OTTAWA POLICE SERVICES BOARD REPORT 16

COMMISSION DE SERVICES POLICIERS D’OTTAWA - RAPPORT 16

TO THE COUNCIL OF THE CITY OF OTTAWA

AU CONSEIL DE LA VILLE D’OTTAWA

25 January 2010

25 Janvier 2010

The POLICE SERVICES BOARD met on 9 December, 17 December and 21 December 2009 and submits the item contained in this Report for the information and/or approval of Council at its meeting of 25 JANUARY 2010.

La COMMISSION DE SERVICES POLICIERS s’est réuni les 9 DECEMBRE, 17 DECEMBRE ET 21 DECEMBRE 2009 et soumet l’article du présent rapport au Conseil pour information et/ou approbation lors de sa réunion du 25 janvier 2010.

Present / Présences :

09 Dec. 09 17 Dec. 09 21 Dec. 09

Chair / président: E. El-Chantiry E. El-Chantiry E. El-Chantiry

Vice Chair / vice-président : J. MacEwen J. MacEwen

Members / Membres : D. Doran D. Doran D. Doran

H. Jensen D. Guilmet-Harris D. Guilmet-Harris

B. Monette H. Jensen H. Jensen

M. McRae B. Monette B. Monette

M. McRae M. McRae

INDEX
	*Police Services Board*		*Commission de Services Policiers*
1.	2010 OPERATING AND CAPITAL BUDGET ACS2009-CCS-PSB-0022	01	BUDGETS D’IMMOBILISATIONS ET DE FONCTIONNEMENT 2010 ACS2009-CCS-PSB-0022

1. OTTAWA POLICE SERVICE 2010 OPERATING AND CAPITAL BUDGET

BUDGETS D’IMMOBILISATIONS ET DE FONCTIONNEMENT 2010 DU SERVICE DE POLICE D’OTTAWA

BOARD RECOMMENDATIONS

That the City of Ottawa Council approve:

1. The Ottawa Police Service 2010 Draft Operating Budget as amended by the $1,000,000 of reduction options tabled on 9 December 2009.

2. The Ottawa Police Service 2010 Draft Capital Budget.

RECOMMANDATION DE LA COMMISSION

Que le Conseil municipal d’Ottawa approuvent :

1. Le budget préliminaire de fonctionnement de 2010 du service de police d’Ottawa tel que modifié par les possibilités de réductions de 1 000 000 $ déposées le 9 décembre 2009;

2. Le budget préliminaire d’immobilisations de 2010 du service de police d’Ottawa.

DOCUMENTATION

1. Ottawa Police Service Budget Book dated 9 December 2009 previously distributed.

2. Extract of Minutes, 9 December and 17 December and Draft Minutes, 21 December 2009 are attached.

1. 2010 DRAFT OPERATING AND CAPITAL BUDGET

Chief’s report dated 9 December 2009

Presentation by the Acting Chief of Police and the Director General

Acting Chief Larochelle was joined by Ms. D. Frazer, Director General; Mr. J. Mui, Executive Director, Corporate Support; and Ms. K. Murphy, Director of Finance, who guided Board members through the 2010 Draft Budget presentation entitled “Delivering on our Commitments to Safety and Security”. (A copy of the presentation is on file with the Board’s Executive Director.) The presentation highlighted the following topics:

· Chief’s Operational Priorities;

· 2010 Draft Operating Budget;

· Options to Meet Council’s $1 Million Budget Reduction Request;

· 2010 Draft Capital Budget.

At the conclusion of the presentation Ms. Fraser thanked her colleagues on Executive Command who gave generously of their time and leadership throughout the Budget development process. She also thanked her team, which included numerous new additions, for the tremendous job they have done with this budget, and Mr. D. Pepper, Director, Community Development and his team.

Chair El-Chantiry thanked staff for their incredible efforts in handling City Council’s request for a $1 million budget reduction. He thanked the Board’s Finance & Audit Committee for their diligent work over the past year. He also commended staff for finding ways to absorb the unanticipated costs associated with the Tamil Demonstration and retirement costs. These two areas account for approximately $3 million in shortfall.

Following the presentation Board members posed numerous questions and the following points of clarification were made:

· The zero-based budgeting concept came about as a result of the City Auditor’s review of the OPS’ budgeting practice three years ago. For the 2009 budget, members of the fleet area were chosen for training in the zero-based budgeting concept. The 2010 budget contains 10 accounts with the largest discretionary spending that were selected for zero-based budgeting. The practice was successful, but very time consuming to start up. Next year zero-based budgeting will be expanded to additional areas.

· At a later stage in the 2010 budget process, certain accounts were frozen at 2009 levels as a means of achieving further reductions. At this time, superintendents are reviewing the information and will provide their views on any impacts they predict will come about as a result of the freeze. Ms. Frazer indicated information on the impact of the reductions would be available for the Board meeting on 21 December.

· Mailing practices associated with Canada Post and miscellaneous courier services involve several processes that were reviewed for efficiencies and cost savings. Staff will continue to implement changes in 2010 and will seek further efficiencies as well.

· The anti-idling efficiency target refers to the new system technology researched and implemented by Sgt. S. McDade that makes the fleet more environmentally responsible and allows vehicle systems to run more efficiently without operating the vehicle engine all the time. Ms. Frazer assured the Board that the initiative would not negatively impact officers working in patrol cars.

· This is the first year the OPS has stockpiled pandemic supplies. The $150,000 reduction in pandemic spending has been deemed an acceptable risk. The relationship between the OPS and its City partners is good and by working together they will ensure that equipment shelf life does not expire and that sufficient supplies are available.

· The deferral of hiring 23 civilian members by one month as one component of meeting Council’s request for $1 million in reductions has been deemed an acceptable risk. Should the hiring be deferred by an addition month, staff would need to determine which of the 23 positions were most important for front line support and hire them first.

· The court time reduction of $100,000 is possible as a result of the work done by Supt. R. Erfle on the Overtime Management Policy, and the support of the team managing it. From an operational perspective, 2009 was a fairly reasonable year, and the reduction matches the activity level. 2010 is expected to be a significant international event year with the Queen’s visit, the North American Leaders Summit, and some activity related to the G8 and G20 events. The Federal Government has the ability to designate these events as extraordinary in which case the costs for policing them would be covered by federal funding.

· Regarding the Capital Reserve Fund and the possibility of applying some of its balance towards the 2010 budget, Mr. Mui indicated he would provide information about options to the Board at the 21 December meeting.

· There are numerous tools that are used to inform the community about safety and address public perceptions of crime such as: the Victimization Survey, which is produced once every five years and includes reported and unreported crime; and the Crime Rate, which contains reported crime only and is largely driven by minor crimes (eg: theft under $5000 and vandalism). The Crime Severity Index, which tracks changes in the severity of police-reported crime, is another tool that takes into account the seriousness of various crimes. Since 9/11 policing has not just had to deal with regular crime, but has taken increased responsibility around general safety and global issues and threats. The National Capital community works with partner agencies to address many global threats and issues and that must be factored in as well. The public’s perception is about feeling safe, and having police officers visible in their communities goes a long way in engendering a feeling of safety.

· Member McRae referenced the South divisional complex being moved up to 2010 and noted she had suggested this in order to take advantage of favourable borrowing rates currently available. She asked staff to comment on the operational requirements that will be addressed by the new South facility. Ms. Frazer responded that for the Government of Canada to continue to stimulate the economy, it has announced that the prime lending rate will be going down to .25% shortly. When the City of Ottawa borrows funds for large capital projects such as the OPS south division complex, it will be at a very low rate because Ottawa is a top grade borrower. When planning large capital projects it is customary to monitor interest rates and to proceed when they are at their lowest, as they are now. It is to the OPS’ advantage to push their capital projects and take advantage of historically low interest rates. She clarified the South division complex has been in the capital budget for almost 10 years, it is not something that the Service has suddenly decided to undertake due to the low interest rates.

From an operational perspective, the South division complex will provide quality service to the south end and surrounding area of the City. It will provide an opportunity to accommodate a number of police sections in one building: emergency operations, a joint communication centre, as well as operations (district and patrol) dispatched from the building. By consolidating these operations in a good geographic location, service can be provided more efficiently and effectively. It also takes advantage of the new Strandherd Bridge being built nearby to allow police quick access to both sides of the river.

Member McRae noted the gross operating budget for the police service was in the range of $125 to $128 million in 2000, while the budget for 2010 is close to $250 million. Ms. Frazer responded that there are two areas contributing to the increase: the Strategic Growth Initiative (SGI), which ensures the Service keeps pace with the City’s growth; and collective bargaining, where increases in the police sector have been above average.

Member McRae noted that the increase in the budget over the past decade is alarming, however, one message that should be conveyed to the community is that the increases are beyond the control of the Board and City Council. She suggested that should further ideas to reduce the Board’s budget come forward during Council’s budget deliberations and be presented to the Board afterwards, she would like to see the Board remain open to considering them. Chair El-Chantiry stated that the Board is open to reduction suggestions throughout the year.

Chair El-Chantiry pointed out that on the second page of the press release prepared for the release of the budget, it says “The tax increase will be 5.0% or $17 dollars for the average urban residence, based on a net tax requirement of $9.4 million.” He suggested that for clarity it should read, “The police tax rate increase will be 5.0% - equivalent to a City tax rate increase of 0.78% - or $17 dollars per year for the average urban residence, based on a net tax requirement of $9.4 million.”

Member Jensen noted that the $2 million a year promised by the Federal Government to the OPS for policing “extraordinary events” must legally go directly to the City of Ottawa and is not reflected in the OPS budget. He stated if that revenue was reflected within the OPS budget the current increase would be greatly reduced. Ms. Frazer concurred with the Member’s comments, confirming the money is contained in the City’s tax rate.

Referring to Appendix E, Member Jensen stated that he strongly supports no fee for police records checks for vulnerable sector volunteers, however, with the numerous types of checks being performed and the varying rates being charged, he asked why a standard fee does not exist. He believed that if the rate was standardized it could be a significant revenue source. Ms Frazer explained that the original fee structure for these fees was based on the work required to perform the various checks. For example, if a request for a check comes from outside Ottawa’s boundary a premium is charged for the service. There are proposals being brought forward to automate records checks, which would modify the process in a significant way. Ms. Frazer indicated that staff would review the fee structure and bring forward recommendations to the Board in the first quarter of 2010. Member Jensen suggested the review include a comparison of fees charged by other comparable sized police services in Ontario.

That the Ottawa Police Services Board receive and table the Ottawa Police 2010 Draft Operating and Capital Budget for consideration and approval at its meeting on 21 December 2009.

RECEIVED AND TABLED

2. 2010 DRAFT OPERATING AND CAPITAL BUDGET

a) 2010 Draft Operating & Capital Budget book previously distributed

b) Presentation

Chief White indicated that the request before the Board was to approve the 2010 Draft Operating and Capital Budget. He is confident that Ottawa residents support the OPS and what they are doing for the community. He introduced Ms. D. Frazer, Director General, and noted that the financial services team brings a lot of experience and challenges to the budget process; he is very impressed by the work they have accomplished and continue to do. (A copy of the presentation will be kept on file with the Board’s Executive Director.)

Chair El-Chantiry thanked staff for the work they performed in fulfilling the challenge of not impacting public services while maintaining budget requirements. He also thanked the Board’s Finance and Audit Committee for all their work in finding budget savings. He drew the Board members’ attention to a letter from Councillor S. Desroches in support of a south end facility.

Chief White noted that discussions about the south division complex began in June with the Finance & Audit Committee and if the OPS is successful over the next few years with the design, development and construction of the building, it will not have to focus on any large capital projects for the next decade.

Member Doran thought that a contingency fund was a useful way to accumulate funds in the face of uncertainty. He asked if there would be an opportunity in the future to reintroduce a contingency fund for unforeseen circumstances. Ms. Frazer agreed with the idea and indicated that the financial framework for the next three to four years is being developed and one of the themes will be Financial Stability; the next logical step for the organization would be to develop funding for unfunded liabilities.

Member McRae agreed that a good capital reserve is necessary and asked if a legislative target for capital reserves existed for police similar to that required by municipalities. Ms. Frazer responded there was no legislative target for police services at this time. Referencing slide 10 of the presentation, Member McRae asked if an additional $400,000 could be transferred from the reserve fund to operating, thereby lowering the overall budget increase to $9 million and reducing the estimated tax rate increase.

Chief White acknowledged the Member’s question, however, he was leery of reducing the reserve fund further. He explained that unexpected occurrences happen in policing and the reserve fund is the closest thing they have to a contingency fund. He believed this budget has been “cut to the quick” and he did not believe this reduction request was a financially sound move.

Member McRae thanked the Chief for his comments, but felt that if $400,000 was cut from the reserve fund and contributed to operations, the money would still be available for any unforeseen expenses. She noted it was not a large balance but it would bring the tax increase down and not affect operations. She would like to focus on the bottom line and she sees this as a way of doing so without impacting the front line.

Chief White respectfully disagreed; he felt it would have an impact as it limits what little flexibility the organization currently has. All it would take to throw off the budget would be to run into something unforeseen with the south end building or find themselves with multiple incidents or special events. Some special events, such as the Queen’s visit, are not funded on a cost recovery basis and that would leave staff looking for additional funds.

Chair El-Chantiry explained that when Mr. B. Plamondon met with staff to review the 2010 Budget, he did not consider the reserve fund as an area where savings could be realized, he actually indicated that contributions to it should be increased. Ms. Frazer explained that if $400,000 in one time funding was added to the operating budget, there are no one time expenses to offset it next year and staff would be in a position of making up the $400,000 at the beginning of the budget process. Chair El-Chantiry indicated that if there was a way to use the $400,000 and replace it later the move would be feasible, however, it would become an issue in 2010 and therefore won’t work.

The following are responses provided by staff to questions asked by Member Monette on the 2010 Budget:

· The $91,900 increase to Cell Phone – Air Time (page 89) includes a range of new services that have been added such as texting and voicemail, as well as upgrades on existing mobile devices. Cell phone usage is usually about airtime and that is how officers communicate with one another. D/C Larochelle added he had requested Blackberries for more officers because the devices enable officers to work more efficiently.

· The $16,000 increase to Dry Cleaning (page 89) is directly related to the number of new staff. The dry cleaning allowance is a specific amount per member and is paid out under the Collective Agreement; staff does not have the ability to make adjustments.

· The $276,700 increase to Professional Services (page 90) includes $135,000 for a dedicated onsite technician for the transition from digital to VOIP communications technology. Also included in this amount is the undertaking of a safety audit and career development initiatives.

· The $130,400 increase to Small Tools & Parts relates to the purchase of approximately 1,000 Glock firearms purchased in 1995 when the police service transitioned from a .38 revolver to a .40 calibre semi automatic weapon. Three key parts (including sights) of these weapons are being replaced. A $150,000 project has been set up to accomplish this; $75,000 is being drawn from one time funding sources and the remainder of the funds are coming from the Small Tools & Parts account.

· Upon retirement unused annual leave is paid out from the Unused Annual Leave account, which consists of approximately six to seven weeks of annual leave per member.

· The Terminal Allowance account consists of accumulated sick leave banks of roughly 130 to 155 days of sick leave per member depending on their former police service.

· The $17 impact to the average urban residence shown on slide 4 of the presentation represents the increase over the 2009 rate.

Referencing slide 10 of the presentation again, Member McRae asked what the impact would be if project funding in the Capital Reserve Fund was reduced to $10.7 million in 2011 and to $10.8 in 2012. Ms. Frazer stated that staff would have to reduce projects contained in the Capital Budget by that amount and the impact would be felt in subsequent budget years; also the 2011 budget would open with a $400,000 shortfall that would have to be addressed.

In order to reduce the overall tax rate, Member McRae indicated that she would move a motion to increase the operations contribution to $2.2 million. She believed that if less money was put into project funding for 2011 and 2012 the budget could be maintained. In 2011 when a new Board is in place, they can look into adding additional money to the reserve fund.

Moved by M. McRae

That the Ottawa Police Services Board increase the contribution to Operations through the Capital Reserve Fund by $400,000 to $2.2 million.

Chair El-Chantiry clarified that the intent of the motion was to reduce the end balance of the reserve fund to $2 million from $2.4 million for 2010, thereby reducing opening balances in future years. Ms. Frazer concurred with the Chair’s summarization. He pointed out that reducing the reserve fund in order to lower the tax rate creates a deferral which will have to be recovered in future budget processes.

Member Doran believed members should realise that the budget numbers are not arbitrarily chosen and cannot be changed on a whim. The numbers are generated by hard data, which in effect result in cost estimates. Although it appears easy to reduce numbers he would be reluctant to reduce them without appropriate analysis. Member Jensen echoed these comments.

Member Monette added that he has heard no reason not to make this reduction and he hasn’t heard any examples of what the major impact would be on operations for this year. He indicated he would be supporting the motion, as it is a move in the right direction.

Deputy Chief S. O’Sullivan identified three projects over the next few years where capital money will be critical: the new South Division facility; an emergency operations co-located communications centre; and radios, handsets and computers. There are also a number of major events that the Ottawa Police Service will be involved with over the next year that will have an impact on the operational budget.

Member McRae assured members that this was not about stroking numbers off the page and coming up with arbitrary ideas. As a member of the Board she believed it was important to take this opportunity to bring the tax rate down.

Board members then considered the following motion:

Moved by M. McRae

That the Ottawa Police Services Board increase the contribution to Operations through the Capital Reserve Fund by $400,000 to $2.2 million.

LOST

YEAS: E. El-Chantiry, M. McRae, B. Monette

NAYS: D. Doran, D. Guilmet-Harris, H. Jensen, J. MacEwen

Chair El-Chantiry asked if there were any members of the public who wished to address the Board regarding the 2010 Budget. There being none, Board members considered the motion before them.

That the Ottawa Police Services Board and the City of Ottawa Council approve:

1. The 2010 Draft Operating Budget as amended by the $1,000,000 of reduction options tabled on 9 December 2009.

2. The 2010 Draft Capital Budget.

CARRIED

Chair El-Chantiry sincerely thanked all those involved with the budget process for all their hard work.