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REPORT RAPPORT |
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REPORT RAPPORT |
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DATE:
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21 June 2011 |
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TO/DEST:
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Executive Director, Ottawa Police Services Board |
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FROM/EXP:
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Chief of Police, Ottawa Police Service |
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SUBJECT/OBJET: |
BUDGET PRESSURE - FUEL COSTS
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That the Ottawa Police Services Board receive this report for information.
The Financial Status Report – First Quarter 2011 presented at the Board meeting on 2 May 2011 identified a budget pressure arising from fuel costs. The report indicated a projected deficit of $500,000 for the 2011 fiscal year. Based on fuel and consumption information available at the end of May 2011, the updated deficit projection ranges from $525,000 to $600,000 for the year.
This report will identify the actions that will be taken to help offset the pressure of fuel costs on the budget. As well, there are some positive variances in other operational areas that will help to bring the OPS financial position closer to break-even.
DISCUSSION
Fuel Budget and Prices
The Ottawa Police Service’s 2011 Operating Budget for fuel was estimated using a retail pump price of $1.00/litre, based on guidance provided by the City of Ottawa. This amount is reduced to an effective price of $0.85/litre, after accounting for tax exemptions and discounts through the fuel card program. The budget of $2,382,700 is based on a consumption of 2.7 million litres of fuel for 2011.
The average retail price for regular unleaded gasoline at Ottawa-area self-service filling stations is outlined in Table 1, which shows monthly averages well above the budgeted per litre price:
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Table 1 Average Retail Price of Gasoline in Ottawa Source: Statistics Canada (http://www40.statcan.ca/l01/cst01/econ152g-eng.htm)
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Actions and Variances
Staff is presently examining various mitigating strategies to address the projected fuel deficit.
1) Idle Reduction Technology
In 2009, the Ottawa Police Service became the first police service in Ontario to initiate an idle reduction program for its fleet. On 25 May 2011, the OPS announced a collaboration agreement with the National Research Council for the development of idle reduction technology for police vehicles. Under this agreement, the NRC retains the intellectual property rights for this technology; the OPS gains the right to test it and use it. The OPS plans to have thirty (30) patrol vehicles equipped with this technology by the end of the year. The rest of the patrol fleet will be similarly equipped over the next few years. The technology solution is expected to save up to $2,000 in annual fuel costs per vehicle. Though fuel savings will be limited in 2011, this program has the potential to have a significant positive influence on fuel consumption and costs in 2012.
2) Evidence Disposal Project and Related Activities
As part of a comprehensive review of our Evidence Control Section (ECS) operations, staff is working diligently to reduce the quantity of evidence at the Swansea facility that is past its disposal date. The Board approved funding in the 2011 budget for additional term employees to deal with this backlog of disposal items. Disposal of property and evidence is conducted in accordance with judicial orders and through auction or public tender as outlined in Section 132 of the Police Services Act. In accordance with the Act and Board policy, proceeds are being applied towards the operating budget.
The disposal project is yielding significant results. The one-time revenue resulting from the disposal of the back-log of property and evidence is expected to be in the range of $400,000.
3) Major Collision Investigations
The Board approved an increase in fees for the release of documents and data relating to Major Collision Investigations at its meeting on 2 May 2011. As indicated in that report, the estimated amount of fees generated would be $297,000, based on the 2010 volume of requests. Given a partial year of activity, revenue for 2011 is expected to be $150,000.
Public consultation is not required.
The financial implications are as outlined above.
CONCLUSION
Rising fuel costs are expected to create a fuel budget deficit in the range of $525,000 to $600,000 for the fiscal year 2011. Staff has identified actions and variances totalling roughly $550,000 to help address the fuel pressure. An update on this matter will be provided along with the Second Quarter Financial Status Report, which will be presented to the Board on 25 July 2011.
(Original signed by)
Vern White
Chief of Police
