OPP Costing Analysis. April 3, 2017

Transcription

1 OPP Costing Analysis April 3,

2 Background On January 20, 2014 Orangeville Council decided to request an OPP costing On November 1, 2015, the OPP lifted the moratorium on costings On December 7, 2015, Orangeville Council confirmed wish to receive costing On February 13, 2017, OPP made a proposal/presentation to Orangeville Council On February 13, 2017, Council requested a presentation by OPS On March 6, 2017, Council requested that staff prepare a financial analysis 2

3 Presentation Financial Analysis ONLY Short and Long Term financial analysis of both models Not a service comparison Orangeville Police Service (OPS) has a long history of serving the community since 1864 (153 years) Ontario Provincial Police (OPP) is experienced and currently serves 323 Ontario Municipalities 3

4 OPP Costs How it Works Two Components in a Transfer to OPP: Transition Contract 3 plus years Takeover date to December 31 (in first year) Plus 3 full calendar years OPP Billing Model Thereafter 4

5 OPP Transition Contract 3 plus years OPP made a presentation of and explained the transition contract on February 13, 2017 Enter an agreement for a defined number of contractual hours of service Represented by: Uniform Full Time Equivalent (FTE) FTE Civilian FTEs 10 FTE 5

6 OPP Transition Contract 3 plus years (continued) OPP fills and funds all vacant FT positions OPP would restructure some positions Adds 2 Full-Time (FT) Civilian Detachment Admin Clerks Replaces 6 Part-Time (PT) Court Security positions with 3 FT positions Eliminates 10 FT and 6 PT Dispatch/Civilian Data Entry positions 6

7 OPP Billing Model Year 4 and beyond The Game Changer comes after the Transition Contract period Entirely different billing model Economies of Scale Advantage (323 other municipalities) Local costs uploaded to the province and redistributed Significant annual savings of more than $4.5M/year expected under the Billing Model 7

8 OPP Billing Model Year 4 and beyond (continued) Billing Model Difference Transition Contract (old model): Pay based on FTE plus various other supporting costs Billing Model (new model): Pay based on: Base per property cost Service Calls Overtime and Court Security/Prisoner Transportation Enhancements (if any requested) 8

9 OPP Billing Model Year 4 and beyond A few notes: Total Policing costs attributable to municipalities for the Province are spread based on: fixed base charges usage charges Costs published for all municipalities exclude certain municipal costs and offsetting revenues Can t simply compare to a municipality s budget Cost versus Net Cost will be discussed in the next slides 323 municipalities policed by OPP condensed to 289 for billing purposes (i.e. some are Counties or Townships which include small towns). 9

10 Cost per Property vs Net Cost per Property Cost per Property All OPP serviced municipalities have costs per property posted on the OPP website in one central location (289 municipalities) transparent quick comparison These are not net costs to the municipality: They exclude certain costs such as Police Service Board expenses and in most cases, would exclude facility maintenance and renewal. They also exclude all revenues such as grants and those generated by the service (reports, record checks, etc.). 10

11 Cost per Property vs Net Cost per Property (continued) Net Cost per Property Usually not calculated and disclosed by each individual municipality Annual budgets and financial reporting tend to value totals rather than on a property count basis as defined by the OPP Billing Model Net cost per property represents the overall net cost of policing divided by the number of properties as defined by the OPP Billing Model. 11

12 Cost per Property vs Net Cost per Property (continued) This presentation For comparison purposes, cost per property as defined by and reported by the OPP has been used throughout the presentation Provides ability for anybody to quickly/easily compare to others information that is publicly available Orangeville s cost per property has been calculated using the OPP s defined billing model approach compare apples to apples and hopefully reduce confusion The overall net impact to the municipality under each model is shown separately for a total $ analysis 12

13 Key Estimates: One-Time One-Time Severance Facility and Technology Changes Proceeds on Disposal of Vehicles and Equipment Timing of Disbandment 13

14 One-Time Estimate One Time Items: Uniform and Equipment - Year One Adjustment ($78,057) Uniform, Equipment and Vehicle Initial Costs $985,126 Communication Equipment Initial Cost $30,000 Facility and Technology Changes $500,000 Disposal of Vehicles/Equipment ($100,000) Severance $2,424,856 Total One-Time Items $3,761,925 14

15 15

16 Severance Estimate: One-Time Severance based on positions illustrated in previous slide/proposal by OPP Some unknowns include: Will some of the eliminated positions be offered some of the new positions? Background Investigations Rank Level Determination Amount of Severance negotiated/or arbitrated Estimated at $2.4M which includes approx. $900K of contingency 16

17 Facility Estimate: One-Time Facility changes have not yet been fully costed Options and detailed cost estimates are being worked on Most items are fairly minor Town may want to consider addressing some of these items regardless of which police force operates from the facility Preliminary Estimated costs are between $200K-$300K Estimated a contingency of $200K bringing the estimated changes to $500K 17

18 Proceeds on Disposal of Vehicles and Equipment Estimate: One-Time Would be disposing of all vehicles and Equipment Assets have value but have not been individually appraised. Conservatively estimated $100K in proceeds on disposition given that approx. $1M spent on assets since 2015 plus vehicles and various equipment on hand. 18

19 Timing of Disbandment Estimate: One-Time Timing of decision by Council and process through to a transition estimated at 6 months While a One-time item, the timing is crucial to overall cost to the municipality Could delay moving to the Billing Model stage by a year 19

20 Key Estimates Ongoing Ongoing items in both OPP and Orangeville Police Service Models estimated to be the same in both: Police Service Board Expenses Police Building/Property maintenance costs Grant Revenues Inter-Departmental transfers have been removed Added contracting out Dispatch costs for Fire/PW Note: while these are not policing costs they are included here as a cost to the municipality Reduced miscellaneous revenue expectations by $100K/year Added $100K/year contingency 20

21 Other Estimates Province wide Figures ( ): Average annual increase in property Count = 1.41% Average annual increase in total costs charged to municipalities = 1.0% Average annual decrease in per property costs = 0.4% Town growth is approx. 1% year Conservatively estimated an annual 3% total cost increase with OPP 21

22 Other Estimates Orangeville Police Services Orangeville Police Services Actuals vs Budget 2016 Fiscal Year 2015 Fiscal Year 2014 Fiscal Year Actual Budget Variance Actual Budget Variance Actual Budget Variance Total Expenses $9,061,972 $9,451,422 $389,450 $9,241,657 $9,326,813 $85,157 $9,163,825 $9,055,791 ($108,034) Total Revenues ($1,187,130) ($1,176,160) $10,970 ($1,146,285) ($1,051,552) $94,732 ($1,095,064) ($924,153) $170,911 Net Costs $7,874,841 $8,275,262 $400,421 $8,095,372 $8,275,261 $179,889 $8,068,761 $8,131,638 $62, % 0.0% 0.3% 1.8% 5 Year Budget Budget Budget Budget Budget Budget Total Expenses $9,765,451 $10,215,899 $10,523,711 $10,779,949 $10,964,407 Total Revenues ($1,558,121) ($1,714,825) ($1,766,270) ($1,819,258) ($1,873,836) Net Costs $8,207,330 $8,501,074 $8,757,441 $8,960,691 $9,090, % 3.6% 3.0% 2.3% 1.4% 22

23 So, what does it cost under the OPP Billing Model? Depends. But the average is: Base costs per property (same across entire province) $191/property Average service call portion $130/property Average other costs $33/property Total average costs $354/property 23

24 OPP service municipalities Cumulative Per Property Costs # of Municipalities % of Total Per Property Costs # of Municipalities % of Total Less than $ % Less than $ % Between $301-$ % Less than $ % Between $351-$ % Less than $ % Between $401-$ % Less than $ % Between $451-$ % Less than $ % Between $501-$ % Less than $ % Between $551-$ % Less than $ % Between $601-$ % Less than $ % Totals % 24

25 Dufferin OPP Costs per Property OPP $323 OPP $300 OPP OPP $324 OPP $349 $290 OPP $306 Orangeville Police Services. Per property = $864 25

26 So, where do we fall? Base cost is the same for all Service Calls Volume and Severity Some calls are chargeable and others are non-chargeable Other Costs could include: Court Security/Prisoner Transportation Overtime Enhancements Accommodation 26

27 Crime Severity Index (CSI) and Cost Correlation $800 Crime Severity Index and Cost Correlation $700 $ Cost per Property $500 $400 $ cost Linear (2017 cost) $200 Orangeville Average CSI Ranking = $361/property. $100 $ Average CSI Ranking 27

28 Billing Model Property Cost used in Estimate OPP Billing Model Used in Estimates Provincial Average Over Average Base Cost per Property $ $ $ 0.00 Other Costs $ $ $ Estimated Service Call % of Total $ $ $ Estimated Total Cost per Property $ $ $ % of Municipalities that pay less than estimate used 87% Above Avg 17% Per Property Costs Less than $300 Between $301-$350 Between $351-$400 Between $401-$450 Between $451-$500 Between $501-$550 Between $551-$600 Between $601-$785 # of % of Municipalities Total 41% 34% 9% 8% 3% 4% 1% 1% Per Property Costs Less than $300 Less than $351 Less than $401 Less than $451 Less than $501 Less than $551 Less than $601 Less than $786 Cumulative # of Municipalities % of Total 41% 74% 84% 91% 95% 99% 99% 100% Totals % 28

29 Billing Model Calculation Used i n Per 2017 Provincial Calc' d over OPP Billing Model Estimates % of Bill Average $ (under) Avg Base Cost per Property $ % $ $ 0.00 Other Costs $ % $ $ Esti mated Servi ce Call $ % $ $ Esti mated Total Cost per Property $ % $ $ # of Properties Residential 10,718 Commercial Occupied 444 Industrial 39 Farm 1 11,202 Yr 1 Esti mated OPP Billi ng Cost $ 4,657,110 29

30 OPP Financial Analysis:Transition Contract & Billing Model OPP 3+ Year Contract OPP Billi ng Model 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% OPP Net Costs Esti mated Gross Polici ng Costs ( OPP Di rect ) $7,816,621 $8,051,120 $8,292,653 $8,541,433 $5,241,618 $5,398,867 $5,560,833 $5,727,658 $5,899,487 Other Impacts Other Operati ng Expenditures $323,933 $333,338 $343,025 $353,002 $363,279 $373,865 $384,767 $395,997 $407,564 Less Revenues ($1,104,583) ($1,238,681) ($1,238,681) ($1,238,681) ($1,238,681) ($1,238,681) ($1,238,681) ($1,238,681) ($1,238,681) Annual Capital Repl acement Costs $112,779 $115,035 $117,336 $119,682 $122,076 $124,517 $127,008 $129,548 $132,139 Annual Contingency $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 Total other impacts ($567,871) ($690,309) ($678,321) ($665,997) ($653,326) ($640,299) ($626,906) ($613,136) ($598,979) Annual Net Costs bef ore One-Time Items $7,248,750 $7,360,811 $7,614,332 $7,875,436 $4,588,292 $4,758,567 $4,933,926 $5,114,521 $5,300,509 1st Year Adj usment f or # of Months ($6,040,625) $1,208,125 One-Ti me Costs $ 3,761,925 Total OPP Annual Costs $4,970,050 $7,360,811 $7,614,332 $7,875,436 $4,588,292 $4,758,567 $4,933,926 $5,114,521 $5,300,509 30

31 Orangeville Police Financial Analysis Orangevill e Poli ce Servi ces Net Costs Per Approved Budget Budget Forecast 3.6% 3.0% 2.3% 1.4% 2.0% 2.0% 2.0% 2.0% Orangevill e Poli ce Servi ces Budget $8,207,330 $8,501,074 $8,757,441 $8,960,691 $9,090,571 $9,272,383 $9,457,830 $9,646,987 $9,839,927 Adj ustments (Appl es to Appl es Cost) Less Transf ers to Capital or Reserve ($181,746) ($171,766) ($221,716) ($224,384) ($148,340) ($151,307) ($154,333) ($157,420) ($160,568) Esti mated Annual Capital Repl acement Costs $ 385,063 $ 392,764 $ 400,619 $ 408,632 $ 416,804 $ 425,141 $ 433,643 $ 442,316 $ 451,163 Annual Capital Repl acement Costs $203,317 $220,998 $178,903 $184,248 $268,464 $273,833 $279,310 $284,896 $290,594 Annual Net Costs bef ore One-Time Items $8,410,648 $8,722,071 $8,936,344 $9,144,940 $9,359,036 $9,546,216 $9,737,141 $9,931,883 $10,130,521 1st Year Adj usment f or # of Months ($7,008,873) $1,401,775 Total Orangevill e Poli ce Servi ces Annual Costs $1,401,775 $8,722,071 $8,936,344 $9,144,940 $9,359,036 $9,546,216 $9,737,141 $9,931,883 $10,130,521 31

32 Summary Financial Analysis - $416/property OPP 3+ Year Contract OPP Billi ng Model Total OPP Annua l Costs $4,970,050 $7,360,811 $7,614,332 $7,875,436 $4,588,292 $4,758,567 $4,933,926 $5,114,521 $5,300,509 Total Orangevill e Poli ce Servi ces Annua l Costs $1,401,775 $8,722,071 $8,936,344 $9,144,940 $9,359,036 $9,546,216 $9,737,141 $9,931,883 $10,130,521 Annual Cost (Savings) $3,568,276 ( $1,361,260 ) ( $1,322,012 ) ( $1,269,504 ) ( $4,770,744 ) ( $4,787,649 ) ( $4,803,214 ) ( $4,817,362 ) ( $4,830,012 ) Cumulati ve Cost (Savings) $3,568,276 $2,207,015 $885,003 ( $384,500 ) ( $5,155,244 ) ( $9,942,893 ) ( $14,746,107 ) ( $19,563,469 ) ( $24,393,481 ) 32

33 Billing Model Estimate - Notes Estimate used in calculations of $416/property is in-line with Collingwood and Leamington which have lower CSI scores which suggest they have more calls for service than Orangeville 87% of OPP policed municipalities pay less than $416/property 33

34 Analysis Using Range of Property Costs below current estimate OPP 3+ Year Contract OPP Billi ng Model 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Average Ontario $ 354 $ 354 $ 365 $ 376 $ 387 $ 398 $ 410 $ 423 $ 435 $ % of Municipaliti es below thi s amount OPP 4,970,050 7,360,811 7,614,332 7,875,436 3,809,888 3,956,811 4,108,118 4,263,938 4,424,408 Orangevill e Poli ce Service $ 1,401,775 8,722,071 8,936,344 9,144,940 9,359,036 9,546,216 9,737,141 9,931,883 10,130,521 Annual Cost (Savings) $3,568,276 ($1,361,260) ($1,322,012) ($1,269,504) ($5,549,147) ($5,589,405) ($5,629,023) ($5,667,945) ($5,706,113) Cumul ated Cost (Savings) $3,568,276 $2,207,015 $885,003 ($384,500) ($5,933,648) ($11,523,053) ($17,152,076) ($22,820,021) ($28,526,133) % o f Municipaliti es bel ow this amount $ 401 $ 401 $ 413 $ 425 $ 438 $ 451 $ 465 $ 479 $ 493 $ 508 OPP 4,970,050 7,360,811 7,614,332 7,875,436 4,402,462 4,567,162 4,736,779 4,911,460 5,091,355 Orangevill e Poli ce Service $ 1,401,775 8,722,071 8,936,344 9,144,940 9,359,036 9,546,216 9,737,141 9,931,883 10,130,521 Annual Cost (Savings) $3,568,276 ($1,361,260) ($1,322,012) ($1,269,504) ($4,956,574) ($4,979,054) ($5,000,362) ($5,020,424) ($5,039,166) Cumul ated Cost (Savings) $3,568,276 $2,207,015 $885,003 ($384,500) ($5,341,074) ($10,320,128) ($15,320,490) ($20,340,913) ($25,380,079) 34

35 Analysis Using Range of Property Costs above current estimate OPP 3+ Year Contract OPP Billi ng Model 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% % o f Municipaliti es bel ow this amount $ 451 $ 451 $ 465 $ 478 $ 493 $ 508 $ 523 $ 539 $ 555 $ 571 OPP 4,970,050 7,360,811 7,614,332 7,875,436 5,032,859 5,216,471 5,405,568 5,600,312 5,800,873 Orangevill e Poli ce Service $ 1,401,775 8,722,071 8,936,344 9,144,940 9,359,036 9,546,216 9,737,141 9,931,883 10,130,521 Annual Cost (Savings) $3,568,276 ($1,361,260) ($1,322,012) ($1,269,504) ($4,326,176) ($4,329,745) ($4,331,573) ($4,331,571) ($4,329,648) Cumul ated Cost (Savings) $3,568,276 $2,207,015 $885,003 ($384,500) ($4,710,677) ($9,040,421) ($13,371,994) ($17,703,566) ($22,033,213) % o f Municipaliti es bel ow this amount $ 501 $ 501 $ 516 $ 532 $ 547 $ 564 $ 581 $ 598 $ 616 $ 635 % of Municipaliti es below OPP 4,970,050 7,360,811 7,614,332 7,875,436 5,663,257 5,865,781 6,074,356 6,289,164 6,510,391 Orangevill e Poli ce Service $ 1,401,775 8,722,071 8,936,344 9,144,940 9,359,036 9,546,216 9,737,141 9,931,883 10,130,521 Annual Cost (Savings) $3,568,276 ($1,361,260) ($1,322,012) ($1,269,504) ($3,695,779) ($3,680,435) ($3,662,784) ($3,642,719) ($3,620,130) Cumul ated Cost (Savings) $3,568,276 $2,207,015 $885,003 ($384,500) ($4,080,279) ($7,760,714) ($11,423,499) ($15,066,218) ($18,686,348) 35

36 Other Considerations Legal Fees risk uploaded to province WSIB cost reductions not estimated Municipal staffing resources freed up 36

37 Recap Presentation is a Financial Analysis ONLY and not a Service comparison Analysis contains significant contingencies Significant one-time initial costs will be incurred and recovered during the Transition period Under the Billing Model following the Transition period, significant annual savings of more than $4.5M per year are anticipated to be realized 37

38 Questions? 38