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MTA exceeded its budget on overtime by 26%, despite vowing controls

The largest driver of overtime in 2019 was

The largest driver of overtime in 2019 was "programmatic/routine maintenance," which cost the authority $349 million last year, 47% over budget, the MTA said. Credit: Todd Maisel

The MTA busted its overtime budget by 26% last year, despite vowing to address its rocketing costs for extra pay, new figures show.

According to figures released this week by its finance committee, the Metropolitan Transportation Authority spent $1.26 billion in OT in 2019. That amount was about 9% less than overtime paid in 2018, but $261 million over what the agency had budgeted.

At the LIRR, where concerns of excessive OT among senior employees were particularly heightened in 2019, the overtime cost overrun was 6.8%. Railroad officials emphasized that overtime costs fell by 3% compared with the previous year, even as the LIRR took on considerably more infrastructure work.

The largest driver of overtime in 2019 was “programmatic/routine maintenance,” which cost the authority $349 million last year, 47% over budget. The committee, in its report to the MTA Board, attributed much of the cost overruns to increased maintenance demands at the agency’s bus and subway systems. Maintenance-related overtime was lower than expected at the LIRR, the report said.

Overtime at the MTA's other commuter railroad, Metro-North, totaled $99.4 million, or 4.2% over budget. 

Overtime payments totaling $178.4 million for unscheduled service and $128.4 million to cover absentee personnel or fill vacant spots helped drive the authority over its budget, the figures show. 

John Samuelsen, international president of the Transport Workers Union, the MTA's largest labor organization, said the budget overrun signifies vindication for the authority's workforce, following new efforts to target alleged overtime abuse among workers.

"The idea that the overtime controls would reduce the overtime spending was predicated on a belief that there was widespread overtime fraud," said Samuelsen, who believes the high overtime costs reflect growing infrastructure maintenance demands and insufficient staffing levels. "It was a witch hunt and a joke." 

MTA Board member Lawrence Schwartz, who chairs the finance committee and has led calls for overtime reforms, said he was disappointed both that the MTA overtime costs “far exceeded” the budgeted amount and that agency officials did not keep the board apprised of the rising costs throughout the year.

“It’s not a failure of the employees,” said Schwartz, an appointee and close ally of Gov. Andrew M. Cuomo. “This is a failure of management. They know it. Quite frankly, overtime should either go down, or be maintained at the number that we approved in the budget.”

The MTA zeroed in on overtime costs following the release last spring of a payroll report by the Empire Center for Public Policy, an Albany-based conservative think tank that revealed OT costs grew 16% from the previous year.

The Empire Center report also illustrated how excessive overtime significantly padded the pay of the MTA’s top earners, including former LIRR chief measurement operator Thomas Caputo, who made more than $344,000 in overtime, on top of his $117,499 annual salary.

Faced with intensifying scrutiny, and investigations by multiple law enforcement agencies, the MTA last summer hired a consultant to analyze overtime and make recommendations on how to rein in those costs.

In August, the agency adopted those recommendations, including better public reporting requirements. 

MTA chairman Patrick Foye said then: “We can do better and we have to do better.”  

But the new report revealed that overtime costs continued to exceed budgeted amounts for every month in the second half of 2019, according to MTA figures.

"The fact is that that agency overtime was lower in 2019 than the prior year," MTA spokeswoman Meredith Daniels said Wednesday. She added that MTA officials "continue to tackle this issue with key reforms," including by installing biometric time clocks to verify the legitimacy of claimed overtime and by implementing the consultant's recommendations. 

Tim Hoefer, executive director of the Empire Center, said that by continuing to bust its overtime budget, MTA officials “are not showing us that they can manage it in a way that is fiscally prudent." He noted that controlling overtime is especially important, given that it is factored into employees’ pension earnings.

“I think when you see this year over year over year over year, clearly there is a problem that needs to be addressed,” Hoefer said. “So not only are you paying for that overtime immediately, here and now, but the cost of that just goes on in perpetuity, even after those people retire.”

MTA officials noted that, while overtime costs are calculated in the MTA’s operating budget, OT due to capital projects is reimbursed by the authority’s capital budget. And because budget planners can’t be sure of how much capital work will get done in a year, they sometimes underestimate projections for “reimbursable overtime.”

New measures put in place for 2020, including more realistic estimates of capital project work, should help keep overtime costs closer to budget this year, MTA officials said Wednesday. Schwartz also on Tuesday directed the MTA’s financial staff to begin issuing more detailed monthly reports on overtime to the finance committee.

With the new controls, to be led by an “Overtime Task Force Working Group,” the MTA is projecting a significant decrease in overtime costs this year. Its 2020 overtime budget is $896 million — 29% less than it spent last year.

Samuelsen questioned the logic behind the MTA’s math. “Overtime controls can’t reduce overtime," he said, "if the overtime that’s being paid out is necessary.”

MTA OVERTIME

  • 2019 adopted budget: $1.002 billion.
  • 2019 actual overtime costs: $1.264 billion.
  • Budget overrun: 26.1%
  • 2018 actual overtime costs: $1.38 billion.

LIRR OVERTIME

  • 2019 adopted budget: $136.2 million
  • 2019 actual overtime costs: $145.4 million
  • Budget overrun: 6.8%
  • 2018 actual overtime costs: $150.9 million

SOURCE: Metropolitan Transportation Authority

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