1. 1 Police Programs, Budget Issues & Cost Containment Initiatives December 1, 2010 Houston Police Department Charles A. McClelland, Jr. – Chief of Police Joseph A. Fenninger, CFO & Deputy Director

2. 2 Challenge #1 – Policing With A Smaller Force (Two Year Trend – All Funds & Grants) Year End FY2009 Year End FY2010 Forecast FY2011 FY 2011 B/(W) vs FY2009 Classified OT (FTE's) 517 366 288 (229) Classified Headcount 5,225 5,341 5,308 83 Cadets in Academy 294 139 140 (154) Civilian Headcount 1,682 1,624 1,585 (97) Civilian OT (FTE's) 67 54 42 (25) EPROs (FTE's) 63 29 - (63) Temporary (FTE's) 46 51 18 (28) Total Staffing 7,894 7,604 7,367 (513)

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4. 4 Houston Police Department Fiscal Year 2011 General Fund Budget FY10 Base-Line Budget $665,312,304 Plus – FY10 Salary Transfers8,284,000 Plus – FY11 Contractual/Mandatory Increases (M&C, HOPE)20,908,493 Less – FY11 Cost Eliminations – Debt Service(2,148,752) FY11 – Actual General Fund Operating Costs$692,356,045 Less – Cost Eliminations from Program Cuts(11,455,126) Less – Classified Salary Transfers From General to Special Funds (Note: not a cost reduction)(14,290,029) FY11 General Fund Budget$666,610,890

5. 5 FY11 Mandatory General Fund Growth Components - M &C, Pensions, HOPE, Insurance & Regulatory - Classified Salaries (Meet & Confer)$8,341,157 Classified Pension (Meet & Confer)$5,000,000 HOPE 3% & 1.25% Increases$2,331,416 Municipal Pension Increase$ 548,068 Neighborhood Protection Inspectors$ 428,714 Health Insurance Benefits – All$4,064,929 FICA$ 178,353 Other Insurance Fees$ 15,856 Totals $20,908,493

6. 6 FY11 – GF Cost Eliminations – Adopted Budget Cuts Delay two Cadet classes$2,000,000 Delay two Cadet classes$2,000,000 Reduced Supplies & Services$1,958,000 Reduced Supplies & Services$1,958,000 Classified Overtime (78 FTE’s)$2,625,000 Classified Overtime (78 FTE’s)$2,625,000 Temporary Personnel (47 FTE’s)$1,084,000 Temporary Personnel (47 FTE’s)$1,084,000 Civilian Staff Reductions (39)$1,061,478 Civilian Staff Reductions (39)$1,061,478 Part-time Personnel – EPROs (29 FTE’s)$1,000,000 Part-time Personnel – EPROs (29 FTE’s)$1,000,000 Take Home Vehicles$ 500,000 Take Home Vehicles$ 500,000 Fleet Incentive Pay$ 400,000 Fleet Incentive Pay$ 400,000 Security Services Contract$ 371,000 Security Services Contract$ 371,000 Travel & Training$ 320,000 Travel & Training$ 320,000 Higher Class Pay$ 300,000 Higher Class Pay$ 300,000 Civilian Overtime (12 FTE’s)$ 200,000 Civilian Overtime (12 FTE’s)$ 200,000 Totals (including 205 FTE’s) $11,455,126

7. 7 FY11 – Classified Salaries – Cost Transfers Traffic Salaries to DARLEP (80 FTE’s)$4,332,036 Traffic Salaries to DARLEP (80 FTE’s)$4,332,036 Salaries to Police Special Svcs Fund (70 FTE’s)$3,755,993 Salaries to Police Special Svcs Fund (70 FTE’s)$3,755,993 Salaries to Alarm Detail Fund (116 FTE’s)$6,202,000 Salaries to Alarm Detail Fund (116 FTE’s)$6,202,000 Total Cost Transfers (266 FTE’s) $14,290,029 Plus Program Cuts (205 FTE’s) $11,455,126 Total General Fund Reductions (471 FTE’s) $25,745,155

8. 8 Houston Police Department General Fund Budgets FY09FY10FY11 Classified Comp - Total $ 539,114,378 $ 547,685,914 $ 553,999,560 Classified Salaries - Transfers $ (3,952,000) $ (8,284,000) $ (14,290,029) Classified Comp Budget $ 535,162,378 $ 539,401,914 $ 539,709,531 Civilian Compensation Costs $ 83,790,100 $ 85,480,480 $ 87,821,637 Total Compensation $ 618,952,478 $ 624,882,394 $ 627,531,168 Supplies $ 19,290,858 $ 13,577,866 $ 14,526,448 Other Services $ 19,476,796 $ 19,645,614 $ 20,122,212 Capital$ - $ 233,592$ - Non-Capital$ 147,400$ 569,208$ 147,400 Debt Service/Other Trans $ 7,765,087 $ 6,403,630 $ 4,283,662 Total $ 665,632,619 $ 665,312,304 $ 666,610,890

9. 9 DARLEP – FY11 GF Budget Impact GF budget impacts to HPD: GF budget impacts to HPD: - FY11 $4,297,548 - FY12 $6,285,685 Additional FY11 GF budget cuts needed to offset $4.297M: Additional FY11 GF budget cuts needed to offset $4.297M: 1. $1.3 million civilian compensation – all civilian hiring is frozen for remainder of FY11 2. $1.4 million Phase Down – lowered forecast based on running rate 3. $750,000 of budgeted Court OT will be cut 4. $850,000 from various classified compensation line items

10. 10 FY11 - General Fund Effects from DARLEP ($4,297,548)** OriginalRevised Cost transfers out $14,290,029 $9,992,481 Cost transfers out $14,290,029 $9,992,481 Program/budget cuts $11,455,126 $15,752,674 Program/budget cuts $11,455,126 $15,752,674 Totals $25,745,155 $25,745,155 ** - For FY12, DARLEP budget impact on the GF is $6.3 million. This includes $5,000,000 for classified costs, $720,000 for Evidence Technicians, and $600,000 for 12 Mobility Response Team members. (Note: The viability of the entire MRT program must be reassessed because of funding issues.)

11. 11 SafeClear – Funding Issues Annual Sources: Metro $2,889,352 + GF $389,352 = $3,278,704 Fiscal YearTowsFund Sources Fund Uses B/(W) 2005-$2,023,806 $0 200631,716$3,076,502$2,680,797$395,705 200734,850$3,674,409$3,331,721$342,688 200836,777$3,620,924$3,052,509$568,415 200944,913$3,847,119$3,641,124$205,995 201057,718$3,486,080$4,950,582($1,464,991) 201166,860$3,279,704$4,958,563($1,678,859) $23,008,544$24,639,591($1,631,047)

12. 12 SafeClear Plan to Resolve Funding Issue METRO to absorb tow authorization function HPD classifieds reassigned – GF increase of $1.5M HPD to continue all other oversight responsibilities, including payment of tow tickets HPD to retain funding sources (METRO & GF) To offset increased GF costs, increase non-SafeClear tows from $140 to $152. The $12 to HPD GF Without increased revenue, the GF will deteriorate an additional $1.5 million

13. 13 Auto Dealers Plan to Resolve Funding Issue The Auto Dealers Program regulates the auto industry in Houston and protects citizens Now in a deficit condition - $1.1 million annually Revenue from fees for licenses does not cover total program costs as it was designed Of the 24 different fees, most have been unchanged since 1981 Suggested fee increases have been submitted Without increases, the GF will grow by $1.1 million

14. 14 HPD Program & Budget Issues HPD Program & Budget Issues Questions and Answers