Making New York City More Efficient (Too many duplicate agencies)

New York City's public offices have 8,000 vacant desks, roughly 11% of the workstations in the city government's 19 million square feet of office space. The city has nine separate agencies to handle vehicle maintenance, operating 125 separate maintenance garages, some across the street from each other. Each city agency has its own HR department, with an overall ratio of HR workers to employees 2.5 times higher than is typical in the private sector. Police officers still report their hours worked on an error-prone, paper-based system that involves pairs of officers driving boxes full of paperwork between precincts and One Police Plaza.

These findings and many others are contained in a report from New York's newest Deputy Mayor, Stephen Goldsmith, whom Mayor Michael Bloomberg has tasked with finding efficiency opportunities in the city's operations. Overall, Goldsmith believes that resolving these inefficiencies and others can save the city $500 million over the next four years, all with moves that are close to painless.

Goldsmith, unusually for a Deputy Mayor, is the former elected mayor of Indianapolis. During his mayoralty, Goldsmith pioneered various measures to improve efficiency in government, including the use of competitive bidding where city agencies compete with private contractors to do work for the city. (In the interest of disclosure, Goldsmith has had a longstanding association with my employer, the Manhattan Institute.)

$500 million (or $125 million per year) isn't chump change. And that's probably an underestimate of the available efficiency savings: many wouldn't be implemented until partway through the four-year period, meaning the recurring annual savings would be higher; and some more speculative saving proposals don't have dollar figures attached to them yet.

As with so much in local budgets, New York City’s budget woes largely come back to employee compensation. 58% of New York City’s budget is spent directly on salaries and wages — and the effective figure is higher than that, as some non-compensation costs are subsidies to other government agencies that spend the funds on compensation.

The City faces runaway growth in compensation costs, especially health care and pension benefits, but also wages that are growing faster than the private sector norm. Meanwhile, the Wall Street engine that long fueled outsize growth in city tax revenues remains stalled.

Making the city’s budget sustainable will involve making some hard choices in addition to easy ones like consolidating the city’s human resources apparatus. Fortunately, Goldsmith’s report provides some clues about much larger savings that could be available with some legislative changes.

One is the report’s call for civil service reform. The now-closing “rubber rooms” of the New York City Department of Education — where teachers who can’t legally be fired but are too incompetent to teach have been sent to draw a paycheck while doing nothing — are the most egregious example of an unaccountable workforce.

But in general, city departments labor under rules that make it difficult to manage personnel issues. A relaxation would allow the city to be nimbler and save money. (In New Jersey, Governor Chris Christie also wants to relax civil service rules as part of his “Toolkit” to help municipalities save money.)

"Police officers still report their hours worked on an error-prone, paper-based system"

And I'm sure those errors are usually in the positive for the cops which is why the "error prone" system has never been updated to electronic. If the overwhelming majority of errors was in fact shorting the pay then there would be a major uproar.

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