2 September 2009

2 Septembre 2009



The POLICE SERVICES BOARD met on 27 July 2009 and submits the item contained in this Report for the information and/or approval of Council at its meeting of 2 SEPTEMBRE 2009.


La COMMISSION DE SERVICES POLICIERS s’est réuni le 27 JUILLET 2009 et soumet l’article du présent rapport au Conseil pour information et/ou approbation lors de sa réunion du                     2 SEPTEMBRE 2009.



Present / Présences :


                                                        27 July 2009

Chair / président:                              E. El-Chantiry

Vice Chair / vice-président:              J. MacEwen

Members / Membres:                       D. Guilmet-Harris

                                                        H. Jensen

                                                        M. McRae

                                                        B. Monette



















Police Services Board




Commission de Services Policiers



















That Council receive this report for information.






Que le Conseil prenne connaissance du présent rapport à titre d’information.






The Board has given direction to the Chief of Police to pursue from the Federal Government reimbursement of costs related to the Tamil demonstrations that occurred in April 2009.






La Commission a donné instruction au chef du Service de police de demander au gouvernement fédéral le remboursement des coûts liés aux manifestations tenues par les Tamouls en avril 2009.






1.      Chief of Police’s report dated 17 July 2009.


2.      Extract of Draft Minute, 27 July 2009.










17 July 2009



Executive Director, Ottawa Police Services Board



Chief of Police, Ottawa Police Service








That the Ottawa Police Services Board receive this report for information.




The quarterly financial report summarizes the current financial position of the organization, outlines the operational issues affecting the Service’s finances and presents the projected year-end financial position for Ottawa Police Service (OPS).  This report presents a projection of the Service’s year-end financial position and outlines the significant variances that are known at this time.  The accuracy of this projection improves with each quarter as the Service’s expense and revenue patterns become more certain.  The First Quarter Financial Status Report was received by the Board in April.  At that time, a break-even financial position for 2009 was projected.




At the end of the second quarter, the OPS is projecting a deficit position for the 2009 fiscal year, largely as a result of the Tamil demonstration.  The current information indicates that the budget pressures identified in the first quarter will continue, in areas such as WSIB costs, funding for the DART Team, and a shortfall in alarm revenue.  Additional budget pressures arise in retirement and benefits costs and expenses related to the Tamil demonstration.  These pressures are partially offset by revenue received from the Province this year for the 2008 Police Officer Recruitment Fund, a positive trend in fuel prices, surpluses in overtime and court time, vehicle maintenance expense and a projected surplus in liability claims.  Table 1 represents a summary of these significant variances and each item is discussed in more detail below.

Ottawa Police Service
2009 Projected Year End – Significant Variances



$ Millions



Tamil Demonstration Costs


Retirement Costs & Benefits




DART Team Funding


Alarm Revenue


2008 Police Officer Recruitment Fund Revenue


Overtime & Court Time Surplus


Fuel Costs


Vehicle Maintenance


Liability Claims




2009 Potential Operating Deficit


Identified Pressures


a) Tamil Demonstration Costs


The costs for the Tamil demonstration are reported separately as these are extraordinary costs.  (see Horizon Issues below for further discussion on the cost recovery and the pursuit of mitigating options).  The duration of the event, the impact of changing crowd sizes and the occurrence of two statutory holidays at the outset of the protest has made it a significant operational challenge to manage.  These same factors have created overtime and related support costs.  The total cost to the OPS for these demonstrations was $925,000.


b) Retirement Costs and Retirement Benefits


In the first quarter report, it was mentioned in the horizon issues that retirement costs and retiree benefits costs were starting to create budget pressures.  These pressures have grown in the last 3 months with an additional 8 retirements.  The budget was based on an expected number of 36 retirements for 2009 but as of 30 June, a total of 40 members have retired.  Although it is typical that most members plan their retirements for the first quarter of the year, we have had an above average number of retirements for the second quarter.  As well, the level of retirement payout-per-employee is somewhat higher than expected.  The benefit provider also sent notice in March of this year that the employer portion of retiree benefits is increasing by 17.5% effective 1 January 2009.  These situations combined, are exerting a pressure of approximately $0.7 million. These costs will continue to be monitored and reported on in the third quarter report.




The pressures in costs for WSIB (Workplace Safety and Insurance Board) still continue based on actual results to June 30th.  These costs are included in compensation costs for the OPS.  The costs in this area have been increasing significantly over the past 3 years and although adjustments to the budget were made in 2009 to increase the base by $120,000 to $1.3 million, actual expenditures are projected to be in the $1.6 million range, creating a pressure of $300,000.


d) DART Team Funding


The Direct Action Response Team (DART) was implemented in 2007 with a mandate to provide a highly visible and active uniform police enforcement presence in communities where gang activities occur.  The Team works in partnership with the Guns and Gangs Unit, and also takes on a preventive role by engaging in community mobilization efforts to develop gang education, prevention and suppression strategies.  It is composed of 9 members: 1 sergeant and 8 constables.


Until December 2008, the Province provided funding for 6 members of the Team (the sergeant and 5 constables).  When the first quarter report was presented, there had not been formal confirmation that funding would resume in 2009.  However, police services across Ontario have been pressing the government to re-commence funding for initiatives such as DART (Ottawa), TAVIS (Toronto) and PAVIS (Peel), and on 22 June at the OACP, Minister Bartolucci announced the funding was being renewed.  He did not say when, but it was understood to be "immediate".


On that basis, a revenue shortfall in the range of $300,000 is forecast which reflects a loss of funding for the first six months of this year.


e) Alarm Revenue


In 2008 there was a shortfall in false alarm revenue of $156,500.  It fell on the heels of a $150,000 budget reduction in this area in the 2008 budget.  Alarm revenue for 2009 is again expected to be in a deficit of approximately $100,000 position by year-end.  While this news is negative from a financial perspective, it has important and positive operational impacts.  Lower than expected revenue means that the False Alarm By-law is working - more people are aware of the impact of false alarms and are doing their part to reduce them.  As a result, officers can spend more time on higher priority operational matters.  This item will be closely monitored and if necessary, a further reduction in the budget will be made in 2010.


f) 2008 Police Officer Recruitment Fund Revenue


In 2008 the Provincial Government announced the Police Officers Recruitment Fund, a Federal program administered through the Province.  The Federal government committed to funding 2500 additional police officers in communities across Canada over the next five years through this program, and the Service was granted funding for 10 officers.  When the program was launched it was unclear when funds would be received for salary-related costs of officers hired in 2008.


In 2009 the Province issued a cheque for $0.7 million to the OPS to cover the April 2008 to March 2009 costs of the program.  The portion of these funds that relates to 2008 ($467,000) is surplus to the 2009 budget and can be used to offset other cost pressures this year.


g) Overtime & Court Time


The implementation of the new overtime policy has been having a positive impact on overtime expenditures this quarter.  At the time of writing this report, information to end of May is available.  Overtime earnings for January to May were $1.0 million against a budget of $1.1 million (excluding Tamil overtime), generating a year-to-date surplus of $100,000.  For the first 5 months earned overtime hours have decreased approximately 23% when compared to the same period last year.  The forecasted position for year-end is for a $300,000 surplus.  There is also a projected surplus of $80,000 for court time.


h) Fuel Prices


The 2009 budget for fuel was developed assuming an average retail price of $0.90 and an anticipated volume of 2.9 million litres.  As a result of the economic slow down, the average price that the OPS has been paying has dropped to $0.77 per litre, for the first 6 months of 2009. Although, the second half of the year may see higher prices, at this time we are expecting a projected surplus of $200,000 for 2009. Monthly monitoring of fuel prices will continue and an update will be provided in the 3rd quarter report.


i) Vehicle Maintenance


Vehicle maintenance costs is projected to be in a $200,000 surplus position by the end of 2009.  This result is attributable to the Board-approved funding of the capital replacement plan, allowing older vehicles to be replaced prior to incurring significant maintenance costs.


j) Liability Claims


The trend in liability claims filed against the OPS was a positive one in 2008.  This trend has continued into 2009 to date.  This item along with other smaller surpluses will provide the remaining $100,000 surplus.


Horizon Issues


Additional issues that may impact our year-end position are discussed below.


a) Tamil Demonstration Costs


At the direction of the Board, a letter requesting reimbursement from the federal government for the costs of the Tamil demonstration was sent to the Minister of Public Safety on 29 April 2009.  As at the time of writing this report, we have had no response to our request.  Given this, the recovery of funds seems unlikely and we will continue to pursue other options to offset this budget pressure.


b) DART Funding


If funding for the DART Team is received retroactively, this will reduce our forecasted pressure on this item by $150,000/quarter.  However, if funding is delayed further, other sources of funding will need to be identified.


Reporting Requirements


Section 2(e) of the Board’s Policy BC-2 on Monitoring Requirements requires the Chief to provide the Board with information on specific operational issues.  With respect to financial reporting these requirements include:


§         Annex B, which provides a list of all contracts awarded by the Chief that exceed $25,000;


§         Annex C, which provides a summary of the OPS capital budget works in progress.




Not applicable.




The financial implications are contained in this report.




The Police Service is forecasting a deficit for 2009 based on operating results to the end of the second quarter.  The OPS will continue to pursue other options to alleviate the budget pressure largely created by costs incurred related to the Tamil demonstrations.  In October, Financial Services staff will present to the Board the next quarterly report on the Service’s financial position as at 30 September 2009.  It will provide an update on these issues and identify new pressures or solutions that have emerged.  The year-end forecast will be adjusted accordingly.




(original signed by)


Kathy Murray

Director of Finance





(original signed by)


Jimmy Mui

Executive Director, Corporate Support




(original signed by)


Sandra Arsenault

A/Director General




(original signed by)


Vern White

Chief of Police



Attach. (3)


Annex A: Second Quarter Financial Report Summary by Directorate

Annex B: Purchase Orders Issued Under Delegated Authority

Annex C: Capital Budget Works in Progress






Text Box: 9



Text Box: ANNEX B











Chief’s report dated 17 July 2009



Member McRae referenced page 67 of the agenda and the chart entitled “2009 Projected Year End – Significant Variances”.  The inclusion of the Tamil demonstration costs creates a potential operating deficit.  She expressed frustration that all the good work done by staff to address costs such as overtime and court time are going to be wiped out because of the demonstration. 


Member McRae suggested the Board may wish to ask the Chief to meet with the Federal Minister to discuss the status of the Board’s 29 April 2009 letter requesting reimbursement.  She asked the Chief if he had any advice on how the Board could assist him.  The Board has been very outspoken regarding this matter; the Board’s Finance and Audit Committee also discussed it.  Member McRae felt that taxpayers’ money should be used for local policing and not for dealing with issues the City did not create.


Chief White suggested the Federal Government would argue this was a local policing matter, as it did not take place on federal jurisdiction.  He agreed that funding should be received to assist with policing the Nation’s Capital and that perhaps the Government would also argue that the $2 million it has already promised is exactly for this purpose.  He viewed this as a one-time occurrence similar to the NHL Playoffs that the Federal Government did assist in funding.  The Chief agreed the Federal Government should have some responsibility in this matter and it should be shared across the country.  He indicated he would be requesting a meeting with Minister of Finance Flaherty.  The Chief reiterated that he does not have an issue with asking for reimbursement, however, he noted Ottawa was not the only city with a demonstration and the Government may not be willing to give something to Ottawa. 


Member McRae stated there is a need to have honest dialogue with our federal and provincial partners so that they are aware of how this pressure hurts the Service.  The 2010 budget will be tabled within the next three months and despite the great strides that have been made internally to reduce costs, this Board must go out to the community with a deficit budget that was not of their making.  Member McRae stated it may be incumbent on elected officials to lobby or speak with federal members across the city. 


Member McRae proposed that this report be forwarded to City Council for information, and suggested that the report also indicate the Board has given direction to the Chief to pursue government funding for the costs incurred as a result of the Tamil demonstrations.





Moved by M. McRae


That the Ottawa Police Services Board forward this report to City Council for information.




That the Ottawa Police Services Board receive this report for information.