BREAKING: Scathing Audit Criticizes Maui Fire Dept Premium/Overtime Pay

A new audit focused on premium and overtime pay at the Maui Department of Fire and Public Safety reveals that if costs are not controlled soon, taxpayers will be forced to answer.

Maui Now graphic. PC: File image: PC: ‎Sara Riley‎ (8.11.17)

The audit, which was conducted between December 2016 and August 2017, concluded the implementation of the Rank-for-Rank Recall program was the cause of the rapid acceleration in overtime costs between FY 2014 and FY 2015.

According to the audit, since its inception in Fiscal Year 2015, Rank-for-Rank Recall has resulted in an increase of 60%–or $1.4 million–in overtime pay “without a notable increase in emergency incidents, staffing levels, or absences.”

The report states that the program simultaneously restricted the career paths and overtime opportunities to Fire Fighter I employees.

The audit warned that if not effectively managed, premium and overtime pay could lead to excessive costs, employee burnout, and low morale.

Audit Criticizes Rank-for-Rank Recall Program

On July 1, 2014, the department implemented a Rank-for-Rank Recall program that reportedly resulted in a 50% increase in Premium Pay/Overtime Pay and the Maui Fire Department having the highest amount of Premium Pay/Overtime Pay per employee in the County.

The audit found that under the program, automatic overtime was issued for ranked fire fighters any time an equally ranked fire fighter was absent.  The report states that the program also resulted in reduced opportunities for additional cross-training.

According to the audit, there was three times more time-and-a-half overtime pay for Fire Fighter III’s and five times more for Fire Captains while time-and-a-half overtime pay for less costly lower-ranked Fire Fighter I’s actually declined.

“Rank-for-Rank Recall drastically reduced MFD’s ability to temporarily assign qualified lower-ranked fire fighters to fill absences,” the audit stated.  “As a result, MFD now fills absences of ranked fire fighters by calling in an equally ranked fire fighter at more costly time-and-a-half overtime even though qualified lower-ranked fire fighters (who are already on-shift) are available.”

The Office of the County Auditor solicited comments from MFD management, which provided responses on the draft findings but did not respond to the draft report.

In the absence of a response to the final draft audit report, the Office of the County Auditor published this audit report and included MFD management’s responses to the initial draft audit findings transmitted on Oct. 4, 2017.

In their response to the draft findings, management expressed concerns regarding the auditor’s
staffing recommendations.

The audit states that, “It is unfortunate that Management submitted pages of criticism of our audit findings and recommendations, but did not address how they plan to deal with skyrocketing Premium Pay/Overtime costs. Their commitment to the status quo is disappointing, taxpayers deserve better.”

“To be clear, we believe controlling Overtime Pay is the responsibility of Management within the MFD,
not the individual fire fighters who are simply following orders,” the report stated.

Premium Pay Balloons 41% in 4 Years

In FY 2011, the County’s total Premium Pay was $10,698,946.  By FY 2015, the audit states that it had ballooned to $15,083,850, an increase of approximately 41%. The majority of the increase‐‐65%
or $2,862,448–occurred between FY 2014 and FY 2015.

The audit analyzed the FY 2015 Premium Pay costs for each County department and found that that departmental Premium Pay ranged from a low of $1,605 at the Office of the Mayor, to a high of
$5,860,188 at the Department of Police.

Of the County’s 20 departments, the Department of Police and MFD comprised over 67% or $10,087,371 of the County’s total Premium Pay, according to the document.

Although the Department of Police had the highest amount of Premium Pay, the increase was only 17% in FY 2015, compared to a 50% increase over the same period at the Fire department.  MFD also had the highest amount of Premium Pay paid per employee, averaging $13,293 each, according to the report.

Cause of Premium/Overtime Investigated:

The audit found no significant increase in the number of sick hours or vacation time from FY 2011 through FY 2015, and concluded that the factors were not the cause for the increase in overtime.  The audit also found that absence due to the Family Medical Leave Act, which was initiated in FY2013 increased, but was not significant enough to be the cause of the increased overtime.

Workers’ compensation hours also experienced a slight increase in FY2015, but it too, was also not significant enough to be the cause for the increased overtime, according to the audit.

The audit stated that the rapid acceleration in overtime was thought to be due to increased fire-related incidents; However, while the number of fire-related incidents increased, the total number of incidents
dropped. According to the audit, the fire-related incidents only accounted for 7% of all incidents handled by MFD. In that period, 63% of calls were EMS calls and other/medical-related incidents.

Audit: “Robbing Peter to Pay Paul”
Time-and-a-Half Overtime Costs more than Double in FY 2015

Rank-for-Rank Recall is a condition in the Collective Bargaining Agreement with the Hawaiʻi Fire Fighters Association – IAFF Local 1463 that took effect on July 1, 2014 (FY 2015).  When there is a need to recall a ranked fire fighter due to an absence, Rank‐for‐Rank Recall stipulates that an equally ranked fire fighter be recalled to fill that absence. For example, only a Fire Fighter III can be recalled to cover the absence of a Fire Fighter III. This recall results in time-and-a-half overtime.

The audit states that the MFD’s Rank-for-Rank Recall program favored higher-ranked fire fighters. Under the program, time-and-a-half overtime pay for more costly Fire Captain and Fire Fighter III more than tripled, while time-and-a-half overtime pay for less costly lower‐ranked Fire Fighter I actually declined.

Prior to the implementation of the Rank-for-Rank Recall program, department absences of ranked fire fighters were filled through Temporary Assignment, which allows a qualified lower-ranked fire fighter to cover the absence of a higher-ranked employee.

“Not only was utilizing TA to cover absences less costly, it also provides lower-ranked fire fighters an opportunity to gain valuable hands-on experience working as a higher‐ranked fire fighter. Those opportunities inherently improve MFD’s operational flexibility,” the audit stated.

The audit further stated: “The implementation of Rank-for-Rank Recall took TA hours away from Fire Fighter I and gave overtime hours to higher-ranked fire fighters. Essentially, Rank-for-Rank Recall robbed Peter to pay Paul.”

Audit Recommendations:

The audit recommend that the Maui Fire Department reorganize its existing staff by adjusting the mix of fire fighters in each Platoon (shift) to more closely match their historical absences for sick and vacation leave. The audit states that the staffing reorganization would involve the creation of a Relief Pool to provide a “proper mix of staff, excess capacity, and enable the Fire Chief to assign and place
appropriately ranked fire fighters who are already on shift to fill absences at less costly straight time instead of time-and-a-half overtime.”

The audit claims that if properly executed and managed, the Relief Pool could achieve Premium Pay/Overtime Pay savings to the County of approximately $1.9 million to $3.2 million per year.

The report also found that the costs associated with the Rank-for-Rank Recall program are not tracked
in the County’s payroll system “and are, therefore, dependent on external manual data entry and calculations.”

The audit recommend creating a paycode category within the County’s payroll system to separately track and report Rank-for-Rank Recall costs.