As Houston’s budgeting season commences, overtime costs have emerged as a significant point of contention among city officials.
City Controller Chris Hollins has called on Houston’s leadership to address what he describes as runaway spending, notably within the police, fire, and solid waste departments.
Meanwhile, Mayor John Whitmire contends that Hollins has overlooked essential funding sources in his analysis, leading to rising tensions as city officials grapple with a projected budget shortfall of $330 million coupled with escalating overtime costs.
According to Hollins’ report, the city allocated $65 million for overtime but is on track to spend an estimated $137 million.
“The volume and magnitude of the overages is concerning,” Hollins remarked.
“Equally troubling is the fact that, historically, departments have relied on vacancy savings from unfilled positions to offset the excess.
Plugging the gap with that same approach will be increasingly difficult.”
In contrast, considering all available funding sources, Whitmire’s administration projects the total overtime spending to hit $148.8 million.
Deputy Controller Will Jones pointed out that projections reveal the solid waste, fire, and police departments are expected to exceed their allocated overtime budgets by 75%, 95%, and an alarming 190%, respectively.
Each department is on course to reach unprecedented levels of overtime spending.
The pressure is mounting as solid waste disposal and temporary personnel services have also exceeded their budgets.
Hollins noted that the Houston Police Department (HPD) is also challenged by uncertainty surrounding federal reimbursements for disaster-related overtime and ongoing difficulties in combating violent crime.
Furthermore, federal aid that had previously supported overtime funding—such as that from the American Rescue Plan Act (ARPA) and the CARES Act—has dwindled.
Hollins argued that despite awareness of the elimination of these “one-time funding sources,” city leaders had budgeted less for overtime in the last round of budget approvals in June 2024.
“Simply put, we have to get these numbers under control with such a significant deficit already in play,” he emphasized.
Pushing back, Whitmire expressed disagreement with Hollins’ interpretation of the situation, suggesting that the overtime issues are part of a long-standing challenge rather than a new fiscal crisis.
He accused Hollins of neglecting to acknowledge other sources of overtime funding and criticized him for lacking context.
Whitmire attributed some of the overtime to emergency responses, weekend police surges, and costs associated with two recent storms, describing them as unavoidable drivers of increased spending.
“A political report is not acceptable in March of 25,” Whitmire stated, emphasizing the need for complete information and transparency while asserting that prior administrations had fewer transparent practices.
Whitmire also pointed out that new departmental leadership would aid the city council in improving efficiencies and operational models.
Finance Director Melissa Dubowski acknowledged the increase in general fund spending on overtime but clarified that when considering total spending that includes federal funds and special revenue funds, the overall spending on overtime is not significantly higher than in previous years.
She noted that the city stands to gain $50 million in recurring revenue from METRO to help offset expenditures that the general fund has absorbed.
“It’s misleading to paint a picture that the amount of overtime that’s happening has increased drastically from prior years.
It’s just the funding source is different,” Dubowski explained.
Despite the tense discussions, officials on both sides acknowledge the serious financial challenges facing Houston.
The prospects for balancing the city budget depend on several variables, including payouts associated with ongoing drainage litigation and expected federal cuts to key grants.
Challenging the financial report, Councilmember Edward Pollard questioned the city’s financial practices, stating, “If we knew we didn’t have the same funding sources, why would we continue to approve so much overtime?”
Pollard argued that the city appears to be spending significantly more than it is bringing in, suggesting that the financial trajectory is concerning.
In defense of previous administrations, Councilmember Abbie Kamin noted that each administration faces its own set of challenges, highlighting that current budget discussions are complicated by two revenue caps.
“I don’t think anybody is saying that we should not be funding overtime,” Kamin clarified.
She acknowledged that while the city does not have the same vacancy levels as before, addressing these financial burdens remains a significant responsibility.
The conversation briefly touched on the potential risks related to the tax-exempt status of municipal bonds, a topic currently under consideration in Congress.
Kamin cautioned that if such a change is approved, it could increase Houston’s borrowing costs for capital projects by as much as 30%.
Looking ahead to mitigate the growing overtime burden, Hollins’ office plans to conduct targeted audits across both civilian and uniformed departments.
Hollins stated that these audits will evaluate whether overtime is being utilized appropriately and whether internal controls are in place to limit waste or inefficiencies driving costs.
As per his report, the projected total overage for solid waste is expected to reach $3 million, while HPD’s overage is estimated at $26 million and Houston Fire Department’s (HFD) at “north of” $42 million.
Explaining the aim of the audit, Hollins declared that it would span four years and encompass a review of back pay to ensure compliance and accountability.
“The commitment I will make is to deliver practical, actionable facts so that your decisions can be well-informed, data-driven, and clearly understood by all Houstonians,” Hollins asserted, seeking cooperation from city departments and leadership.
“We need a plan to get this under control, to cover the cost of the services that we provide.”
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