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REPORT RAPPORT |
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REPORT RAPPORT |
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DATE:
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2 March 2011 |
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TO:
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Executive Director, Ottawa Police Services Board |
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FROM:
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Chief of Police, Ottawa Police Service |
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SUBJECT: |
2011 DRAFT OPERATING AND CAPITAL BUDGETS: SUPPLMENTARY INFORMATION
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RECOMMENDATION
At the Police Services Board meeting on 19 January 2011, the 2011 Draft Operating and Capital Budgets were tabled. At that meeting, staff indicated that it would provide additional information on the following two items prior to the Board’s consideration and approval of the budgets on 7 March 2011:
1. A detailed list of “Across the Service” reductions totalling $1.1 million; and
2. A revised Capital Plan which reflects the impact of the 2.5% police tax rate increase during the term of this Board.
The accompanying Annexes provide the detail of these information items. Annex A-11 summarizes the $1.1 million “Across the Service” reductions. Annex B-2 - “2011 to 2020 Capital Forecast” for the 2011 to 2014 period has been revised to reflect the impact of a 2.5% police tax rate increase.
DISCUSSION
Board’s Direction for 2011
At the Police Services Board meeting on 20 December 2010, the Board directed staff to table options to achieve the budget direction of a 2.5% Police tax rate increase for 2011 in accordance with Council’s motion.
2011 Operating Reductions Required to Meet Board Direction - $6.1 million
In order to attain the 2.5% Police tax rate increase in 2011, a budget reduction of $6.1 million was required. At the time the draft budget was tabled on 19 January 2011, details of the reductions totalling $5.0 million were presented to the Board but the remaining $1.1 million of “Across the Service” cuts still needed to be identified. Annex A-11 summarizes these reductions.
Finance staff worked with the OPS Directorates to identify these remaining reductions. These reductions were identified based on the following strategies and events:
· Year-end financial results became available and enabled staff to fine tune the budget estimates;
· Additional reductions were achieved from:
o Review of software license and maintenance contracts;
o Review of operating standards in fleet and other areas; and
o Review of year end inventories of materials and supplies.
· Additional revenue arising from confirmed PAVIS funding from the Ontario Government and year-end information on the level of revenue from Police and Criminal Records Checks.
Impact of Board Direction on 2011-2020 Capital Forecast
As explained in the draft budget report, while the Capital Plan for 2011 remained unaffected by the 2.5% tax rate increase requirement, the Plan for 2012-2020 needed to be revised. Assuming a tax rate increase of 2.5% for 2012-2014, debt serviced projects are no longer affordable. Accordingly, debt financed capital projects originally planned for the 2012-2014 timeframe have been regrouped along with other projects planned beyond the current term of the Board. Table 1 summarizes these changes.
Table 1
Revised Timelines for Debt-Funded Capital Projects
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Project |
$M |
%Debt Financing |
Original Plan |
Revised Plan |
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1a |
Greenbank Cladding |
$4.4 |
100% |
2012 |
2015 |
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1b |
Facility Acquisition -South |
$50.0 |
100% |
2012 |
2015 |
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1c |
PDC Expansion |
$10.0 |
100% |
2014 |
2015 |
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2a |
Elgin Re-fit |
$14.0 |
50% |
2014 |
2019 |
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2b |
Greenbank Re-fit |
$2.0 |
50% |
2015 |
2019 |
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2c |
Central Patrol Facility |
$30.0 |
100% |
2015 |
2019 |
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3a |
Swansea Re-fit |
$10.0 |
100% |
2016 |
2023 |
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3b |
Leitrim Re-fit |
$2.0 |
50% |
2016 |
2023 |
The revised Capital Forecast is shown in Annex B-2. This revised forecast assumes that future tax increases will be necessary in order to fund these debt serviced projects, as shown in Table 2.
Table 2
Police Tax Rate Impact to Service
New Debt-Financed Projects
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Police Tax Rate |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
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% Increase for New Debt-Financed Projects |
1.00% |
0.75% |
0.50% |
1.00% |
1.00% |
0.00% |
Annex B-2 presents the revised 2011–2020 Ten-Year Capital Forecast for the Ottawa Police Service by individual project and by category of need. The ten-year gross need totals $221.3 million and reflects the move of Swansea and Leitrim re-fit projects totalling $12.0 million beyond the 10 year forecast to 2023. The capital needs summary is shown in Table 3.
Table 3
($ millions)
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Funding |
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Category |
Gross Need |
Tax |
Revenue |
DC |
Debt |
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Renewal of Assets |
$115.2 |
$108.1 |
$2.7 |
$4.4 |
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Growth |
$59.2 |
$59.2 |
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Strategic Initiatives |
$46.9 |
$28.9 |
$18.0 |
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TOTAL |
$221.3 |
$137.0 |
$2.7 |
$81.6 |
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% Of Total |
62% |
1% |
0% |
37% |
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Deferring the Elgin refit project to beyond the current Board’s term impacts the PAYG reserve fund as this project is only 50% debt financed. As a result, the PAYG fund will increase by $7.0 million by the end of 2014 and remain there until funds are required in 2019. Table 4 shows the revised General Capital Reserve Fund Continuity Schedule.
Table 4
OPS General Capital Reserve Fund Continuity Schedule
($ millions)
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2011 |
2012 |
2013 |
2014 |
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Opening Balance |
$3.0 |
$1.5 |
$5.6 |
$8.7 |
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Sources |
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Tax Base Contribution |
$11.2 |
$11.0 |
$11.0 |
$11.0 |
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Project Closures |
$1.8 |
$0.0 |
$0.0 |
$0.0 |
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Interest Earnings |
$0.0 |
$0.0 |
$0.0 |
$0.1 |
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Total Sources |
$13.0 |
$11.0 |
$11.0 |
$11.1 |
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Uses |
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Project Funding |
$12.4 |
$6.9 |
$7.9 |
$11.6 |
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Contribution to Operations |
$2.1 |
$0.0 |
$0.0 |
$0.0 |
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Total Uses |
$14.5 |
$6.9 |
$7.9 |
$11.6 |
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Ending Balance |
$1.5 |
$5.6 |
$8.7 |
$8.2 |
CONSULTATION
The 2011 Draft Operating and Capital estimates were presented and tabled with the Ottawa Police Services Board on 19 January 2011.
Public consultation on the 2011 Draft Budget occurred during the regular Board meetings on 24 January 2011 and 28 February 2011 in the Champlain Room at City Hall. In addition, OPS staff attended the Multi-Ward Bilingual City Consultation Meetings.
Formal consideration and review of the 2011 Budget will occur at the Ottawa Police Services Board meeting at 9:00 a.m. on 7 March 2011. Approval is also scheduled for that date.
City Council will begin its approval process on 8 March 2011.
Financial implications are presented within the report.
This report supplements the 2011 Draft Operating and Capital Budgets tabled at the Police Services Board meeting on 19 January 2011. It sets out the “across-the-service” reductions of $1.1 million and provides a revised capital project plan which reflects a 2.5% police tax rate increase during the term of the Board.
(Original signed by)
Vern White
Chief of Police
Annex A-11 Detailed Description of Across the Service Reductions
Annex B-2 2011 to 2020 Capital Forecast (Revised)
