Police cost analysis

Steve Yurgartis

Presented to the Potsdam Village Board of Trustees

July, 2010

Overview of police department costPrepared by Steve Yurgartis, July 2010

Data from 2009 budget, actual amount spent

Direct police department costs $1,240,057Retirement $147,508Soc. Security $78,569Work comp $13,592Health/dental/pharm $243,000Post employment benefits $297,214Total $2,019,940

Total general fund expenditure $5,427,924

Fraction of police cost to general fund 37%

Conclusion

If the board is serious about controlling the tax rate, it is unavoidable that we must consider police force costs.

Benchmarking our police dept.

• Affect of student population• Per capita cost• Force size• Pay scale

Demographic background information

• We are a “college town” and this has a large effect on our police force costs

• Our census population is 9425• However, the census counts some students,

but not all students• Need an estimate of actual full time village

residents• This was done using census age group data

Estimated population of Village of Potsdam corrected for 4851overcounting of college students

Student population, Clarkson 3045Student population, SUNY Potsdam 4332

Estimated total population of Village of Potsdam 12228

Estimated fraction of students in Village population 60.3%

Our population picture…

Students…

• Are a significant “consumer” of our police services

• Are a source of additional police cost for property tax payers

Estimate college cost to police servicepaid for by property taxes Prepared by Steve Yurgartis, July 2010

Data from 2009 budget, actual amount spent

Direct police department costs $1,240,057Retirement $147,508Soc. Security $78,569Work comp $13,592Health/dental/pharm $243,000Post employment benefits $297,214Total $2,019,940

Chief Kaplan estimateof police service directly attributed to students 50%

Cost to general fund of providing police service to colleges $1,009,970

Fraction of general fund raised in property taxes 52%

Estimated property tax contribution

in general fund to college police service $528,214

Student population, Clarkson 3045Student population, SUNY Potsdam 4332

Cost per student $72

Current per capita cost of our police force

Examples from around NYSCollected by Steve Yurgartis, 11/28/09

Year Village Population Police budget Per capita Rank2008Springville 4252 $472,091 $111 12009Hamburg 10116 $1,349,059 $133 22008Trumansburg 1581 $215,778 $136 32009Cambridge 1925 $263,899 $137 42009Seneca Falls 6861 $1,011,318 $147 52009Brockport 8103 $1,208,939 $149 62008Cooperstown 2032 $354,207 $174 72009Cornwall on Hudson 3058 $569,000 $186 82009Saranac Lake 5041 $1,372,734 $272 92009Ossining 24010 $7,103,387 $296 102009Malverne 8934 $3,285,249 $368 112009East Aurora 6673 $2,615,918 $392 122009Lynbrook 19911 $8,130,198 $408 13

Average $224

2009Potsdam, census 9425 $1,722,726 $183 Potsdam, Full time 4851 $1,722,726 $355

Potsdam, FT+students 12228 $1,722,726 $141

FT + Clarkson 7896 $1,722,726 $218

*Potsdam police budget does not include OPEB

Force size comparison

Potsdam village police force size compared to national data from the Bureau of Justice Statistics

Police force size comparisonPrepared by Steve Yurgartis, 5/13/10

Data, nation-wide* Average number of FT employees Population Total Sworn Civilian 1250 4 3 1 6250 14 12 3 17500 39 31 8 37500 80 63 18 75000 154 119 36 175000 379 284 95*Bureau of Justice Statistics, Local Police Departments, 2003

Model, Potsdam* Average number of FT employees Population Total Sworn CivilianFull time only 4851 10 8 2FT + Clarkson 7896 17 13 4

FT + All students 12228 26 20 6

FT + Half students 8540 18 14 4*Estimated force size to operate Potsdam PD if they were at the national average.

Actual, Potsdam*

Number of FT employees Total Sworn Civilian

18 14 4*May 2008

Conclusion

• The relative size and cost of our force depends on how we define the size of our clientele

• SUNY Potsdam has a full police force• Clarkson has a safety patrol, but no police

powers• Most students reside on campus• The question remains: how do we define the

size of our clientele?

Police salary comparisonPrepared by Steve Yurgartis, 11/27/09

Salary data from Bureau of Justice Statistics, Local Police Departments, 2003For departments serving populations in the range 2500-9999.

Entry officer Sergeant/equiv. Chief

Min Avg Max Min Avg Max Min Avg Max

National data 2003 $29,000 $32,600 $36,200 $37,400 $40,500 $43,600 $48,900 $52,550 $56,200

Projected national data 2007* $32,640 $36,692 $40,743 $42,094 $45,583 $49,072 $55,037 $59,145 $63,254

Potsdam actual 2007 $37,179 $53,529 $70,798

percent difference 1.3% 17.4% 19.7%

*Projected based on 3% annual raises

End of benchmarking

Now let’s look at the future

Cost of post employment benefits

of retired village police officers

Post employment benefits

• Post employment benefits are the benefits (primarily health insurance) that the village must continue paying a person after they retire.

• In short, this is money we are paying to people who no longer work here.

• It is a contractual obligation; there is no way to reduce this cost once it is encumbered.

• It is a recurring annual expense, and is growing.

Current post employment benefit costs for retired Potsdam Village police staff.

Year ending Amount

2007 $234,888

2008 $244,237

2009 $258,758

2010 $297,214

2011 $307,265

Comparison of post employment costs

Post employment cost (2010) $307,265

Fire department $301,678 102% Same

Snow removal $235,273 131% More

Community development $141,009 218% Double

Recreation $193,618 159% One and a half

Street maintenance $360,175 85% About the same

Police department salary $1,112,352 28% About 1/4 of salary cost

Some comparisons to put this cost in context…

The trend… 7% per year on average,Likely to increase

Cost projection

Year Cost

2011 $307,265

2012 $328,774

2013 $351,788

2014 $376,413

2015 $402,762

2016 $430,955

2017 $461,122

2018 $493,400

2019 $527,938

2020 $564,894

2021 $604,437

Estimate of cost to hire a new police officer

•Three scenarios are presented (high, middle, low)•All numbers in net present value

Police officer cost model

Steve Yurgartis 7/9/10

Age at hire 25

Age at retirement 45 Sum of net present value $13,521,815

Age at officer death 85 Post employment net present value $11,428,993

Ratio of post employment to total value 85%

Inflation rate 3.0%

Net Salary Health Social Pension Retirement AARPpresent insurance security health value insurance

$1,070,743 $792,405 $79,770 $149,904 $8,412,179 $3,016,813

Annual rate of Service years To age 65 To deathincrease ----> 3.5% 14.0% 0.0% 0.0% 10.0% 8.0%

High estimate

Police officer cost model

Steve Yurgartis 7/9/10

Age at hire 25

Age at retirement 50 Sum of net present value $7,296,002

Age at officer death 80 Post employment net present value $4,870,994

Ratio of post employment to total value 67%

Inflation rate 3.0%

Net Salary Health Social Pension Retirement AARPpresent insurance security health value insurance

$1,349,034 $786,606 $100,503 $188,865 $4,057,348 $813,645

Annual rate of Service years To age 65 To deathincrease ----> 3.5% 10.0% 0.0% 0.0% 8.0% 6.0%

Middle estimate

Police officer cost model

Steve Yurgartis 7/9/10

Age at hire 25

Age at retirement 55 Sum of net present value $5,637,241

Age at officer death 80 Post employment net present value $2,674,028

Ratio of post employment to total value 47%

Inflation rate 3.0%

Net Salary Health Social Pension Retirement AARPpresent insurance security health value insurance

$1,634,144 $978,545 $121,744 $228,780 $2,347,347 $326,681

Annual rate of Service years To age 65 To deathincrease ----> 3.5% 9.0% 0.0% 0.0% 7.0% 4.0%

Low estimate

Conclusions

1. Hiring an officer encumbers a very large expense on the village

2. Most of the cost occurs after the officer retires (about ½ even in the best case estimate)

3. By hiring an officer, the board places a large cost on future generations of village residents, who will be paying the officer without the benefit of the officer’s services

Alternatives?

• Public safety is vital to the village.• Are there ways to enhance safety without

encumbering large future costs?

Some examples of alternatives we could consider are:

• Strategic placement of security cameras• Better public education (particularly of students and

businesses that sell alcohol)• Increasing fines to discourage bad behavior• A neighborhood watch program• Increasing cooperation with other policing agencies• Other?

Temptation…

As a board, I believe we face a classic temptation for politicians:

The temptation to make a short term decision that will please our constituents, while passing the long term cost on to future generations.

I feel strongly we should resist this temptation, and that we should make the necessary hard decisions.

My recommendation

• Since the cost of hiring officers is so high, particularly in encumbering future residents to pay for services they will not receive…

• Since the timing is right (vacancies by attrition)…

• Since there are alternatives we could try…• Since we are struggling to contain the village

tax rate to preserve the future of the village…

My recommendation

• I recommend a one year moratorium on the hiring of new police officers,

• Experimenting with alternative public safety strategies,

• And based on this experience, re-evaluating the need for more officers after one year.

Some will say: “Yes, it is expensive, but we need these police officers.”

I hope the reasoning does not stop there, because it fails to address the questions of

How are we going to pay for them? Should we continue to make expensive

promises that we expect future residents to pay for?

Some will say: “We have managed to pay for the size of our present force, and we will figure out how to continue to do so.”

Unfortunately I do not think this approach recognizes that we are on a path with rapidly rising costs, as I have shown.

It does not recognize that only a few of our promises have yet come due, and many more are pending.

In short, I do not think we are on a sustainable path.

Difficult recommendation

• I recognize that this recommendation will cause difficulties for the police department.

• I would ask for their patience, cooperation, and good will, as they have shown in the past.

Public safety needs• I too feel public safety is vital to the village.• I am proud of our police department and the work they do.• People will argue, correctly, that we need a sufficient number

of police officers to ensure adequate public safety.• However, I believe we must balance present needs against

future costs.• I believe now is the time to experiment with a small shift in

that balance by having a hiring moratorium for one year.• I urge my colleagues on the board to join me in this

experiment

Thank you

Questions?