Attorney General to Look for ‘Pension Padding’ in Fulton City Employee Overtime Data

by Contributor | July 9, 2010 5:00 am

State Attorney General Andrew Cuomo has the city of Fulton’s public employees in his sights as he widens an investigation into what he calls “pension padding” — the practice of working more overtime in the years right before retirement in order to increase the pension.

Andrew Cuomo announced in Syracuse Thursday that he has asked for public employee payroll information from Fulton, the city of Oneida and the town of Manlius.

99 percent of public employees don’t pad their pensions with overtime, Cuomo said. “This is (about) the bad apple. These are the abusers. But the abusers make it bad for everyone.”

“An egregious case of this is potentially illegal,” he said, adding that if a department gave overtime to a particular employee for the sole purpose of inflating that employee’s pension, “we’ll prosecute that case.”

Cuomo announced the widening[1] of his office’s investigation after a look at 50 local government payrolls across the state turned up what his office said was a pattern of higher overtime for employees in their final years before retirement.

Half of those municipalities showed a pattern of employees who worked some overtime throughout their careers, but worked significantly more overtime in their final years. A minority showed what Cuomo indicated was a more blatant pattern, of employees working no overtime for most of their careers, but working a lot of overtime in their final years.

Cuomo said that workers told him, “the system allows it. I’m just taking advantage of the system. You know what? It’s wrong to take advantage of the system.”

Pensions cost the state and its taxpayers a lot of money. Cuomo said that public employee pensions cost each resident of New York State $486 a year and state taxpayers had to pay $10 billion of the $20 billion cost of pensions in 2008. The rest is covered by the pension investment funds handled by the state Comptroller’s office.

Fulton’s 2010 budget[2] sets aside $371,000 for police department overtime and $330,000 for fire department overtime. The two departments spend, on average, $1,920 a day and $58,000 a month for overtime.

Overtime for many public employees is covered by their contracts with the city. In Fulton, for instance, the firefighters’ union’s contract with the city requires at least 8 firefighters on duty at all times and firefighters work 24 hour days. An illness or injury forces the department to bring in a firefighter on overtime, creating 24 hours of overtime for each day a person fills in for another worker.  Vacations also create the opportunity for significant overtime.

Unions have maintained that it takes a full complement of police officers and firefighters to keep the city safe and the city’s relatively low crime rate and rate of fatal fires shows the benefit. Having two fully-staffed fire stations also keeps down fire insurance rates for homeowners. In the 1990s, fire insurers told city officials that if they closed one fire station, homeowner and business fire insurance rates would rise.

Mayor Ron Woodward has said that the city would like to reform its contracts with its unions in the areas of overtime and, for the fire department, minimum staffing. However, he believes the city is at a disadvantage. He said it’s hard to remove a benefit, once it has been granted, because both sides must agree. If the contract dispute goes on long enough, it can be sent to an arbitrator, where, Woodward has said, the employer is likely to lose.

Cuomo suggested four steps public employers can take to reduce overtime costs and inflated pensions:

• Cap the amount of overtime any employee can receive in a year;
• End the practice of giving out overtime based on seniority;
• Have a single manager or unit make all overtime assignments;
• Add staff, if necessary, to reduce overtime.

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