This report seeks approval to take immediate steps to counter potential year-end budgeted cost overruns in the Department of Public Safety (DPS). Staff has been closely monitoring the Department budget since the end Accounting Period (AP) 5 on November 9, 2002. At that time, indicators emerged that DPS was on track to exceed its budget by fiscal year-end and staff began to meet to consider cost savings strategies. Since then, the projected trend has continued such that, absent corrective action, DPS is on track to end this fiscal year at about 2% over budget. There are two main reasons for this trend: 1) Increased and chronic vacancies have contributed to significant increases in overtime costs in Fire Services (Program 422), and 2) economic conditions and improvements in recruitment methodology have allowed DPS to increase its number of recruits in training.

While a number of cost-savings measures not requiring Council action have already been implemented, these steps have only served to slow the pace of the projected increase, not eliminate it altogether. To fully address the projected cost overruns, staff proposes an action plan based upon service level adjustments for the remainder of this fiscal year. Any potential service level impact to fiscal year 2003/2004 outcomes will be addressed through the cost reduction process implemented through the City Manager’s office. Proposed adjustments for the remainder of this fiscal year include movement of various assigned Public Safety Officers (PSOs) from Traffic Safety, Crime Prevention and Fire Prevention to police and fire line positions, which will result in decreased activity for the remainder of the fiscal year. The fundamental goal is to reduce overtime costs particularly in Fire Operations and the number of instances officers are required to work mandatory overtime. This can be accomplished with a minimum impact on the safety of the community

The overall effect on service levels is difficult to gauge at the Program Outcome Level, mainly because two-thirds of the fiscal year has already passed. It is estimated however, that effects will be minimal (see "Temporary Service Level Adjustments" in the Discussion section of this report).

In addition to the service level adjustments, staff is also proposing to utilize allowable Asset Forfeiture funds in the amount of $587,216 to relieve recruitment expenses for additional Public Safety Officers In Training (PSOITs). During the budget process for FY 2002/2003, it was estimated that DPS would recruit between 30-44 PSOITs during this fiscal year. Due to chronic vacancies and successful recruitment efforts, this estimate will likely increase to 44 – 54.

DPS has formed an ad hoc budget oversight workgroup representing the full spectrum of Department management and association leadership to counter the trend identified earlier in the fiscal year. The workgroup was instrumental in identifying and implementing several action steps that had no bearing on service delivery outcomes. These include work reassignments, leaving selected vacancies unfilled, eliminating overtime for administrative relief in Fire Operations, curtailing training (except mandatory), reducing meetings, and delaying/deferring purchases. The implemented changes should result in savings of approximately $214,000.

Even with these measures in place, a projected year-end budget cost overrun of nearly 2% will likely occur mainly due to: 1) existing staff vacancies and the resulting increase in overtime, exacerbated by accelerated attrition and work related disabilities and, 2) the hiring of additional unbudgeted PSOITs, and 3) unanticipated training.

The primary reason for the cost overage in Fire Services (Program 422) is additional overtime cost. The vacancy rate in Fire Operations has gradually increased from 2 to 16, contributing significantly to budget overages in Program 422, as shifts are filled by overtime. Overtime in Fire Operations is more costly than other DPS programs, due to the pay structure for 24-hour staffing in Fire Operations. Officers working in Fire Operations are paid at the straight time rate of 17.1 hours, while overtime is paid on an hour-by-hour basis for the entire 24-hour period. For this reason, historically, vacancies have been kept to a minimum in Fire Operations by reassigning Police Operations personnel to Fire Operations when long-term vacancies occurred. However, it was clear that the significant amount of mandatory overtime required to keep Patrol Operations staffed at the Memorandum of Understanding (MOU) designated staffing levels was taking a physical and mental toll on the patrol officers. Therefore, Police Operations personnel were not reassigned to Fire Operations when vacancies occurred due to retirement, injury or promotion. As a result, the Fire overtime budget has grown to over 146% of the allocated amount as of Accounting Period 8.

Over the last four years, DPS has averaged more than 17,000 hours per year in reported worker’s compensation. This represents more than 4% of the actual hours worked in any one of the four years. At any given time over the last four years, there has been more than the equivalent of ten Public Safety Officer vacancies due to disability. This is consistent with the senior workforce (aged 50+) that is retiring at an accelerated pace.

Between now and the end of this fiscal year, it is projected that eight (8) additional separations (due to service retirement, disability retirement or resignation) will occur within the Department. Completed training of new recruits is expected to add eight (8) new sworn officers to DPS staffing by end of year. We have seen a greater number of separations in the last three years when compared to prior years. In part, this is based on more attractive retirement packages recently made available to Public Safety Officers. We have experienced an accelerated level of retirement directly impacting our staffing levels because of these retirement packages and the age of the DPS workforce. This increase in separations is expected to continue for at least the next two fiscal years.

During this fiscal year, DPS will continue to recruit, hire, and train PSOITs over and above initial projections, such that an additional 14-23 PSOIT recruits will begin the training process. Original projections estimated our recruitment total to be between 30 and 44 PSOITs in training per week. This estimate has been revised to 44-54. This more aggressive posture for the Department is driven by the pressing need to fill positions in order to alleviate the overtime and chronic understaffing situations. In addition, we need to take advantage of the present economic situation, which is yielding a more qualified pool of candidates. Routine expense increase (i.e., salaries and benefits) and additional expenses have also been incurred as a result of the larger number of qualified candidates.

Asset Forfeiture guidelines provide for relief of supplemental operating expenses for additional positions. A new project utilizing Asset Forfeiture funds in the amount of $587,216 will move available asset forfeiture reserve monies to a recruitment special project for 10 PSOIT positions. Establishing this project will alleviate the operating budget for expense already reported. Cost for each position is based on our current budgeted PSOIT rate of $52.43 for 40 hours per week for 28 weeks per position.

The following proposed changes would result in additional savings projected at $537,281. This amount is limited by the amount of time remaining in the fiscal year. There are only four more accounting periods out of the 13 for FY 2002/03. For this same reason the impact on the program outcome measures will be less than it would have been had the changes been in effect for the entire year. Each proposal is listed with projected cost savings and a statement of impact on service levels.

The revised outcomes and products stated in this report are for activities that support the primary functions of DPS. Historically specialty positions have been left vacant for months at a time for various reasons, including cost considerations. These positions are not subject to the minimum staffing requirements of the MOU. Therefore, it has been convenient to run these units short in order to meet the minimum staffing requirements on patrol. Staffing decisions are made with these and other considerations to balance workload, budget and employee welfare.

The outcomes and activities identified in the RTC, are for

Since the Crime Prevention Unit utilizes Neighborhood Resource Officers (NROs) in providing a positive police presence in the schools and neighborhoods, the Department’s direct interface with students, school officials and neighborhood leaders will be reduced. Interface will take place as a function of Patrol Operations.

Program 412: Police Services

Service Delivery Plan 41201: Crime Prevention

Service Delivery Sub-Plan 4120102: Crime Prevention – Outcome Measure (none affected)

Service Delivery Sub-Plan 4120102: Crime Prevention – Activities

Temporary Staffing Reassignment: Reassignment of three Public Safety Officers in Program 412 from the Traffic Enforcement Unit to Patrol Operations.

Projected Cost Savings: $145,356

The Traffic Enforcement Unit has two outcome measures at the Program level and eight measures at the Service Delivery Plan level. They relate to collision ratios and dollar losses upon which short-term change has little effect. Three areas that could possibly be adversely affected by this move are presented below. These relate to customer satisfaction, the time frame for completing investigations, and traffic stops made. We believe that these will be managed with direct assignments given to Traffic Officers, who would be working Patrol between now and the end of the year.

Program 412: Police Services

Service Delivery Plan 41202: Traffic Safety – Outcome Measures

Service Delivery Plan 41202: Traffic Safety – Activities

Fire Prevention has measures at both the Program level and Service Delivery Plan level that will be impacted. These measures at the Service Delivery Plan level are directly associated with Fire Prevention staffing. Making these changes will only leave one Fire Protection Engineer to perform the functions normally performed by five people (1 Lieutenant and 4 Public Safety Officers). The Fire Protection Engineer is not trained to conduct fire cause investigations. It is anticipated that these measures will be adversely affected by moving all of these PSO positions to the line. It is anticipated that a number of mandatory inspections will be performed on scheduled workdays for personnel previously assigned to Fire Prevention. Limited overtime will also be used to support this activity, but at a reduced level.

In addition, it is probable with this adjustment that Fire Prevention will not be able to complete the Council Study Issue on "Review Fire Sprinkler Requirements for Commercial and Residential Buildings" approved by Council for presentation in 2003.

Program 422: Fire Services

Service Delivery 42203: Fire and Catastrophic Events – Outcomes Measures

Program 422: Fire Services

Service Delivery Plan 42203: Fire and Catastrophic Events

Service Delivery Plan 4220302: Fire and Life Safety – Outcomes Measures

Service Delivery Plan 4220302: Fire and Life Safety – Activities

The most significant change the Department can make in order to end the fiscal year under budget is to reassign personnel to first fill Fire Operations line positions, and second fill Patrol Operation line positions in order to reduce the overtime needed to meet normal staffing levels. The previously implemented changes and proposed changes in this report provide a phased and orderly plan to bring this change about. Total savings for both phases is estimated at $537,281. For every week delay in making these proposed cost saving changes, the lost savings potential is over $35,000. While the focus of these changes is to reduce the current budget deficit in DPS, safety for our own personnel and providing emergency service to the Citizens of Sunnyvale will continue to be our highest priority.

DPS is on track to end this fiscal year at about 2% over budget. We have already implemented cost savings efforts that should amount to approximately $214,000. The proposed service level adjustments totaling $537,281 and utilization of a special project with asset forfeiture funding totaling $587,216 are designed to correct the over budget imbalance. With these proposed changes DPS projects be at within budget at fiscal year end. This special project will require Budget Modification No. 34 as follows:

Staff recommends Alternative #1.