May 19, 2019Los Angeles, California
ARRESTING PUBLIC SAFETY COSTS:Ways to Prevent Police Department Personnel
Costs from Taking Over the Budget
May 19-22, 2019 • Los Angeles, California113th Annual Conference
Learn more by visiting us at gfoa.org • #GFOA2019
Pall GudgeirssonCity Manager (retired), City of San Clemente, CA
Walter KatzDirector of Professional Services, Benchmark Analytics
Larry Yium, CPFODirector of Planning & Research (retired), City of Houston, TX
INTRODUCTIONS
• Moderator: Pall Gudgeirsson, City of San Clemente, City Manager/Elected City Treasurer, Retired
• Speaker: Larry Yium, Director of Planning and Research, Retired, Houston Police Department
• Speaker: Walter Katz, Director of Professional Services, Benchmark Analytics
OBJECTIVE
• What is the Finance Departments ‘role’ in supporting Police Departments?• How do we develop opportunities to help each other?• How do we better collaborate between Police & Finance to support each other?• How can we better educate Police Departments regarding financial issues?• What can we as finance officers do to support the critical services provided by
our public safety personnel?
QUIZ #1
• What is average salary of a police/sheriff patrol officer? (Source Bureau of Labor Statistics)
• A $57,710• B $65,400• C $101,000• D $78,300
QUIZ #2
• True/False?
• Lawsuits and liability costs are negligible as compared to police/sheriff benefit costs. T/F
QUIZ #3
• True/False?
• Police management personnel should be encouraged to learn about government finance. T/F
QUIZ #4
• True/False?
• Contracting out police services will always save money and enhance service levels. T/F
Arresting Public Safety CostsWAYS TO PREVENT POLICE DEPARTMENT PERSONNEL COSTS FROM TAKING OVER THE BUDGETLARRY J. YIUMDEPUTY DIRECTOR, HPD (RETIRED)
Topics Covered Today
What Police Chiefs Wish Their Finance Directors Knew
Lessons to Police Supervisors Regarding Fiscal Impacts of Actions
Staffing & Related Fiscal Issues
Environment that ExistsShows About Local Police
9-1-1 Andy Griffith/ Mayberry RFD Blue Bloods Chicago PD COPS CSI: Crime Scene Investigation, CSI Miami The First 48 Hours Hawaii Five O Law and Order, SUV, Criminal Intent Live PD Police Women of Broward County, Cincinnati,
Memphis The Rookie SWAT
Shows About Finance Directors
But Accountants Are Still The “Good
Guys”
“He is most dangerous man in the world. He’s the accountant”-Line from the movie “The Accountant”
How Each Group Thinks About the Other at Budget Time H
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A2019" to 22333. Then text your question(s).
Risk Assessment Matrix
Impact (Consequences)
Frequency
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FOA2019" to 22333.
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High ImpactLow
Frequency
High ImpactHigh
Frequency
Low ImpactLow
Frequency
Low ImpactHigh
Frequency
Risk Mitigation
What Finance Directors Wish Their Police Chiefs Knew (or understood)
There is a bottom line, not a bottomless well of resources
It was the Police that came up with performance management standards, goals, and objectives
Managing resources does not mean you can’t do your job
Public safety is important, but so are other city services
What Police Chiefs Wish Their Finance Directors Knew (or understood)
Local policing is more than crime fighting and directing traffic
Police departments are a para-military organization
Public safety is an investment, not necessarily just a cost
Policing (costs) is impacted by issues beyond the city limits
Technology is not necessarily a force multiplier
Police have a higher standard to meet
Risk Assessment Matrix
Impact (Consequences)
Frequency
Have a question? Text "G
FOA2019" to 22333.
Then text your question(s).
High ImpactLow
Frequency
High ImpactHigh
Frequency
Low ImpactLow
Frequency
Low ImpactHigh
Frequency
Risk Mitigation
Reducing the Risks/Consequences
Catastrophic medical-accidents and equipment
Failure to supervise
Lack of sleep
Off duty activity
Importance of training
Staffing Issues
Personnel costs are often counter intuitive in policing
# of Officers-What are the cities’ goals?
Civilianization is a not a substitute for force reduction
Overtime versus fulltime
Alternatives to increased officer staffing/funding alternatives
Need to take the long term view
Summary Policing costs are expensive-prepared for a possible non-event
Expectations of finance directors and police chiefs
Mitigating fiscal consequences
Expectations of your police department
Staffing levels/ Alternatives
Consider long term implications versus short term gains
Arresting Public Safety Costs — Ways toPrevent Police Department Personnel
Costs from Taking Over the Budget
Walter KatzDirector of Professional Services
Benchmark Analytics
Liability Costs from Police Litigation are Front Page News
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Doing Nothing is an Expensive Option
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Settlements Can Have a Real Impact on a City’s Finances
• Bethlehem, PA sold bonds to satisfy a $7.39 million settlement.
• Hammond, IN issued bonds to as a result of a $4.5 million settlement.
• Chicago, IL issued $225 million through the bond market for anticipated settlements and judgements in 2017.
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Governments Can Pay for Losses and Costs in Three Ways
• Self-insure (common with 100K+ population) – set aside a % of budget for potential losses
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• Self-insure (common with 100K+ population) – set aside a % of budget for potential losses
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Governments Can Pay for Losses and Costs in Three Ways
• Obtain liability insurance in private market.
• Self-insure (common with 100K+ population) – set aside a % of budget for potential losses
• Obtain liability insurance in private market.
• Participate in a risk pool (about 500 pools across the U.S.)
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Governments Can Pay for Losses and Costs in Three Ways
Insurers Can Play a Large Role in a City’s Future
Exercising its authority through identifying and recommending or requiring implementation of risk management
techniques to decrease risk of loss.
An insurer can control for risk in two ways:
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Insurers Can Play a Large Role in a City’s Future
“Agencies that do not comply have lost their insurance coverage and ceased to exist.”
How Governments Pay: Lawsuits, Budgets, Police ReformJoanna C. Schwartz, UCLA Law Review (2016)
Sets rates, deductibles or denies or cancels coverage based on an
entity’s risk.
Exercise its authority through identifying, recommending, or requiring implementation of risk
management techniques.
An insurer can control for risk in two ways:
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Risk Pools Function Similarly to Insurance
• Intergovernmental risk pools look a lot like an insurer
• Members contribute to the pool
• Pool staff or retained experts can provide loss prevention assistance to members
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A Jurisdiction Can Build a Stronger Defense When it Identifies and Reduces High Risk Behavior
Developing a risk management system
Identify and analyze risk • Define risk domain areas, organizational objectives and operational goals
• Identify risks (current and emerging operational risks)
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A Jurisdiction Can Build a Stronger Defense When it Identifies and Reduces High Risk Behavior
Developing a risk management system
Identify and analyze risk
Post-litigation review
• Define risk domain areas, organizational objectives and operational goals
• Identify risks (current and emerging operational risks)
• Conduct root cause analysis of harms in specific cases
• Engage in corrective action planning
Have a question? Text "GFOA2019" to 22333. Then text your question(s).
A Jurisdiction Can Build a Stronger Defense When it Identifies and Reduces High Risk Behavior
Developing a risk management system
Identify and analyze risk
Post-litigation review
Plan organizational response
• Define risk domain areas, organizational objectives and operational goals
• Identify risks (current and emerging operational risks)
• Conduct root cause analysis of harms in specific cases
• Engage in corrective action planning
• Assign department and unit roles and responsibilities
• Establish communication and information sharing between departments and units
Have a question? Text "GFOA2019" to 22333. Then text your question(s).
A Jurisdiction Can Build a Stronger Defense When it Identifies and Reduces High Risk Behavior
Developing a risk management system
Identify and analyze risk
Post-litigation review
Plan organizational response
Execution of control process strategy
• Define risk domain areas, organizational objectives and operational goals
• Identify risks (current and emerging operational risks)
• Conduct root cause analysis of harms in specific cases
• Engage in corrective action planning
• Assign department and unit roles and responsibilities
• Establish communication and information sharing norms between departments and units
• Training
• Early intervention systems (EIS)
• Policy development
• Audit unit
Have a question? Text "GFOA2019" to 22333. Then text your question(s).
A Jurisdiction Can Build a Stronger Defense When it Identifies and Reduces High Risk Behavior
Developing a risk management system
Identify and analyze risk
Post-litigation review
Plan organizational response
Execution of control process strategy
Monitoring
• Define risk domain areas, organizational objectives and operational goals
• Identify risks (current and emerging operational risks)
• Conduct root cause analysis of harms in specific cases
• Engage in corrective action planning
• Assign department and unit roles and responsibilities
• Establish communication and information sharing norms between departments and units
• Training
• Early intervention systems (EIS)
• Policy development
• Audit unit
• Evaluate execution of control process
• Accountability is built in
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Analysis of Risk
• Follow up• Request on-demand
analysis• Clean and collate
inputs from various entities
Real-World Example of a Law Enforcement Risk Management Process
Have a question? Text "GFOA2019" to 22333. Then text your question(s).
Coordinating Informational Inputs
Analysis of Risk
• Follow up• Request on-demand
analysis• Clean and collate
inputs from various entities
• Analyze use of force data• Combine complaint and
lawsuit records with training data
• Use EIS data to identify broad risk factors
• Identify emerging risks• Determine the effectiveness
of implemented recommendations
Real-World Example of a Law Enforcement Risk Management Process
Have a question? Text "GFOA2019" to 22333. Then text your question(s).
Risk Reporting
Regular reporting to:• LEA’s general
counsel• Operational unit
leaders• Law Department• Financial officer
Real-World Example of a Law Enforcement Risk Management Process
• Follow up• Request on-demand
analysis• Clean and collate
inputs from various entities
• Analyze use of force data• Combine complaint and
lawsuit records with training data
• Use EIS data to identify broad risk factors
• Identify emerging risks• Determine the effectiveness
of implemented recommendations
Analysis of Risk Coordinating Informational Inputs
Have a question? Text "GFOA2019" to 22333. Then text your question(s).
Risk Reporting Planning & Proposing Corrective Actions
• Coordinate regular risk review meetings with audit team, general counsel, and operational leaders
• Coordinate regular inter-department risk review meetings
• Take lead in proposing risk exposure corrective measures
• Codify and communicate corrective measures
Real-World Example of a Law Enforcement Risk Management Process
Risk Reporting
Regular reporting to:• LEA’s general
counsel• Operational unit
leaders• Law Department• Financial officer
Coordinating Informational Inputs
• Analyze use of force data• Combine complaint and
lawsuit records with training data
• Use EIS data to identify broad risk factors
• Identify emerging risks• Determine the effectiveness
of implemented recommendations
Analysis of Risk
• Follow up• Request on-demand
analysis• Clean and collate
inputs from various entities
Have a question? Text "GFOA2019" to 22333. Then text your question(s).
Monitor Response
• Regular communication with auditor and operational unit leaders
• Refer non-compliance to LEA leadership
Real-World Example of a Law Enforcement Risk Management Process
Risk Reporting Planning & Proposing Corrective Actions
• Coordinate regular risk review meetings with audit team, general counsel, and operational leaders
• Coordinate regular inter-department risk review meetings
• Take lead in proposing risk exposure corrective measures
• Codify and communicate corrective measures
Risk Reporting
Regular reporting to:• LEA’s general
counsel• Operational unit
leaders• Law Department• Financial officer
Coordinating Informational Inputs
• Analyze use of force data• Combine complaint and
lawsuit records with training data
• Use EIS data to identify broad risk factors
• Identify emerging risks• Determine the effectiveness
of implemented recommendations
Analysis of Risk
• Follow up• Request on-demand
analysis• Clean and collate
inputs from various entities
Have a question? Text "GFOA2019" to 22333. Then text your question(s).