As the Philadelphia City Council began grilling the administration this week in the annual ritual of departmental budget hearings, Council members raised concerns about the Kenney administration’s increased spending — 21 percent in four years if the mayor’s fiscal year 2020 budget is approved.
A large part of the growth has been payroll, a result of bargained raises for employees, nearly 1,000 new workers, and a surge in overtime.
“Given that employment levels overall have increased ... why isn’t overtime decreasing at a proportional rate?” Council President Darrell Clarke asked during a budget hearing Monday on the five-year plan.
As Clarke asked that question and others, the administration was in the middle of rolling out a new payroll system that is part of a larger IT project called One Philly to link payroll, pensions, and benefits under one system. The $40 million project is intended to modernize human resources, while helping managers keep better track of employee hours, including overtime.
One Philly, however, is not guaranteed to result in overtime savings. In fact, it could do the opposite.
For uniformity, city officials designed the new system to classify about half the workforce, or 13,400 non-uniform employees, as working 7.5-hour days. Because many of those employees were previously working 8-hour days, the 30-minute reduction in work means some employees will be paid the same salary for less work.
Other workers whose jobs require them to work 8-hour days will be paid more for what will now be considered an extra 30 minutes a day, or a 6.7 percent pay bump. And because workers’ hourly rate will be determined based on the new 7.5-hour workdays, the hourly rate will increase. So, the 11,000 employees who are eligible for overtime will see a 10 percent increase in their time-and-a-half overtime pay rate.
The city, through a spokesperson, declined to say whether it had budgeted for pay bumps or savings associated with the changes or how much that could cost taxpayers.
If overtime were to remain the same as last year’s $179 million, taxpayers would pay $7 million more due to the higher overtime rates. City officials, however, say that overtime is decreasing.
Data presented at this month’s Pennsylvania Intergovernmental Cooperation Authority (PICA) board meeting showed that as of the end of February, the city had spent $119 million in overtime, a $4 million decrease from the same period in fiscal year 2018.
“We’ve put increased focus on making sure we control overtime, and that report actually showed that it’s starting to pay off,” city Finance Director Rob Dubow said Monday in response to Clarke’s question.
One issue with overtime is that it must be offered first to the employees with the most seniority. As The Inquirer reported earlier this month, overtime work by soon-to-be retiring workers results in padded pensions, adding to the long-term costs.
Councilman Allan Domb has raised the city’s overall increase in spending at all three budget hearings so far, including questioning individual departments on their payroll costs.
“Spending is out of control,” he said after one hearing, where he noted that the Kenney administration has increased its budget by four times the rate of inflation, compared with only 2.5 percent during the Nutter years.
Dubow said that since Kenney took office in 2016, pensions and employee benefit costs have gone up by $200 million and long-term investments have been made in education.
Kenney’s chief of staff, Jim Engler, said the Nutter administration was operating in a recession and some departments faced steep budget cuts, which the Kenney administration has been restoring.
The city’s revenue has gone up since then, too — about 17 percent since Kenney’s first budget.
The rollout of One Philly, which could address some of the city’s payroll issues, has been less than smooth, according to some employees and union officials.
“No one knows what’s going on,” said Bob Coyle, president of Local 2187 of District Council 57, which represents about 3,000 city employees. “It’s so chaotic.”
For example, the administration said that recreation center employees will start work 30 minutes later than they used to. So, instead of arriving at a rec center at 1 p.m. to prep for the day’s programming (most start at 3 p.m.), employees will now arrive at 1:30.
As of Monday rec center leaders said they still weren’t sure of their new schedules or when they would start. “It’s still up in the air,” one said.
Library director Siobhan Reardon sent an email last week to staff letting them know they would be working 30 fewer minutes a day and “will be paid the same annual salary.” However, she said, there were still questions about scheduling the security guards, who now work 8-hour shifts.
Sam Spear, labor lawyer for District Council 33, said that the move to the One Philly system has not been “totally smooth” but that they are working through unanticipated challenges, such as employee breaks.
“Important thing is that no one would be paid less," Spear said. "Some people will be paid more — if they are entitled to it.”