***The department already has 500 semiautomatic AR-15 rifles, which were converted from fully automatic rifles,***
I thought law enforcement was exempt from all the hoops we have to jump through.
They are. For example you could no have a semi-auto converted from full auto, unless "converted" means a new receiver and certain new internal parts as well. In their case it's probably less involved than that. But you are correct, they could have full auto or 3 round burst if they wanted them.
But the prime reason they don't want them is likely that the powers that be in and over the NYPD don't trust their run of the mill patrol officers with full auto, and probably with good reason in many cases.