Desire to avoid overtime is not an "operating need" justifying denial of leave

The cba between the Town of Bethlehem NY and the Bethlehem Police Association provides: 

All members [of the bargaining unit] shall receive five (5) personal leave days annually which shall be scheduled within the unit on the length of service by rank and subject to the reasonable operating needs of the Town.

This provision is implemented by the Department's General Order 58 which defines the circumstances for which such leave is appropriate and requires notice of the need for the leave. 

Because of a severe financial hardship, the City sought  to reduce the amount of overtime. As part of this  effort, the Department began to deny requests for personal leave when granting it would require another officer to work overtime to cover the shift. 

The Union grieved this policy as contrary to the cba, and the dispute was submitted to Arbitrator Louis Kash.

Arbitrator Kash sustained the grievance. While recognizing the City's need to reduce overtime, and its ability to more strictly limit personal leave to the circumstances described in the General Order, he concluded that the desire to avoid overtime was not a sufficient basis to deny leave. He distinguished operating needs, which the contract recognized as a basis for denial, from fiscal needs:

Operating needs are not the same thing as fiscal needs. They are related—the Town needs money to fund its operations—but the two should not be confused. The phrase “operating needs” refers to the internal workings of a department; in the Police Department it refers to things such as staffing and scheduling for three shifts, protocols and methods for policing, facilities and equipment for police, and the like. The phrase “fiscal needs” refers to securing, maximizing, prioritizing and allocating financial resources; it refers to things such as budgets and budget lines, reserves, the sale of bonds and bond ratings. Operating needs are managed by line departments, such as the Police Department; fiscal needs are managed by a central staff department, namely, the finance/budget department (or whatever department has that responsibility). Curtailing overtime is a fiscal, not operating, need of the Town.

Timesunion reports on the dispute Arbitrator: Bethlehem violated police contract by denying personal days and reproduces Arbitrator Kash's award here.