Protecting Citizens and Saving Taxpayer Dollars
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I. EXECUTIVE SUMMARY
The FY 2015 Executive Budget sets aside $674 million to pay settlements and judgments from lawsuits brought against the City of New York. That is more than $80 per New York City resident devoted to claims ranging from falling tree limbs and unfilled potholes, to medical malpractice and civil rights violations. These costs are projected to rise over the next four years to $782 million by FY 2018, a figure that is greater than the FY 2015 budget for the Parks Department, Department of Aging, and New York Public Library combined.
Despite these significant costs to taxpayers and the underlying personal injuries and/or property damage that lead to claims in the first place, New York lags behind other cities in embracing data-driven risk-management techniques that examine the thousands of cases filed against the City every year to identify patterns and improve practices.
Comptroller Stringer is committed to driving down claim costs across all agencies to boost the quality of city services and save taxpayer dollars that can be better spent on everything from public education to public safety.
This report offers an initial snapshot of select City agencies and details the Comptroller’s new, data-driven approach to claims management, dubbed ClaimStat.
ClaimStat is an ongoing initiative that drills down on the thousands of claims that are first reported to the Comptroller’s office to identify patterns and practices that lead to lawsuits against the City. The Comptroller’s Bureau of Law and Adjustment (BLA) will analyze claims data to flag troubling patterns as they occur.
The Comptroller will publish his findings on a periodic basis and will work directly with City agencies and the Law Department to identify potential solutions. The Comptroller will also publicly acknowledge agencies that have taken innovative steps to reduce claims costs by launching ClaimStat “Star” awards.
Several agencies have already taken concrete steps to reduce claims costs. For example, since 2001, the Health and Hospitals Corporation (HHC) has embraced proactive risk and litigation management reforms, including a specialized legal team within the agency that analyzes malpractice cases in order to allow HHC’s medical component to understand and respond to the events that resulted in the lawsuit. In part because of these efforts, HHC has seen claims fall three percent between FY 2008 – 2013, with settlement costs down nearly 14 percent over the same time period. Another likely impetus for HHC’s aggressive risk management is that, unlike other agencies, HHC has been responsible for its own claims costs since 2001.
Other agencies have struggled to contain claims costs. Payments from lawsuits and claims filed against the New York City Police Department (NYPD) rose nearly 31 percent between FY 2008 – 2013 to $137.2 million, while payments as a result of claims against the Parks Department soared 143 percent over the same period.
Just as the NYPD’s groundbreaking “CompStat” program encouraged transparency and accountability among precinct captains, so ClaimStat will incentivize agency heads to take a more analytical approach to claims costs— not only because of their costs to the public, but also because claims often indicate that agencies are failing to serve the public properly.
Several cities across the country have embraced similar data-driven approaches to claims management. In Portland, Oregon, for instance, when the Police Department auditor observed a pattern of claims suggesting that officers did not understand the basis of their authority to enter a home without a warrant, the city attorney’s office made a training video on this issue, and the problem practically disappeared.
In this initial ClaimStat report, the Comptroller’s Office has identified several patterns across City agencies including:
- New York City Police Department: There were over 9,500 claims filed against the Police Department in fiscal year 2013.1 Settlements and judgments against the Police Department in FY 2013 totaled $137.2 million, the highest of any City agency. Further analysis reveals significant disparities in claims between precincts. Even when adjusting for crime rates, certain precincts in the South Bronx and Central Brooklyn have had far more claims filed against their officers than precincts in other parts of the City. A comparison of two precincts highlights this disparity. The 18th Precinct (Manhattan South) had 2271 crime complaints in CY 2013. The 44th Precinct (Bronx) had roughly the same number of crime complaints: 2191. However, for every 100 crime complaints, there were 13 claims filed against officers from the 44th Precinct and only 2 claims filed against officers from the 18th.
- Department of Parks and Recreation: In FY 2010, the City sharply reduced the budget for tree pruning. Following that cut, the number of tree-related claims soared. Even accounting for other factors, including severe weather events, evidence indicates that reductions in the budget for pruning may have contributed to several multi-million dollar settlements, including one settlement that cost more than twice the Parks Department budget for street tree pruning contracts between FY 2010 – 2012.2 After the City Council’s restoration of tree-pruning funding in FY 2013, claims dropped sharply.
- Health and Hospitals Corporation: While HHC has been a bright spot in reducing claims over the past decade, the Comptroller’s hospital-by-hospital analysis of recent data reveals that some facilities are faring better than others. In FY 2013, Woodhull Hospital had more medical malpractice claims filed against it than in any previous year since FY 2009, and Kings County Hospital had the highest number of new medical malpractice claims filed than in any year since FY 2010. On the other hand, FY 2013 had the lowest number of medical malpractice claims filed against Jacobi/Bronx Municipal, Harlem and Lincoln Hospitals since FY 2009.
- Department of Environmental Protection: In recent years, severe weather has underscored the limits of New York City’s sewer system. An analysis of sewer overflow claims from FY 2012 – 2013 reveals that certain neighborhoods are disproportionately affected by flooding. These include Community District 18 in Brooklyn (Bergen Beach, Canarsie, Flatlands, Georgetown, Marine Park, Mill Basin, Mill Island, and Paerdegat Basin), which accounted for 27 percent of all mappable claims, and Community District 2 in Staten Island (Mid Island). Concentration of claims in certain communities (and indeed, certain blocks) could give the Department of Environmental Protection important guidance about how to triage capital investment in sewer upgrades.
- Department of Sanitation: Sanitation is one of many agencies with a considerable fleet of city vehicles that lead to claims costs against taxpayers. Moreover, claims costs represent only part of the cost of motor vehicle accidents to the City. Collateral expenses include Workers’ Compensation (for non-uniformed employees), sick leave for injured employees, settlements with workers who are injured in accidents, and the cost of repair or replacement of the vehicle. To that end, the City should consider a series of steps designed to reduce vehicle-based property damage and personal injury claims. This includes identifying areas where large numbers of accidents occur to determine if roadway conditions can make our streets safer for all. Our report finds that vehicle accidents involving sanitation trucks are most common on Staten Island, with additional areas of concern include East Queens and Borough Park.
This report provides both additional details on the patterns identified above, as well as a description of the recent history of claims costs in New York and how data-driven approaches have helped other cities reduce costs and improve services. Indeed, while not all claims are meritorious, in the aggregate, claims data can act as a leading indicator of potential problems that agencies should work hard to address.
In addition to continuing the Comptroller’s proud tradition of seeking fair, efficient, and effective resolution of meritorious claims, the office’s ClaimStat program will bring a transparent, data-driven approach to risk management.
Tree-related Claims by Community District
Sanitation Vehicle Property Damage Claims
Sanitation Claims by Community District
Sewer Overflow Claims
Sewer Overflow Claims by Community District
* The Comptroller’s Office makes every effort to map claims data exactly as it is received but like any large data set, software limitations can contribute to discrepancies when information is mapped.