1. Ottawa Police Service 2008 Budget Directions, 2009 and 2010 Financial Framework Police Services Board September 10, 2007

2. Presentation Topics 1. Citizen Satisfaction with Police Services 2. Issues Arising from 2007 Budget 3. Proposed Police Services Board Financial Framework 2008 – 2010 4. Financial Policy Considerations 5. 2008 Budget Directions Summary and Timetable

3. Citizen Satisfaction with Police Services May 2007 Decima Research Public Opinion Survey – 75% of respondents satisfied with police services 2006 OPS Commissioned Priora Research Survey – 84% of respondents satisfied with police services Current OPS Business Plan – 4 community consultation sessions – support for strategic direction

4. Issues Arising from 2007 Budget Inflationary tax increase achieved by adopting six principles: 1. Growth needs for staff were deferred 2. Capital funding was reduced by $2.3 m 3. The Board accepted financial risk – Freezing of funding levels for fuel, fleet repairs, overtime – Increased vacancy allowance by 20% 4. All new initiatives were deferred 5. Efficiency target was doubled 6. User fees were increased

5. Issues Arising from 2007 Budget Impact on Future Years: 1. Capital needs pushed out into future years. – Funding increases of $5m required over 2008/ 2009 2. Staffing growth may fall behind demand in certain areas of the City – Will have to play “catch-up” at some time – Need to provide basic, front-line service and meet response times for P1, P2 calls 3. Fuel prices are rising – 2008 budget pressure of up to $300,000 Repeated inflationary increases are not possible

6. 2007 Approved OPS Forecast Impact on Citywide Taxes

7. Presentation Topics 1. Citizen Satisfaction with Police Services 2. Issues Arising from 2007 Budget 3. Proposed Police Services Board Financial Framework 2008 – 2010 4. Financial Policy Considerations 5. 2008 Budget Directions Summary and Timetable

8. Ottawa Police Services Board Financial Framework Existing Elements Taxes fully fund operating and capital requirements – No one time funding User fee policy and efficiency targets in place – All efficiencies achieved New revenue streams created – Grants, alarm revenue No capital infrastructure deficit – Taxes maintain existing assets Capital funded by development charges and debt when possible – Benefiting user pays, minimizes tax rate impact

9. Ottawa Police Services Board Financial Framework New Elements for 2008 – 2010 1. Ensure budget bases keep pace with the pressure of delivering quality policing services 2. Provide for growth needs 3. Provide for imminent large scale capital projects 4. Build an operational contingency fund 5. Seek out more new funding sources

10. 1. Delivering Quality Policing Service Service delivery model of sworn and civilian members and associated equipment, supplies, and training for: Three Patrol Divisions – 24/7 platoon emergency response – Neighbourhood and School Resources Emergency Operations – Tactical, Traffic, Canine, Major Events, etc. Criminal Investigative Services – Major Crime, Assault, Guns & Gangs, Drugs Operational Support – Communications Centre, etc. Impact: Approx. 1.0% citywide tax increase per year

11. Policing is a people business Labour costs historically require greater than inflationary spending increase

12. Delivering Quality Policing Service 2008 Budget Pressures Staffing Costs$8.8 M – Estimated economic increases, increments, responsibility pay, benefits Material & Supplies 1.1 M – Utilities, leases, fuel, contract services Offset by: User Fee Policy Impact(0.15 M) Offset by: Efficiency Target (0.5 M) Subtotal $9.1 M 2008 Citywide Tax Impact = 0.93%

13. Policing has changed, and costs are increasing “A 30 Year Analysis of Police Service Delivery and Standards” (International Centre for Urban Research Studies, British Columbia 2005) Conclusions: Police time and resources spent responding, processing, and clearing criminal events has increased disproportionately to police budgets and staffing Strain on police resources resulting from: – Upward trend in reported crimes is disproportionate to population – Property & nuisance crimes incurring disproportionate costs – Need for technology and training – Administrative loads and procedural complexity on the rise

14. 2. Provide for Growth Needs Growth in the City has a significant impact on demand for police services SGI 2013 Project identifying what OPS needs to do to keep pace with growth in the areas of: – Staffing – Divisional boundaries – Buildings – Assets and infrastructure 2008 Growth needs fund themselves - through city assessment growth estimated at 2% or $3.2 million 2008 Recommendation: – 30 new sworn officers – No new civilian positions pending Strategic Deployment Plan

15. 3. Imminent Large Scale Capital Projects Mobile Data Terminals $2.1 M Portable Radio System $5.0 M New Divisional Buildings West & South

16. Capital Formation Funding Envelope Needs projected to increase $5.0 million by 2009 2008 Impact: 0.5% citywide tax increase $ 11.4 M $ 16.4 M

17. 4. Operational Contingency Fund The Ottawa Police Service faces operational and financial pressures each year, such as: – Unforeseen major events – Security costs of being the nation’s capital – Significant crime investigations – Unfunded liabilities; sick leave and retiree benefits – Insurance claims Recommendation for $1.0 million base funding 2008 Impact: 0.1% citywide tax increase

18. 5. Seek Out More New Funding Sources 1. Federal Funding for the security costs related to the Nation’s Capital 2. Development Charge by-law update 2009 Petition for funding for service vehicles and IT infrastructure In practice in GTA 3. New grants from Province 4. Federal 2,500 Officer Program 5. User Fee increases as per approved policy

19. Presentation Topics 1. Citizen Satisfaction with Police Services 2. Issues Arising from 2007 Budget 3. Proposed Police Services Board Financial Framework 2008 – 2010 4. Financial Policy Considerations 5. 2008 Budget Directions Summary and Timetable

20. Financial Policy Considerations Subject to Approval of Budget Directions 1. Disposition of year end surplus or deficit Satisfy final outstanding recommendation from Auditor General’s Review of OPS Budget Process Considered “Best Practice” by OACP Budget Committee 2. Authority for usage of operational contingency fund 3. Minimum Reserve Fund balance(s) 4. Contributions towards Unfunded Liabilities

21. Presentation Topics 1. Citizen Satisfaction with Police Services 2. Issues Arising from 2007 Budget 3. Proposed Police Services Board Financial Framework 2008 – 2010 4. Financial Policy Considerations 5. 2008 Budget Directions Summary and Timetable

22. 2008 Budget Directions Recommendation - Summary Incremental Requirement$ Millions Delivering Quality Policing9.1 Growth and Business Plan Priorities3.2 Capital Formation Costs5.0 Contingency Planning1.0 Less: Assessment Growth(3.2) Net Tax Increase Requirement15.1 Police Tax Rate Increase9.40 % Citywide Tax Rate Increase1.54 % Impact to Average Residence$38.50

23. OPS Budget Directions Term of Board Impact on Citywide Taxes

24. 2008 Budget Timetable for Approval OPS Board: Tabling of 2008 Budget DirectionsSept. 10 OPS Board: Public Delegations and Approval of 2008 Budget Directions Sept. 24 City Council: Receipt of 2008 Budget DirectionsSept. 26 OPS Board: Public Delegations on 2008 BudgetOct. 22 OPS Board: Tabling of Draft 2008 BudgetNov. 14 OPS Public Consultation Town Hall MeetingsNovember OPS Board: Public Delegations and Approval of 2008 Budget Nov. 26 City Council: Approval of 2008 BudgetDec. 14

25. Conclusion Maintaining policing services requires approximately 1.0% citywide tax increase annually, as police labour costs in Ontario are expected to exceed inflation Capital needs require an additional 0.5% citywide increase over two years due to imminent capital projects Introducing an operational contingency fund will require an 0.1% citywide increase Growth will fund itself Financial policies will be formulated and adopted to manage these new funds and tools

26. Recommendations For Deliberation and Approval September 24: 2008 Budget Direction for incremental tax increase of no greater than $15.1 million, or 1.54% on citywide bill 2008 Budget Timetable as listed in Table 4 of report Forward report to Council for information

27. Thank you