The city of Houston is expected to spend twice as much as it budgeted on overtime this year, contributing to next year’s projected $330 million deficit, the city controller’s office said Tuesday.
Overtime costs for Houston police, fire and solid waste departments alone will collectively reach a 10-year high, Deputy City Controller Will Jones told City Council’s budget committee.
The city budgeted $65 million in overtime across all departments this year. The controller’s office now projects the city will spend approximately $137 million on overtime by the end of the fiscal year on June 30.
“There’s nobody that can look at this presentation and not think we better change the way we’re doing things,” said At-Large Councilmember Sallie Alcorn, who chairs the budget committee.
In its report to the council committee, the controller’s office highlighted the police, fire and solid waste departments as the largest contributors to the overtime budget. They regularly have exceeded their overtime budgets for the past decade, and the gaps between budgeted and actual overtime expenses are widening as the departments retain more employees at higher costs, Jones said.
The controller’s overtime projections do not include costs incurred during last year’s derecho and Hurricane Beryl. Those costs will be added if the city is not reimbursed with federal disaster funding, Jones said.
City Council will receive Mayor John Whitmire’s budget proposal for fiscal 2026 in early May, and council members stressed Tuesday they no longer want to allocate millions to overtime pay without addressing why so much is needed.
City departments previously covered part of their overtime costs with money budgeted for jobs that remained unfilled. As the city tries to incentivize the retention of new hires through sign-on bonuses and base-pay increases, the goal is to need less overtime because departments will be adequately staffed, Jones said.
So far, the plan has not had the desired effect.
Among the controller office’s findings:
- Solid Waste employees who have earned overtime this year have averaged an additional $13,000 in pay. The top 10 overtime earners are expected to see their pay increase 90 percent this year.
- The top overtime earners at the Houston Police Department are projected to boost their pay by 120 percent through overtime. Those who have earned overtime this year have increased their pay by an average of $8,000.
- Houston Fire Department employees who have earned overtime have seen their pay increase by an average of $17,000. The top overtime earners are projected to boost their salaries by 230 percent.
As salaries increase, so do hourly overtime rates. Firefighters, for example, received a 10 percent base pay increase this year following approval of a new contract with the firefighters union.
The Houston Police Officers Union currently is in negotiations with the administration over a new contract, which could increase salaries and subsequent overtime costs. Whitmire has said he hopes to make department salaries more competitive with others in the state.
“As we’re in conversations about overtime, there are additional unknowns that we’re currently facing that need to find a way somehow to project for and account for,” District C Councilmember Abbie Kamin said.
Despite higher attrition rates among police and fire, Jones said overtime costs have continued to rise in part because of an increase in the need for their services. He cited higher violent crime rates since the 2020 COVID-19 pandemic and increased calls for fire and rescue.
As budget season looms, council members asked if there were plans in place to cover the additional costs.
“We really can’t just continue to throw more money at it,” District I Councilmember Joaquin Martinez said. “We need to figure out how these departments are running, how they can be more efficient, and then shift over to that aspect.”
Part of the solution could come from an ongoing efficiency study City Council approved last week. Following a February report from Ernst and Young outlining inefficiencies across city government, council approved an extended contract with the firm to develop solutions for cutting city spending.
In response to the report, the city has moved to consolidate some divisions and offered employee buyouts.
“I don’t want to speak on behalf of the administration, but I believe the EY report is the report that we are following to carry us to the future,” Jones said.
The mayor’s spokesperson Mary Benton said Wednesday the administration was monitoring the overtime and attributed it in part to last year’s storms.
“While demands and calls for service increase, the administration will continue to monitor the overtime without eliminating services for Houstonians,” Benton said.
Council members also are awaiting the results of a study of the Solid Waste Department. Houston is the only major city in the country that does not charge a separate fee for trash pick-up.
Garbage collection routinely is one of the most complained-about city services for residents. Proponents of a garbage fee have said it would more robustly fund the department to meet resident needs.
City Controller Chris Hollins announced the office would conduct an audit of overtime practices to identify potential solutions.
““This level of overtime spending represents a significant budget challenge, but identifying the problem is the first step to solving it,” Hollins said in a statement Tuesday. “We’ve conducted our planned audits to enable us to move from conversations about the issue to solutions that help restore stability, strengthen services and build long-term trust in how the city manages taxpayer dollars.”
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