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6 Table of Contents OTTAWA POLICE SERVICE 214 Draft STAFF REPORT: 214 DRAFT OPERATING AND CAPITAL BUDGETS Tabling of Estimates 23 October RAPPORT : PROJET DE BUDGET DE FONCTIONNEMENT ET D IMMOBILISATIONS 213 Présentation des Estimations le 23 octobre ANNEXES Annex A-1: OPS 214 to 217 Operating Forecast Annex A-2: OPS 214 Staff Complement Summary by Section... 5 Annex A-3.: OPS 213/214 Staff Complement Summary by Rank Annex A-3.1: OPS Summary of Civilian Complement by Pay Group Annex A-3.2: OPS Summary of Sworn Complement by Rank & Category Annex A-4: OPS 214 Material, Supplies & Services Annex A-5: OPS 214 Former Capital Projects Transferred to Operating Annex A-6: OPS 214 Business Plan... 6 Annex A-7: OPS 214 Project Funds Annex A-8: OPS 214 Service Initiative and Efficiencies - $3.7M Annex A-9: OPS 214 Recommended Fee Schedule Annex A-1: OPS Revenue Comparison 213 vs Annex A-11: OPS Community Police Centres Net By Centre Annex A-12: OPS History of Gross and Net Expenditure Annex A-13: OPS Review Solutions - $2.8M DRAFT OPERATING ESTIMATES - CITY VERSION Operating Resource Requirement and Analysis - Total Service Operating Resource Requirement and Analysis - By Directorate DRAFT OPERATING ESTIMATES BY EXPENDITURE TYPE Department Summary Branch Summary Program Summary DRAFT CAPITAL ESTIMATES Annex B-1: OPS Capital Works in Progress Annex B-2: 214 to 223 Capital Forecast Annex B-3: 214 Capital and Operating Project Details Annex B-4: 214 to 223 Continuity Schedules

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8 REPORT RAPPORT DATE: 23 October 213 TO: FROM: Chair and Members of the Ottawa Police Services Board Chief of Police, Ottawa Police Service SUBJECT: 214 DRAFT OPERATING AND CAPITAL BUDGETS RECOMMENDATIONS That the Ottawa Police Services Board receive and table the Ottawa Police Service 214 Draft Operating and Capital s, to be considered at the Board meeting on November 25, 213. BACKGROUND At its meeting on 24 June 213, the Board directed staff to prepare the 214 Draft Operating and Capital s so as to achieve a tax rate increase of less than 2.%. Staff have followed the Board s direction. The 214 Draft Operating and Capital s represent a 1.99% Police Tax Rate increase. With respect to the forecast period, the OPS Operating Forecast for 215, 216 and 217 being tabled with the Board reflects a 2.5% tax rate increase. DISCUSSION The Ottawa Police Service (OPS) provides policing services to the residents, businesses and visitors to the City of Ottawa as outlined in the Ontario Police Services Act. The demands for these services are driven by the needs of people in our community. To ensure funding is in place to meet community service demands, Section 39 of the Police Services Act requires the Board to approve annual budget allocations to provide the funding to maintain the Police Service and provide it with equipment and facilities. In conjunction with the OPS Business Plan and other strategic planning documents, the annual budget enables the Board to set its priorities and provide direction to management. It supports service levels, provides the authority to proceed with key operational projects, and confirms the necessary funding to carry out the 214 operational plans. In 26 City Council implemented a policy to fund the operations of the Ottawa Police Service through a separate municipal Police tax rate that is distinct from citywide operations. This 1

9 funding model provides transparency to the public about the cost of police services, and provides the OPS with the direct benefit of a proportional share of City assessment growth revenue. Policing Context Policing everywhere in Canada continues to face the challenge of operating in an environment of changing crime types and levels, while at the same time responding to the public safety needs of changing and growing communities. Financial constraints are also a factor in most jurisdictions. To successfully manage this environment, strong planning approaches are needed based upon operational, financial and strategic frameworks. Ottawa also faces a unique challenge in Canadian municipal policing. As the nation s capital, the Ottawa Police Service is responsible for public safety and security at almost 1,3 events annually, including parades, marches, strikes, demonstrations and special events. These events require the development and implementation of police operational plans supported by co-ordinated intelligence gathering, threat assessments, and public safety strategies. Ottawa s size and geography pose additional challenges for the Ottawa Police Service. The City of Ottawa covers 2,796 square kilometres and spans 9 kilometres from east to west. This area is greater than Toronto, Montreal, Calgary, Edmonton and Vancouver combined. Furthermore, the area is almost 8% rural, with more farmland than any other city in Canada. This diversity creates the need for differential police service models tailored to urban, suburban and rural needs supported by specialized equipment often resulting in increased vehicle costs. Ottawa is a growing and changing community. The population grew by 14, people from 29 to 21, according to Statistics Canada figures. It has also become significantly more diverse. A recent census by the Ottawa Public School Board showed that roughly half of their students speak neither English nor French at home. Providing service to such a growing and changing community poses additional challenges for OPS. The total crime rate in Ottawa mirrors the national downward trend. Total criminal code offences are dropping, while violent youth crimes, drug-related violence and gang activity continue to rise. Overall safety has increased, but fear of crime is still prevalent as the vulnerable sectors of our society are susceptible to more frequent and more violent crimes. Reducing, investigating and preventing crime remain core operational priorities for 214. The OPS will continue to face changes in crime types, a growingly complex legislative environment, fluctuating levels of planned and unplanned events and unforeseen issues. An environment characterized by all of these needs must be balanced within a defined budget envelope which can be very challenging in years when unplanned events reach peak levels. Stable financing facilitates the effective management of police operations and also services needs associated with a growing and diverse city s population. 2

10 Canadian Police Staffing Comparisons The most recent data published by Statistics Canada shows that Ottawa Police staffing levels fall within the mid-range of the twelve larger urban centres in Canada. Table 1 presents data for the twelve comparator police services, along with Gatineau. As shown in Table 1, there are 485 residents for every police member (sworn and civilian) in Ottawa; the same statistic for 211 shows that there were 477 residents for every police officer. Population growth, combined with the static size of the police service, has produced this result. Table 1 Population per Police Member Service 211 Stats Can Population Police Officers Other Personnel Actual Strength 212 Total Police Members Population per Police member Toronto 2,743,738 5,568 2,812 8, Montreal 1,969,242 4,48 1,256 5, Winnipeg 691,778 1, , Vancouver 669,867 1, , Edmonton 844,474 1, , Calgary 1,159,446 1, , Peel 1,298,95 1, , Ottawa 99,862 1, , Gatineau 261, Hamilton 54, , Waterloo 53, , Durham 631, , York 1,69,49 1, , Source: Police Resources in Canada 212, Statistics Canada Canadian Police Cost Comparisons Per capita costs are no longer published by Statistics Canada, which states that: Due to the different ways that individual police services report expenditure information, comparisons at the municipal level are problematic. Strategic and Operational Priorities for 214 The strategic and operational priorities for 214 are key inputs to the budget development process. The OPS is committed to safeguarding the safety and security of the community it serves through the continuation of successful enforcement activities, proactive crime prevention, education and partnerships. This is largely done by ensuring the efficient deployment of front-line policing resources. 3

11 The Chief has set three operational priorities to target areas of concern to the OPS. These are the broad issues of: 1) guns and gangs; 2) violence against women; and 3) traffic safety. These key areas have been identified as requiring increased operational focus in 214 in order to ensure that the OPS is best addressing community needs, has adopted best practises in these areas and is targeting resources on areas of high public concern. There is an envelope of money available for initiatives that support the three operational priorities contained in the Business Plan Along with these three operational priorities, there is an overall approach to operations that everyone matters. This approach applies to internal membership and the service to the overall community. Following consultations with a broad audience including the Board members and the community, four strategic priorities form the basis of the Business Plan. Community: Engaging and Investing in our Partnerships Reduce and prevent crime through community collaboration / partnerships, community engagement and awareness. Members: Engaging and Investing in our People Promote, foster and support organizational engagement, ethics and professionalism in everyday interactions Service: Delivering Quality Service in Operations Review, identify and implement service improvements and efficiencies that allow the organization to reinvest in service to citizens and meet our policing responsibilities. Value: Delivering Strong Performance and Social Value Protect the safety, security and quality of life for residents by delivering policing services that demonstrate positive impact and value to the community through quality service, enhanced performance and accountability. Directorates are expected to consider these priorities when managing their budgets and activities. Service Initiative The OPS launched the Service Initiative to ensure that it is positioned to succeed in an increasingly complex policing environment with challenges related to rising expectations, new legislation and constrained resources. Informed through documentation review, consultations, and analysis, the first phase of the project consisted of a current state assessment focusing on our Call to Close framework. The Call to Close framework refers to the processes involved from the time a call is received from a member of the public, until the time it is concluded. These processes were examined from several perspectives with an emphasis on the services the OPS is providing to the public including the perspective of the complainant or the victim. It focused on the identification of gaps, redundancies, and opportunities for improvement. 4

12 Within the Call to Close framework, four core processes were identified as key components to a police response: Call for Service, Incident Management, Detention and Disclosure, and Proactive Activities. Call for Service takes into account how the OPS takes in and receives calls for service, with a focus on four main intake areas: the Communications Centre, the Call Centre, Front Desk Services, and Community Police Centres. These areas are responsible for assessing the call for service, choosing the appropriate service for a response (e.g. police, fire, ambulance, bylaw, etc), and if required, deploying resources. Incident Management is the area that is responsible for a large amount of resources in the OPS. It involves scene attendance by officers, assessment of the call, report generation, management of the investigation, and arrest, if required. Detention and Disclosure looks at the time a person is in custody, through to the completion of the court process. It encompasses both the movement of people and information through OPS and court systems. And finally Proactive Activities account for the work the Service does proactively, such as intelligence gathering and crime prevention. The potential in this area is effectively managed, and targeted activities can result in a reduction in the need for reactive calls for service. For example, it has been recognized that some addresses can receive a high number of calls for service from all emergency services. By focusing proactive resources (including other community safety and social service partners), the OPS has had success in decreasing calls for service at these locations. By examining each of the core processes, we identified the different touch points a call for service may come across. This assisted the Service in seeing the areas of overlap and duplication as a call moves through the different processes, as well as helped to identify areas that we can provide better service to the public. The current state assessment as a whole offered a baseline for transformation at the OPS by helping to highlight opportunities that allow the organization to reinvest in service to citizens and meet its policing responsibilities in an era of constrained budgets. The opportunities identified through the review are in the process of being prioritized for implementation. The prioritization will be based on several criteria including the potential for service improvement, efficiency savings, and overall effectiveness. Implementation will be carried out across the Directorates and is anticipated to begin in 214, following the development of business cases and work plans. These projects will help to support three, large-scale, organizational projects that have been approved for development that are targeted to be implemented starting in 215. The Organizational Projects are aimed at bringing about fundamental change to the OPS and allowing the organization to deliver on the goals of the SI to focus on policing responsibilities, provide enhanced service, and develop a sustainable policing model. 5

13 The projects are: Service Delivery Model (to be championed by Deputy Chief Ed Keeley) this will entail an examination of how we respond to our calls for service from beginning to end. It will look at how we can better manage the demand from the time the call is received in our dispatch or call centre to ensure the most appropriate resources respond to the call (OPS or otherwise). It will also look at how we align our resources to optimize the service we provide and match our drivers of demand (victimization, repeat offenders, problem addresses, time of day). Evidence Based Service Delivery (to be championed by Deputy Chief Jill Skinner) this will entail the development of systems that will drive both operations (e.g. victimization, repeat offenders, problem addresses, time of day) and the organization (e.g. HR information: time off, staffing levels, sick leave and financial information: budget spending, equipment, fleet). Performance Measurement Framework (to be championed by Director General Debra Frazer) this will entail the development of systems within the organization that provide measures and benchmarks of our progress towards what we have set out to achieve at all levels (e.g. at the member, team, unit, section, directorate and organizational level). The projects identified through the SI will make a major contribution towards OPS efforts to adhere to the annual efficiency targets of a minimum of $1. million for 215, 216 and 217. The SI will therefore continue to play a critical role in the current era of constrained budgets. We will update the Board in the first quarter on the progress of the projects being launched through the SI. 214 Development Process OPS began the 214 budget process in late April at a meeting held with the Finance and Audit Committee on 25 April 213 to discuss the budget direction of a 2.5% tax rate increase. At this point staff was addressing a $1. million efficiency target. Based on new information from the City, the Board issued a Notice of Motion at its regular meeting held on 27 May 213, directing staff to develop the 214 Draft Operating budget to result in a recommended tax increase of less than 2%. As a result, an additional $2.6 million in efficiencies would be required in order to meet the target. Staff met with the Board s Finance and Audit Committee again on 11 June 213 to discuss budget strategies and possible solutions to achieve the total of $3.7 million of efficiencies. During this period, budget preparation material was circulated to all OPS directorates. Representatives from the Finance Section met with their contacts throughout May and June to support the preparation of the preliminary budget estimates. 6

14 At its regular meeting held on 24 June 213, the Board approved a motion directing staff to prepare the 214 Draft Operating in accordance with a less than 2% tax rate increase. At the same meeting, the Board also approved the adoption of the City s Timetable. The Police Services Act requires that the Police Service comply with the process established by the municipal council. The $3.7 million in savings and efficiencies needed to achieve the 1.99% budget target has been realized through a variety of strategies. A comprehensive list is included in Annex A-8. The highlights include: Compensation provisions have been adjusted to reflect the prevailing labour environment - $1.2 million. The gapping provision for civilian employees has been increased to 3.3% - $.3 million. A full year of revenue for motor vehicle collision reports at higher sales and cost recovery levels has been budgeted - $.8 million. All contracts with external agencies have been adjusted to reflect prevailing salary levels $.6 million. Directorate budgets have been reduced - $.4 million. Other efficiencies and contract reductions have been realized - $.4 million. Finance staff met with each directorate in early September to review their draft budget submissions. All of the agreed-to $3.7 million of solutions and efficiencies had been incorporated. However, a further $2.8 million of operating needs and requirements had been identified by the directorates and tabled in their submissions. The goal of the Executive review was to resolve the final $2.8 million budget pressure and close off the exercise. During the last two weeks of September the Deputy Chiefs and Director General met as a group to review the requests from each directorate. Recommendations for solutions of $2.8 million were made to the Chief at the end of September to finalize the draft budget. The list of solutions is outlined in Annex A-13 and includes: Freezing overtime, training, casual employee budgets - $.5 million. Phasing in the increases for the budget base for indemnification costs $.2 million. Cost sharing the Real You Program with candidates -$.1 million Reducing the capital envelope - $.6 million. Denying equipment requests $.3 million. Reducing various funding envelopes - $.6 million Applying capital project funding - $.5 million. The Finance and Audit Committee and the Board were updated by staff during the fall review process. Staff met with the Committee on the 17 September and 7 October 213 to provide progress reports and seek direction. An update report was tabled with the Board at the meeting on 23 September

15 213 Financial Status The quarterly financial status review has highlighted the pressure the Service is facing with regard to indemnification and liability costs. It is significant enough for staff to increase the budget base in 214 and to request a reserve to manage these large payments going forward. The other significant issue to note at this time is that OPA contract negotiations for 213 and 214 are still in progress at the time of this report. Given that the contract settlement rates will not be known by the time the budget is tabled on 23 October 213, a contingency has been included in the 214 proposal for the 213 and 214 salary settlement. 214 Draft Operating Highlights The 214 Draft Operating maintains the current level of policing service in Ottawa and is within the increase guidelines set by the Board. While developing the, staff identified $3.7 million in efficiencies and new revenues and dealt with $2.8 million of other operational pressures. The OPS has a requirement for $7.6 million of new funding in 214. When the net assessment base growth of $3.1 million is applied to this amount, the net increase in the budget is $4.5 million which is equivalent to a 1.99% Police Tax Rate increase. Table 2 summarizes both the pressures and solutions which bring about the net increase of $4.5 million. A more detailed version is included in Annex A-1. The budget is categorized in accordance with the budget format for the City of Ottawa which is briefly described below. The changes in each of these categories are discussed in more detail in the section that follows: 1. Maintain Services ensure continued delivery of quality policing services 2. Provincially Legislated ensure compliance with relevant legislation 3. Growth expansion of policing services in support of the growth of the City s population 4. New Services new operational requirements 5. Service Initiative and Efficiencies base budget reductions; efficiency savings achieved through productivity improvements, technology investments, asset rationalization and effective procurement 6. User Fees and Charges adjustments to user fee rates in proportion to the overall tax rate increase 8

16 Table Draft Operating 1.99% Police Tax Rate Option ($ millions) Category Incremental Increase 1. Maintain Services $ Provincially Legislated $. 3. Growth $. 4. New Services $ Service Initiative and Efficiencies ($2.1) 6. User Fees and Charges ($.1) Incremental Requirement $7.6 Less: Assessment Growth net of adjustments ($3.1) Net Taxation Increase Requirement $4.5 Police Tax Rate Increase 1.99% Category 1: Maintain Services - $8.5 million increase Net Compensation Non-compensation items Maintain Services $7.1 M 1.4 M $8.5 M Maintaining existing service levels creates an incremental budget requirement of $8.5 million for 214. On its own, this category exceeds the total incremental funding requirement in the 214 of $7.6 million. Compensation Increases and Increments - $9.2 million increase With 83% of the Ottawa Police Service gross operating budget dedicated to staffing costs, the compensation element of the budget constitutes the most significant cost driver each year. The 214 compensation budget relates to 1334 sworn officers and 596 civilian members (including Special Constables and casual employees). This represents 5 less sworn full time equivalents compared to 213, and is the result of a reduction in operational backfill opportunities. This issue is discussed in more detail in a subsequent section. 9

17 The collective agreement with the Senior Officers Association (SOA) does not expire until 1 January 215, allowing staff to prepare the Senior Officer portion of compensation costs based on known costs. However, as previously mentioned, the Ottawa Police Association (OPA) contract expired on 1 January 213 and with the results of negotiations still unknown at the time of this report, key factors such as pay rate increases, the duration of the new agreements and any changes to member benefits may create pressure on this and future OPS budgets. An estimated settlement provision has been included in the 214 budget envelope to provide for the 214 salary settlement. As the 213 settlement is also unknown, a contingency provision has been carried forward. In addition to economic settlements, the $9.2 million compensation increase in the 214 draft budget includes provisions for both of the following situations: 1. members moving through their salary steps; and 2. members achieving levels of Responsibility Pay in accordance with their collective agreement. For example, an officer s salary doubles as he/she progresses from 4 th Class Constable level in the first year of employment to the 1 st Class Constable level in year four of their career. Officers also receive further increments known as Responsibility Pay in accordance with the Collective Agreement. This occurs when officers enter their 8 th, 17 th and 23 rd year of service when responsibility pay increments of 3%, 6% and 9% are applied respectively. Full Year Impact of Previous Year Hiring - $. million Starting in the 211 budget, no additional civilian or sworn staff positions have been added to the complement. As a result there is no budget impact related to previous year addition of positions. Retirement Costs no change Retirement costs are expected to stay the same for the 214 budget so the annual retirement provision will remain at $2.8 million. No further adjustments are planned for , given that the $2.8 million annual provision is expected to cover the peak of retirement costs during this period. Table 3 summarizes the forecasted sworn retirements, with actual figures to date for 213. Based on current information, retirement levels are expected to level off between 214 and 216 at approximately 25 retirements per year with slight increases forecasted beginning in 217. The corresponding payout per retiree is expected to remain relatively level over this forecast period as well. Retirements not only create a financial pressure, but they also place challenges on policing operations. The OPS has a strong forecasting and recruitment process in place. As well, a project is underway to introduce formal succession planning into the organization. 1

18 Table 3 Sworn Retirements (Forecast vs. Actual) Actual Forecast Reduction in Operational Backfill Program - $.5 million decrease Each year, the OPS is requested to send sworn members to support operations for other police services or for U.N. peace keeping operations. In accordance with the Board-approved Operational Backfill Program, if a request is fully funded by the external police service, and exceeds a term of one (1) year, OPS can increase the staff complement by one position and hire an additional recruit or direct entry officer. In this way, the staffing levels in the OPS service delivery model are preserved. The Operational Backfill Program puts no pressure on our operating budget as the revenue received from the external agency offsets the member s salary. The largest number of requests comes from the RCMP for assistance with Canadian peacekeeping missions. Over the past few years, OPS peacekeeping opportunities have declined as other police services have begun offering to send members and more recently the actual number of missions has dropped. In 213, the compensation budget and staff complement number was adjusted to reflect 5 less Operational Backfill secondments. The 214 budget has been adjusted by a further reduction of 5 Operational Backfill positions to reflect a continuation of this trend. This change has no impact on the OPS service delivery model. The number of officers assigned to it remains at a level of 1,223. The offsetting revenue portion of the Operational Backfill change is addressed later on in this report. 11

19 Efficiencies in Compensation - $1.6 million decrease As part of the $3.7 million in efficiencies that needed to be identified in order to resolve the budget, $1.6 million relates to compensation. Adjustments to the compensation provision and civilian gapping numbers make up the total compensation efficiencies. Annex A-8 provides a summary of the total efficiencies. Materials, Supplies and Services - $.9 million increase Inflation $.3 million increase Inflationary items totalling $.3 million were identified as part of the increase related to the budget provision for materials, supplies and services in 214. Facility costs, IT maintenance contracts and insurance were the areas most affected. A complete list can be found in Annex A-4. Maintain $.6 million increase The 214 budget process identified $.6 million in operating pressures that were a result of new systems and programs being added during 213. Items such as the increased cost of IT maintenance, ever-greening of equipment, increasing the budget base for indemnification costs and budget base funding of the Real You Program all contributed to the increase. A complete list can be found in Annex A-4. Projects funded by Pay-As-You-Go - $1.1 million decrease Projects funded by pay-as-you-go sources were reduced by a total of $1.1 million during the budget process. This change was made to create funding room for increases to the envelope for Service Initiative and Business Continuity projects discussed in a subsequent section. These projects are listed in Annex A-5. Non-Tangible Capital Assets no impact To conform to the City s standards for capital asset accounting, staff reviewed all capital budget projects and identified those which would move to the operating budget under the new regime. A total of $4.4 million of projects, formerly in the capital budget, will now be budgeted and accounted for in the operating budget. This transaction was balanced by an offsetting reduction of $4.4 million in capital budget pay-as-you-go funding. One Time Funding - $.8 million reduction One-time funding was provided in 213 to finance $.8 million of the $1.2 million Project Fund. It will not re-cur in 214. Facilities Strategic Plan - $.9 million increase Facilities Strategic Plan Funding - $.3 million increase 12

20 At the 24 June 213 regular PSB meeting, the Facilities Strategic Plan was presented. The report outlined the financing strategy which requires an additional contribution to the Facilities Strategic Reserve Fund of $3k annually for 15 years. This $3k combined with the previously identified $6k per year from the court uploading funds (see below), will provide enough funding to finance the 2 year plan as outlined in the report. Facilities Strategic Reserve Fund Contributions - $.6 million increase Beginning in 212, a pay-as-you-go (PAYG) contribution to the Facilities Strategic Reserve Fund was launched. The contribution began at a level of $.6 million and is expected to increase by that amount each year for 7 years, reaching a level of $4.3 million in 218. The goal of this contribution is to build a reserve fund that will assist the Service in funding the Facilities Strategic Plan. It is a proactive and financially responsible initiative that will help to ensure that funds are on-hand to help offset the cost of the projects outlined in the long term Facilities Strategic Plan. As outlined in the budget document for 212, the budget impact of the contribution was offset by the revenue received from the province for court security costs. This approach was consistent with Council s direction that provincial up-loading funds be used to finance new strategic initiatives. As explained in the 213 Report, staff recommended a slight amendment to this approach for 213. Roughly half of the $.7 million additional court security cost funding was used to increase the contribution to the Facilities Strategic Reserve Fund. The remaining amount was used to rent space ($.3 million) and fund project support costs ($.1 million). This objective was accomplished in April with the leasing of a City owned property, 267 Queensview drive. The OPS records section will be relocated to this facility which will also house active and dormant records. The space they have vacated at Elgin will be up-fit for CID functions. In 214, the full incremental amount of $.6 million of the up-loading funds received from the province for court security costs will be contributed to the Fund. The total contribution from court uploading sources will be $1.6 million in 214. Including the new $.3 million, a total contribution of $1.9 million will be made in 214. Revenue Upload of Court Costs - $.6 million increase In accordance with the court cost upload agreement with the province, the OPS began receiving revenue from the province in 212 to help offset the cost of providing court security. The amount of $1.9 million will be received in 214. It will continue to increase by $.6 million for another 4 years, reaching a peak level of $4.3 million in 218. As discussed above, these funds are being used to support strategic facility initiatives at OPS. Reduction in Operational Backfill Program Revenue - $.5 million decrease As mentioned previously, the number of positions in the Operational Backfill Program will be reduced by a further five (5) in 214. This change means that a corresponding reduction in 13

21 revenue will occur. This change has a neutral effect on the overall budget as the reduction in revenue is offset by the corresponding reduction in compensation costs. Annex A-3. shows the impact that this reduction will have on the overall OPS complement. Category 2: Provincially Legislated no change No provincially-legislated pressures have been identified for 214. Category 3: Growth no change No growth related additions to the OPS staff complement have been included in the 214 budget. Category 4: New Services - $1.3 million increase The 214 draft budget includes $1.3 million to support the new operational requirements described below. Business Plan - $.1 million increase Initiatives -$.7 million increase A provision of $.7 million has been included to fund various initiatives in support of the OPS business plan. They are outlined in Annex A-6, and relate to The Chiefs three priorities of guns and gangs, violence against women and traffic safety. Mobility/Wireless Strategy - $.3 million increase Over the term of the Business Plan, OPS will be implementing enhanced wireless and mobility services in keeping with the long term IT strategic goal of supplying the right data, to the right person, any time, on any device. Project Funds - $1.2 million increase Service Initiative projects - $.7 million increase In the 213 budget, a $1.2 million Project Fund was created to support OPS transformation and other projects. An additional $.7 million has been added in 214 to continue to support project work. These projects will be focused on achieving Service Initiative objectives with the goal of achieving $1 million to $2 million of savings in 214. Business Continuity and Emergency Plan - $.5 million increase In the 214 budget, a $.5 million project fund has been created to support OPS business continuity and emergency planning projects. A portion ($.4 million) of the funds is allocated to Business Continuity projects while the remaining amount ($.1 million) is allocated to preparing the Emergency Plan and achieving certification by the City of Ottawa. These 14

22 projects will enable OPS to begin to put in place the infrastructure, systems and processes needed to ensure that it can carry out its responsibilities when events occur which disrupt normal business operations. A complete list of projects is summarized in Annex A-7. Category 5: Service Initiative and Efficiencies - $2.1 million increase In order to ensure that the tax rate did not exceed 1.99%, a total of $3.7 million of reductions to the operating budget have been implemented. Efficiencies of $1.6 million relating directly to compensation have been discussed previously in this report. The balance of $2.1 million is outlined below and shown in Annex A-8. Service Initiative - Collision Reporting Centres Revenue - $.8 million increase The Collision Reporting Centre project is an example of the kind of transformational change that the Service Initiative is bringing about. When fully implemented, it will free-up 8,8 hours of Patrol time, reduce customer wait times, cut the cost of producing a collision report and generate $1.4 million of new revenue. A projected $.6 million in increased revenue was included in the 213 which is on target to be reached. As mentioned in last year s budget report, as part of the phase-in plan, another $.8 million increase in revenue has been included in the 214 budget. Other Reductions and Efficiencies - $1.3 million decrease A total of $1.3 million in other efficiencies were identified including increased revenue of $.5 million from external contracts, $.4 million in efficiencies the Directorates were tasked to find within their sections and $.4 million in contracts, fuel, storage and a range of small savings. Category 6: User Fees & Charges - $.1 million increase The objective of the Board s 27 User Fee policy is to ensure that the pool of revenue generated by user fees grows at the same pace as the tax rate. This policy requires an annual review and analysis of user fees. For 214, user fees are increasing on average by 2.%, corresponding to a revenue increase of $1,. Annex A-9 lists the fee levels for 214. Annex A-1 summarizes all revenues and recoveries captured in the 214 Draft, with comparisons to Draft Operating Forecast As noted earlier, the operating budget forecast for the period is based on a Police Tax Rate increase of 2.5%. The forecast is summarized in Table 4. It shows the budget for OPS growing by roughly $1 million each year for the next three years. In order to achieve the $2.5% goal, the Police Service will need to generate annual efficiencies in the range of $1. million for the period The Service Initiative is the primary mechanism for achieving these efficiency goals. It is clear from the transformation that is being achieved through its first undertakings such as the Collision Reporting Centre 15

23 project, the online reporting proposal and the online background check system, that significant cost saving and revenue generation are possible within the Police Service. Other self-serve initiatives will follow to build on this new savings and revenue base. Table Draft Operating Forecast ($ millions) Incremental Requirement Maintain Services $1.3 $1.5 $1.9 Growth $.7 $.8 $.9 New Services $.2 $.2 $.2 Service Initiative and Efficiencies ($1.) ($1.) ($1.) User Fees and Charges ($.1) ($.1) ($.2) Incremental Requirement $9.9 $1.4 $1.8 Less Assessment Growth at 1.7% ($4.) ($4.2) ($4.4) Net Taxation Increase Requirement $5.9 $6.2 $6.4 Police Tax Rate Increase 2.5% 2.5% 2.5% 215 The net incremental budget requirement for 215 is $9.9 million, or a 2.5% tax increase based on the following estimates and assumptions: A contingency for salary settlements A provision of $.4 million for inflationary items A budget base of $.4 million to maintain and address new pressures A budget base of $1. million for leasing of radio equipment An increase of $.9 million to the contribution to the Facilities Strategic Reserve Fund Incremental revenue of $.6 million from the Province for court uploading costs Planned growth of 23 FTE s in the 3 rd Quarter A minimum of $1. million of efficiencies achieved through the Service Initiative Assessment base growth of 1.7% 16

24 216 The net incremental budget requirement for 216 is $1.4 million, or a 2.5% tax increase based on the following estimates and assumptions: A contingency for salary settlements A provision of $.4 million for inflationary items A budget base of $.4 million to maintain and address new pressures An increase of $.9 million to the contribution to the Facilities Strategic Reserve Fund Incremental revenue of $.6 million from the Province for court uploading costs Planned growth of 23 FTE s in the 3 rd Quarter A minimum of $1. million of efficiencies achieved through the Service Initiative. Assessment base growth of 1.7% 217 The net incremental budget requirement for 217 is $1.8 million, or a 2.5% tax increase, based on the following estimates and assumptions: A contingency for salary settlements A provision of $.4 million for inflationary items A budget base of $.5 million to maintain and address new pressures An increase of $.9 million to the contribution to the Facilities Strategic Reserve Fund Incremental revenue of $.6 million from the Province for court uploading costs Planned growth of 23 FTE s in the 3 rd Quarter A minimum of $1. million of efficiencies achieved through Service Initiative Assessment base growth of 1.7% 214 Draft Capital The Ottawa Police Services Board aims to provide an adequate capital envelope to ensure that assets such as fleet, facilities and information technology are replaced as required. For 214, the Board will consider a capital budget request totalling $7.6 million. This amount is considerably less than previous envelopes due to the rules of Tangible Capital Asset reporting as discussed previously in this report. Table 5 below provides a summary of capital project funds to be funded from the OPS reserve. The majority of projects, or $5.2 million, are for the renewal of OPS assets such as: Fleet - $3.2 million Information technology infrastructure - $2. million. In the growth category, $1. million has been assigned in 214 to begin planning and acquiring the mission critical information technology infrastructure to support the Computer Aided Dispatch (CAD) and Records Management Systems (RMS) that will support the new 17

25 South Division Facility. While the facility is being constructed, this system will serve as a back-up to the primary system at Elgin. The remainder of the Capital funds of $1.4 million is proposed for strategic initiatives. The largest one, the Elgin Refit Phase 2, will provide $1.2 million to realign space at 474 Elgin Street to meet the needs of the Criminal Investigative Directorate. This project is the first of many in the Facilities Strategic Plan. All of the capital projects planned for 214 are funded from OPS reserve funds with no projects being funded from debt. A description of each of these projects is provided in Annex B-3. A capital works in progress report is also provided in Annex B-1 to summarize the status of all existing OPS capital projects. These projects were reviewed during the development of the capital budget to ensure project objectives were being achieved. Table Ottawa Police Service Capital ($ millions) Funding Source Capital Project Total Need PAYG Revenues DC Debt Renewal of Assets Fleet Program $ 3.2 $ 2.9 $.3 IT Infrastructure IT Telecommunication.7.7 Subtotal $ 5.2 $ 4.9 $.3 $ - $ - Growth South Facility IM/IT $ 1. $ 1. $ - $ - $ - Subtotal $ 1. $ 1. $ - $ - $ - Strategic Initiatives Facility Realignment Plan - Elgin $ 1.2 $ 1.2 $ - Facility Realignment Plan - Swansea.2.2 Subtotal $ 1.4 $ 1.4 $ - $ - $ - Total $ 7.6 $ 7.3 $.3 $ - $ - Ten-Year Capital Forecast Annex B-2 presents the Ten-Year Capital Forecast for the Ottawa Police Service by individual project and by category of need. The ten-year gross requirement totals $184.6 million, and ranges from a high of $67.8 million in 219 to a low of $5.1 million in 222. The Facilities Strategic Plan as presented to the Board at the 23 June 213 meeting has been incorporated into the Capital Forecast. The ten year capital forecast summary is shown in Table 6. 18

26 Table 6 OPS Ten-Year Capital Forecast 214 to 223 ($ millions) Category Gross Amount Funding PAYG Reserves Revenue DC Debt Renewal of Assets $ 65.1 $62. $3.1 Growth $ 44.5 $ 5. $39.5 Strategic Initiatives $ 74.9 $25.3 $49.6 TOTAL $ $92.3 $3.1 $89.1 % of Total 5% 2% % 48% With the inclusion of the Facilities Strategic Plan and the removal of non-tangible capital assets, the distribution of funds between the 3 categories of assets has become more evenly distributed. Capital funds required for the renewal of assets, which includes fleet replacement and information technology renewal including telecommunication, totals $65.1 million. This amounts to 35% of the $184.5 million requirement over the 1 year forecast. The second category Growth includes those projects that are eligible for development charge (DC) funding in accordance with the City s Development Charge By-law (29). The growth requirements include new facility acquisition and/or construction. New facilities cost a total of $44.5 million or 25% of the total funding over the ten-year planning horizon. Debt will be the primary source of funding for these projects. The third category in the forecast is Strategic Initiatives. This category includes all strategic investments in support of long term objectives. In the 1 year plan, this is comprised entirely of Facilities projects that are not assigned to growth. The total funding for Strategic Initiatives of $74.9 million represents 4% of the total 1 year capital forecast. The largest portion of these funds relates to the re-building of Greenbank which is budgeted to cost $62.1 million. Funding for this category will primarily come from debt but the Facilities Strategic Plan Reserve is expected to provide funding as well in order to minimize the debt funding requirement. Status of OPS Reserve Funds Currently, the OPS has three permanent reserve funds that play key roles in capital funding. Annex B-4 provides a Continuity Schedule for each of the reserves. The status of the current reserve funds are as follows: 19

27 Fleet Replacement Reserve Fund This fund finances vehicle replacement projects. It carries a minimal balance year over year. In 214, the annual contribution to the Fleet Replacement Reserve Fund will be $2.9 million. This amount did not change from 213 and will remain at that level for the balance of the forecast. It will provide enough funding to meet the vehicle replacements required for each year, which is in the range of $2.8 million to $2.9 million. The revenue from the disposal of fleet vehicles funds any shortfall. Facilities Strategic Reserve Fund This fund was established in 212. Its role is to support the initiatives outlined in the OPS Facilities Strategic Plan. Each year, the contribution level is adjusted by the amount of funding released by the Province for court security costs. As previously mentioned, in 214 the entire funds from the Province will be contributed to the reserve along with an additional $3k from operating. After one-time expenditures of $1.5 million from the reserve in 213 to partially finance fit up costs of Queensview, a $.3 million balance in the Facilities Strategic Reserve Fund will be on hand to begin 214. This is expected to grow to $9.4 million by the end of 217. The continuity is based on the contributions for the periods as outlined in Annex A-1. OPS General Capital Reserve Fund This fund finances the remainder of the OPS capital work plan, excluding those projects that are debt-financed. As discussed previously in this report, the contributions to this reserve will be reduced considerably, beginning in 214, as the non-tangible Capital Asset projects are moved over to the operating budget. The continuity schedule for the reserve fund, showing the contributions, expenditures and final balance can be found in Annex B-4. This schedule shows that all planned projects can be funded. A $5.3 million balance in the General Capital Reserve Fund will be on hand at the end of 213. The balance accrued to date has arisen primarily as a result of the capital formation strategy that the Board adopted during the Financial Framework. The continuity is based on the capital formation contributions for the periods as outlined in Annex A-1 and has been adjusted according to the new Tangible Capital Asset Reporting requirements. 2

28 CONSULTATION The 214 Draft Operating and Capital estimates will be presented and tabled with the Ottawa Police Services Board and City Council on 23 October 213. OPS staff will attend the four multi-ward bilingual City budget consultation meetings being held during 28, 29, 3 October 213 and 7 November 213. Public consultation will occur on 28 October 213 and 25 November 213 at 5: p.m. during the regular meetings of the Police Services Board in the Champlain Room at City Hall. At the 25 November meeting, formal consideration and review of the 214 will occur. Approval is also scheduled for this date. City Council will begin its approval process on 27 November 213. FINANCIAL IMPLICATIONS Financial implications are presented within the report. CONCLUSION The Ottawa Police Service is tabling a draft 214 gross operating budget of $288.6 million which creates a Police Tax Rate increase of 1.99%. The 214 draft capital budget is tabled at $7.6 million. Approval of the budget will ensure that the Board and the Service have the funds required to meet the Chief s Strategic and Operational Priorities for 214. (original signed by) Charles Bordeleau Chief of Police Annexes Annex A-1 OPS 214 to 217 Operating Forecast Annex A-2 OPS 214 Staff Complement Summary by Section Annex A-3. OPS 213/214 Staff Complement Summary by Rank Annex A-3.1 OPS Summary of Civilian Complement by Pay Group Annex A-3.2 OPS Summary of Sworn Complement by Rank and Category Annex A-4 OPS 214 Material, Supplies and Services Annex A-5 OPS 214 Former Capital Projects Transferred to Operating Annex A-6 OPS 214 Business Plan Annex A-7 OPS 214 Project Funds Annex A-8 OPS 214 Service Initiative and Efficiencies - $3.7M 21

29 Annex A-9 OPS 214 Recommended Fee Schedule Annex A-1 OPS Revenue Comparison 213 vs. 214 Annex A-11 OPS Community Police Centres 214 Net by Centre Annex A-12 OPS History of Gross and Net Expenditures Annex A-13 OPS 214 Review Solutions - $2.8M Annex B1 OPS Capital Works in Progress Annex B2 OPS Capital Forecast Annex B3 OPS 214 Capital and Operating Project Details Annex B4 OPS 214 to 223 Continuity Schedules 22

30 REPORT RAPPORT DATE : Le 23 octobre 213 DESTINATAIRES : Le président et les membres de la Commission de services policiers d Ottawa EXPÉDITEUR : Le chef de police, Service de police d Ottawa OBJET : PROJET DE BUDGET DE FONCTIONNEMENT ET D IMMOBILISATIONS 214 RECOMMANDATIONS Que la Commission de services policiers d Ottawa reçoive et dépose le Projet de budget de fonctionnement et d immobilisations 214 du Service de police d Ottawa, aux fins d étude lors de la réunion de la Commission du 25 novembre 213. INFORMATION DE BASE Dans le cadre de la réunion du 24 juin 213, la Commission a demandé au personnel de préparer la version préliminaire du budget de fonctionnement et d immobilisations 214 en visant une augmentation de moins de 2, % du taux d imposition. Le personnel a respecté la consigne de la Commission. Le Projet de budget de fonctionnement et d immobilisations 214 représente une hausse de la taxe de police de 1,99 %. À propos de la période prévisionnelle, la prévision de budget de fonctionnement 215, 216 et 217 du SPO déposée devant la Commission tient compte d une augmentation de la taxe de 2,5 %. DISCUSSION Le Service de police d Ottawa (SPO) fournit les services policiers aux résidents, aux entreprises et aux visiteurs de la Ville d Ottawa comme en fait état la Loi sur les services policiers de l Ontario. La demande pour ces services est motivée par les besoins des membres de notre collectivité. Dans le but d assurer la disponibilité des fonds permettant de répondre aux demandes de la collectivité, l article 39 de la Loi sur les services policiers exige de la part de la Commission qu elle approuve une allocation budgétaire annuelle à l intention du service de police pour que celui-ci dispose des fonds nécessaires au maintien du corps policier et qu elle lui procure l équipement et les installations répondant à ses besoins. Conjointement avec le Plan directeur du SPO et les autres documents de planification stratégique, le budget annuel 23