Department faces $3.4 million deficit
An increase in overtime hours and a number of other unforeseen expenses will likely put the Minneapolis Police Department (MPD) more than $3.4 million over its projected budget for this year.
City officials are now working to patch the gap, beginning with the City Council's Nov. 17 decision to allocate $1.1 million from the contingency fund to the MPD. The Police Department has agreed to curtail its spending for the remainder of the year, but Assistant Police Chief Sharon Lubinski said reducing the budget overage to $1.1 million would be an “enormous challenge.” If the money from the contingency fund isn't enough to cover the budget overage, officials will likely have to dip into the city's fund balance to make up the difference.
The issue has upset some members of the City Council - not because the MPD projects it will exceed its budget, but because many councilmembers were unaware of the problem until a little over a month ago. Councilmember Betsy Hodges (13th Ward) brought the issue up at a committee meeting the day before the City Council voted to confirm the appointment of Police Chief Tim Dolan.
Hodges said learning about the issue so late in the year has left policymakers with few options.
“It would have been far more principled to have a proactive response to an upcoming situation than a reactive response to a done deal,” Hodges said.
City Councilmember Paul Ostrow (1st Ward), who chairs the Ways and Means/Budget Committee, said the entire City Council would have likely supported additional funding for the Police Department earlier in the year.
“We all recognize the Police Department was under tremendous stress this year, in terms of the demands in the department and a crime issue that we all agree is critical,” Ostrow said. “We want to make sure that we keep a closer tab on that and have it come to the Council at an earlier point.”
What pushed the MPD over budget?
Lubinski said a number of factors contributed to pushing MPD over budget. A few of the big ones were overtime costs and unforeseen expenses in operating some of the department's new technology, such as a high-tech gunfire detection system called Shot Spotter.
This year's increase in violent crime created a significant need for more overtime. A homicide can require a dozen officers or more to handle the case depending on the circumstances, she said. The city saw 55 homicides by mid-November this year, 12 more than it had by that time last year. Violent crime is up 19 percent over last year, though it has dropped off nearly 20 percent since early 2006.
Lubinski said the department was also caught off guard by some unforeseen costs this year, including technology installation expenses, an investigator grievance settlement and the late settlement of a contract for police officers.
The Police Department is projected to spend $6.5 million more than what is planned in its budget, but $3.1 million in savings in several other areas of the department such as staff salaries, fringe benefits and equipment, reduced the total overage.
While the $3.4 million the MPD projects it will go over budget may seem like a small figure compared to its $116 million budget for 2006, the city's entire contingency fund consisted of $2 million. After reserving $450,000 for any city snow removal needed before the end of the year and allocating $450,000 to the Department of Regulatory Services, the City Council spent the remainder of the contingency fund to bolster the MPD's budget.
Heather Johnston, the city's budget director, said the MPD has generally stayed within its budget in recent years with the exception of 2002, when it had an overage of about $800,000.
“Really, this is the first year that it's been as bad as it is,” Johnston said.
She also pointed out that while the MPD is projected to go over its original budget, it cannot actually spend more than it is appropriated by the City Council.
The city's Finance Department meets with the MPD every two weeks and reports to the Council on a quarterly basis, Johnston said. The second quarter financial report the Finance Department presented to the City Council in August did note that the MPD's “projected expenditures could exceed their budget by about $1.8 million at the end of the year primarily because of increased overtime expenditures for Downtown Safe Zone acticitivies/presence.” Since then, Johnston said the MPD settled a contract with its employees and incurred unforeseen overtime costs that will likely put the department over its budget by even more than that projected amount.
The MPD's coverage will not roll into next year and Lubinski said the department has learned enough from this year's debt to avoid future problems.
“We need to start day one of ‘07 with constant vigilance,” she said.
Working to curb the problem
One strategy the MPD is using to hold down the current budget overrun as much as it can is to limit overtime for the remainder of the year. Overtime will only be allowed when it is crucially needed, Lubinski said, but it can't be eliminated.
“We can't simply say to the precincts that there is no overtime for officers,” she said. “If we cut it out, it would start to impact public safety.”
Capt. Stacy Altonen of the department's administrative services division said the department has also frozen funding for training programs, unless they are critical. The department will not purchase any more new equipment or technology this year, either.
Hodges wants to see policies and procedures put in place that will prevent another situation where the City Council finds out late in the year that a department will likely be over budget.She also would like to see the administrative assistant Mayor R.T. Rybak has proposed adding to the police department work on making sure the department stays within its budget.
“This is not something that I want to have happen again, and we made that clear to the department,” Hodges said.
Kari VanDerVeen can be reached at 436-4373 and Jake Weyer can be reached at 436-4367.