 $21,572 7 $3,082

Mass Transit $20,725 7 $2,961 $17,847 7 $2,550

Parks & Recreation $496,073 525 $945 $434,673 479 $907

Public Works $931,594 427 $2,182 $264,655 436 $607

Information Technology $25,173 18 $1,398 $7,177 18 $399

Clerk’s Office $73,059 82 $891 $28,880 80 $361

Research & Development $12,599 18 $700 $5,295 18 $294

Liquor Control $13,727 18 $763 $3,141 18 $174

Human Resources $31,685 50 $634 $5,374 50 $107

Planning $80,923 52 $1,556 $4,641 51 $91

Housing $130,190 51 $2,553 $4,583 51 $90

Prosecuting Attorney $38,972 112 $348 $9,116 110 $83

Finance $181,248 138 $1,313 $7,398 139 $53

Aging $352 9 $39 $0 11 $0

Corporation Counsel $348 31 $11 $0 31 $0

Mayor’s Office $508 21 $24 $0 22 $0

TOTAL $14,052,520 3017 $4,658 $8,806,255 2976 $2,959

Source: Hawaii County annual budgets, county Finance Department