BACKGROUND

Policy CR-4 of the Ottawa Police Services Board Policy Manual, Asset Management, requires that, on a yearly basis, the Chief shall:

1. Provide a report to the Board listing the assets assigned to the OPS and their Net Book Value; and

2. Report on one category of real assets on a rotational basis to include:

a. Value

b. Expected useful life

c. Annual maintenance cost

d. Replacement plan

e. Disposal options.

Additionally, the Chief is required, under Policy CR-4, to monitor and report on unusual risk management trends related to assets.

This report provides the requested information with respect to the 2011 fiscal year. IT/Telecommunication equipment was chosen as the category of real assets for the purpose of this year’s report.

DISCUSSION

Municipal Accounting Requirements for Assets

Municipalities are required to prepare financial statements in accordance with generally- accepted accounting principles for local governments, as recommended by the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants.

Prior to 2009, most municipalities in Canada, including the City of Ottawa, did not include fixed assets on their balance sheets, consistent with recommendations from the PSAB. Depreciation was neither calculated nor incorporated into calculations of net book value of assets.

In June 2006, the PSAB approved PS 3150, which required municipalities to report Tangible Capital Assets (TCA) on their Statement of Financial Position effective January 1, 2009. Additionally, the guideline required that tangible capital assets be amortized on the Statement of Operations.

Beginning in 2009, the City of Ottawa implemented Tangible Capital Assets Reports (TCAR) in order to identify assets and their net book value. This implementation yielded a list of assets assigned to the Ottawa Police Service (OPS) and their associated net book values.

Net book value represents the original cost of the assets less depreciation.

Total OPS Assets – 2011

Annex A summarizes the assets assigned to the OPS and the associated net book value for the 3-year period 2009 to 2011, according to information provided by the City of Ottawa. The assets are divided into five (5) categories and have a total net book value of $59.6 million at December 31, 2011. This is a decrease of $0.4M from 2011.

IT/Telecommunication Equipment - 2011

Annex B provides a summary of the IT/Telecommunication equipment that is assigned to OPS. It includes the net book value as provided by the City of Ottawa, expected useful life and the annual maintenance cost. The net book value of this type of equipment is $0.7 million at December 31, 2011. This figure seems quite low; however, note that this is not an all-inclusive list of IT assets as TCAR reporting only tracks those assets with a value greater than $5,000 per unit. This definition therefore excludes the majority of IT assets such as desktop PCs, laptops PCs, printers, faxes and other electronic devices under $5K. As well, many of these higher cost IT assets are fully depreciated or close to the end of their useful life.

Annual maintenance for this type of equipment typically consists of service contracts for key pieces of equipment. For telecommunication equipment, the Ottawa Police Service also pays TELUS to provide a dedicated Service Technician on site every working day. Telecommunications is a mission-critical system used at OPS, creating the need to have this specialist on site. For some IT equipment, there are no standing maintenance agreements. Instead, the items are fixed by the appropriate vendor on a time and materials basis; otherwise, they are replaced.

The 10-year capital forecast contained in the 2012 budget illustrates the commitment to the regular replacement of this type of equipment. Please see the 2012 budget posted on the organization’s website for more details:

http://www.ottawapolice.ca/Libraries/Publications/2012_draft_budget_web.sflb.ashx.

With regard to the disposal of these assets, some equipment may qualify for a trade-in on a new purchase. Otherwise, they are disposed of through a secure process. The assets are sent to either a charity (CompuCorps) or an electronic waste recycler after hardware/software information is removed. All electronic information has been cleaned from the equipment before recycling or disposal occurs.

Unusual Risk Management Trends/Horizon Issues

As the bulk of these assets have reached or are very near the end of their useful life cycle, special emphasis has been placed on the upgrading of the telecommunication network infrastructure and equipment over the period 2012 to 2014. Also, generally speaking, keeping abreast of emerging technological trends is always considered a horizon issue.

CONSULTATION

Consultation beyond OPS staff is not deemed necessary since this report is for information only.

FINANCIAL STATEMENT

This report has been prepared for information only in order to comply with the Board Policy; therefore, there are no financial implications.

CONCLUSION

This report satisfies the reporting requirements in accordance with OPSB Board Policy CR-4, Asset Management.

(original signed by)

Charles Bordeleau

Chief of Police

Attach. (2)

Annex A: Summary of 2011 Assets

Annex B: IT/Telecommunication Equipment – Summary Report