POLICE SERVICE STUDY

KEY CONCLUSIONS FROM POLICE STUDYThe Status Quo is a very poor option for the Espanola Police ServiceEspanola has extremely high expenditures and after grant policing costs will rise by about 9.81% per year thru 2016 Espanola has relied on receiving a very large OMPF Police Services Grant. This grant rewarded communities with very high policing costs and punished those with low costs.This grant has been changing at it has replaced by a Transitional Assistance Grant. This grant has major implications for Espanola because it no longer favours communities with high policing an ever increasing sum of money. It also doesnt penalize Espanola for reducing policing expenditures.

The town can significantly reduce the burden on taxpayers through a combination of cost reduction and increased revenue. Reduce costs by contracting services from other jurisdictions. (Dryden saved $700,000/Yr. doing this)Contracting Police Services to other communities like Nairn and Baldwin. This makes economic sense only if this can be done without adding manpower. The revenue from contracting this service is entirely dependant on their cost for OPP service. The newly proposed 2015 Proposed OPP Cost Model can have a severe impact on this revenue.This also spreads out the current force. To do the Policing of nearby communities one or more constables will be outside the community about 1/3 the time.Large Police services like Sudbury and the OPP can provide superior savings. Large savings are achieved even with the same number of uniform officers.The cost neutral Transitional Assistance Grant improves the economics of their service

Residents would experience an improvement in the quality of policing from either Sudbury or the OPP.Crime statistics for Sudbury and the OPP are better than Espanolas.Residents of all police services reported equally high levels of satisfaction.Response times would remain unchanged.Larger forces have more extensive resources and knowledge.

Cost Control for larger police services like Sudbury and the OPP have been much more effective than Espanola and other small communities with municipal forces.In the nine years from 2002 thru 2011, Espanola controlled expenditures growth to an average of 8.73%. Sudbury was 6.91%, and a group of twelve equal size (population) communities with OPP service averaged 5.16%.The 2015 OPP Cost Model as it is currently proposed will result in the following:Reduce the savings from contracting police service to Nairn & Baldwin. (Their costs will drop)Lower 2015 OPP costs for Espanola.

Status Quo Key Points-Extremely high expenditures typical of small municipal police forces- Costs and cost containment reasonable compared to peers.-OMPF cost dependent grants have changed 13% cut thru 2016. -A cost neutral Transitional Assistance Grant has replaced the OMPF grant (Major impact on Espanolas cost structure in relation to others)

1(ESPANOLA SAVINGS WITH OPP BASED ON PERTH PROJECTED SAVINGS WITH OPP)ESPANOLA 2011 ACTUAL $/YRPERTH 2011 ACTUAL $/YRPolicing Expenditures$2,344,561$2,906,319Population5,364 6,273 Total Grants & Revenues$982,475$1,284,288Net Yearly Policing Cost Per Person after Grants & Revenues$253.93$258.57OPP Savings $/YR for first 10 years $651,581$762,000 Savings $/YR/Person for first 10 years with OPP$121.47$121.47 Savings for first 10 years with OPP$6,515,811 (~$8,200,000)$7,620,000 ($9,620,000)1. Since Perths costs were close to Espanola, used Perth savings of $121.47/yr. to calculate the expected savings for Espanola with OPP service.2. If Espanola experienced similar savings per person we could potentially save $6.516 million over 10 years. This doesn't include any differences in the severance between Espanola & Perth. Their savings calculation hadnt included the recent development that the OMPF Transitional Grant has replaced the Police Services Grant. They will no longer be penalized $2 million for having lower costs via their OPP Service. This will significantly improve their savings.3.Savings data were taken from Perth website containing reports with Policing comparison cost projections.Perth Before OPPPerth After OPPPolice Chief1 -full time.09Inspector/Admin S/Sgt1-full time.09Sergeants22Constables1111Court Security2-full time 1-part Time2-Full time 1-Part TimePERTH 10 YEAR SAVINGS = $9.6 MILLION WITH ZERO CHANGE IN FRONT LINE POLICING STAFFPerth maintained the same number of uniform officers and after two years they plan to review their call for service history to see if it makes sense to adjust their manpower downwards to save additional money. They just did a financial review and they are on target for their projected savings. All municipal police were offered employment and many were happy at the prospects of joining the OPP. Each month since the switch to OPP they have a meeting with council and review the most serious calls for service to show how quickly they responded and how the situations were handled.

2ESPANOLA 2013 POLICE SERVICEESPANOLA 2013 DRAFT POLICE BUDGET% OF ESPANOLA TOTAL POLICE BUDGET % OF TOTAL OF TYPICAL LARGE POLICE SERVICE ADMINISTRATIONMain office operations$1,900 Police Service Board$16,900 Administration & Officer Operations$284,500 Civilian Personnel (Handle one 911 call each 2.85 hrs.)$440,280 SUBTOTAL:$743,58030.62%9.00%PROTECTION ACTIVITIESUniform Salaries & Benefits (9 constables)$1,076,60044.34%Uniform Salaries & Benefits (2 sergeants)$265,40010.93%SUBTOTAL:$1,342,00055.27%78.5%OTHER DIRECT OPERATING EXPENSES Subtotal$342,60014.11%12.5%Overall Total Expenditures$2,428,180100%100%RatioRatioRatio of civilians to all personnel41.67%12.32%Ratio of Sergeants to Constables22.20%12.94%Ratio of people above sergeant level to all uniforms8.33%1.76%The small size of Espanola's Police Service is a huge detriment to the efficient use of resources and thus cost. High administrative costs in particular are a problem. (Civilian and Chief costs.) This is why Perth saved the money they did by switching to OPP, even thought there was no change in the number of uniform officers.ANALYSIS OF COST 2013 POLICE SERVICE BUDGET FOR ESPANOLA(WHY DOES OPP HAVE LOWER COSTS?)

3This table shows the 12 communities of equal population that were used to estimate a cost of OPP service for Espanola. These communities had OPP service for many years so they are a good benchmark to use to estimate what cost levels Espanola might incur with OPP policing. Actual costs for 2012 were collected and averaged to get a 2012 OPP cost for Espanola of $1,199,657. This value was then increased to $1,285,708 to account for inflation to establish a OPP forecast for 2015.The OPP is in the process of changing its 2015 Community Policing Cost Model. This change is generally going to reduce the cost of communities with costs over $400 per household and increase costs for those under $300. The current proposal calls for $369/household. For this exercise a number of $400 per household was used to estimate how this current proposal would affect the cost of OPP policing for these communities and Espanola under OPP service. The overall change in the average costs are small. ($1,285,708 versus $1,276,967) but as you can see, the yellow shaded communities will experience a sharp increase in costs. The reason for this is they have a very high proportion of households, likely vacation homes and the proposed costs are based on the number of households. Espanola costs under OPP service would be 24% lower. ($976,000 versus $1,285,708) Nairn and Baldwin would see a substantial reduction in costs and this would reduce the potential revenue Espanola could charge for providing police service to them. If the current 2015 OPP Cost Model remains unchanged, the savings from OPP policing would rise dramatically. A savings was forecast using $976,000 yearly cost for Espanola to show how the proposal might affect Espanola.BENCHMARK COSTS FOR 2012 OPP COSTS FOR ESPANOLA AND THE IMPACT OF PROPOSED 2015 NEW OPP COST MODEL ON 2015 OPP COSTS2012 Costs OPPPOPULATIONHOUSEHOLDS2012 ACTUAL OPP COSTS $/YEAROPP FORECAST FOR 2015 PRORATED FROM 2012 COSTS $/YEARCURRENT PROPOSAL FOR 2015 OPP COST MODEL $/YEAR% CHANGE WITH PROPOSED 2015 OPP COST MODELCramahe TP5,3642,700$1,173,434$1,370,721$1,080,000-21%Galway-Cavendish Harvey5,2847,637$1,087,258$1,270,057$3,054,800141%Havelock4,6374,272$856,892$1,000,960$1,708,80071%Hearst4,7302,517$1,486,191$1,736,061$1,006,800-42%North Huron4,8842,275$1,163,967$1,359,662$910,000-33%North Middlesex6,2062,596$879,835$1,027,760$1,038,4001%Ontonabee-South Monaghan6,0803,075$1,222,161$1,427,640$1,230,000-14%Parry Sound6,1912,925$2,148,080$2,509,232$1,170,000-53%Petrolia5,5282,297$870,882$1,017,302$918,800-10%South Bruce M5,6852,423$759,008$886,618$969,2009%Southwest Middlesex5,8602,515$747,548$873,232$1,006,00015%Tweed4,9803,077$812,627$949,252$1,230,80030%AVERAGE OF THESE OPP SERVICES 5,452 3,192 $1,100,657$1,285,708$1,276,967-1%OPP POLICING OF ESPANOLA 5,3642440$1,100,657$1,285,708$976,000-24%ESPANOLA MUNICIPAL POLICE$2,626,000

4TABLE 7:(POSSIBLE SAVINGS FROM OPP POLICING IN ESPANOLA ($000)ESPANOLA POLICE -Status Quo20132015201620172018201920202021202220232024Policing Expenditures ($000)$2,428$2,626$2,731$2,840$2,954$3,072$3,195$3,323$3,456$3,594$3,738Conditional Grants/ Revenue ($000)$172$168$175$182$190$197$205$213$222$231$240OMPF Police Grant ($000)$892$796$769$800$832$865$900$936$973$1,012$1,053Net Police Spending after grants $000$1,364$1,662$1,787$1,858$1,933$2,010$2,090$2,174$2,261$2,351$2,445Ratio of revenue to expenditures39.6%32.4%30.1%30.1%30.1%30.1%30.1%30.1%30.1%30.1%30.1%OPP ESTIMATE20132015201620172018201920202021202220232024Policing Expenditures ($000)$1,189$1,286$1,337$1,391$1,446$1,504$1,564$1,627$1,692$1,760$1,830Conditional Grants/Revenue ($000)$12$14$14$15$15$16$16$17$18$18$19OMPF Police Grant Now a Transitional Assistance Grant ($000)$399$796$769$414$431$448$466$484$504$524$545Net Spending after grants ($000)$777$477$554$962$1,000$1,040$1,082$1,125$1,170$1,217$1,266Yearly OPP Policing Savings $0$1,185,000$1,233,000$896,000$932,000$969,000$1,008,000$1,049,000$1,090,000$1,134,000$1,179,000Accumulated Savings OPP (12 aver) if cost dependent grant returns ($000)$0$1,185$2,418$3,315$4,247$5,216$6,224$7,273$8,363$9,498$10,677Accumulated Savings if OMPF grants remain cost neutral (DOLLARS)$1,185,000$2,418,000$3,700,000$5,034.0006.421,0007,863,0009,363,00010,923,00012,545,00014,233,000Ratio of OMPF revenue to net expenditures 34.0%62.5%58.1%30.1%30.1%30.1%30.1%30.1%30.1%30.1%30.1%These savings are based on 12 long time communities with OPP forces with a similar population to Espanola. These communities have been with the OPP for a long period. Their cost structure is close to what Espanola could likely achieve over the long term. Their 2012 costs for OPP service were used to establish a 2013 baseline for the financial forecasts. Please note the significant improvement in the savings if the OPMF grant remains cost neutral.These OPP communities have experienced very good long term cost containment via the OPP. They had 5.13% average yearly cost increases compared to Espanolas 8.73% over the 2002 thru 2011 period.The twelve OPP communities were selected from a larger group of over 40 communities strictly on the basis of their being close to Espanolas population. They in fact service on average a higher number of households in their communities than Espanola does.

5You can reduce costs significantly without reducing uniform officers in the field or response times. The long term ideal OPP cost structure does have fewer uniforms but this doesnt mean that when one uniform leaves the community the other doesnt stay. Residents of those communities are very satisfied with the quality of their OPP police service. The ratio of civilian staff to total personnel and ratio of sergeants to constables are both much lower with OPP.STRUCTURE OF ESPANOLA VERSUS OPP BUDGETEspanola's 2013 Budget with and without OPPESPANOLA 2013 Draft BudgetEspanola Forecast Budget 2015OPP Average of 12 equal size towns 2015OPP with 9 officers and 1 Sergeant 2015OPP with today's uniforms 2015Proposed OPP Cost Model 2015ADMINISTRATION COSTS: SUBTOTAL: $743,580$804,256$115,804$149,959$166,415 Administration portion of (% of total budget)30.62%30.62%9.00%9.00%9.00%?PROTECTION ACTIVITIES:Uniform Salaries & Benefits - Constables$1,076,600$1,164,451$896,000$1,164,451$1,164,451 Uniform Salaries & Benefits - Sergeants$265,400$287,057$114,066$143,528$287,057 Subtotal$1,342,000$1,451,507$1,010,066$1,307,979$1,451,507 Officer Salaries/benefits (% total Budget)55.27%55.27%78.50%78.50%78.50%?OTHER DIRECT OPERATING EXPENSES $342,600$370,556$148,000$192,564$231,132Other Direct Operating Expenses (% total Budget)14.11%14.11%12.50%12.50%12.50%?Overall Total Expenditures$2,428,180$2,626,319$1,286,708$1,666,215$1,849,054$976,000Potential expenditure saving $/Yr.$1,339,611$960,104$777,266$1,650,319Ratio of civilians to all personnel41.67%41.67%12.32%12.32%12.32%?Number of constables9.09.06.8409.09.0?Number of Sergeants2.02.00.7601.02.0?Total Uniform Police11.011.07.6010.011.0?Espanola Policing Nairn/Baldwin (33% of time) - Total Uniform7.3

6OVERALL SAVINGS SUMMARY OF POTENTIAL POLICING OPTIONSESPANOLA STATUS QUOSUDBURY12 OPP Aver. Equal SizeOPP with 9 Constables & 1 SergeantEspanola Nairn Baldwin 2015 OPP FormulaOPP Proposed 2015 FormulaExpenditures 2015 ($ per Year)$2,626,000$1,939,000$1,286,000$1,666,000$2,356,000$976,000Expenditures 2024 ($ per Year)$3,738,000$2,759,000$1,830,000$2,372,000$3,353,000$1,389,000Expenditure growth from Espanola 2015 ($ per Year)$1,112,000$133,000-$796,000-$254,000$727,000-$1,237,000Ten Year Savings ($ per Ten Years) $6,532,000$14,233,000$9,666,000$5,894,000$17,957,000POLICING QUALITY COMPARISONESPANOLA STATUS QUOSUDBURY12 OPP Aver.Feel safe or very safe in community in daytime92%89%95.8%Satisfied or very satisfied with overall quality?91.90%92.4%Feel safe or very safe walking after dark40%24%89.1%Satisfied or very satisfied with ease of contacting police?68%86.2%Satisfied or very satisfied with approachability of police?74%95.6%Violent Crimes/1000 people14.310.411.8Property Crimes/1000 353326.2Crime Rate Other/100019.27.810.9Total Crime Rate/100066.651.249.1Youth Crime Rate/1000328.370.421.9The OPP service provides the highest potential savings by far. Espanola can save $9.666 million even with the same number of constables who do the regular patrols around the community. From there the town could migrate to an optimized OPP service whereby at certain times one officer may leave the community to patrol other communities like Baldwin and Nairn. This would improve the ten year savings to $14.233 million. The savings for Espanola doing contract policing for nearby communities and contracting out dispatch saves about $5.894 million only if no uniform officers are added to achieve the servicing of nearby communities. Contract dispatch provides about 50% of these benefits. All alternatives except the status quo involve severance and switching costs. The proposed changes for 2015 OPP cost formula would save around $17.957 million. Savings based on 2014 OMPF Grant notice.Best option is in red. Its obvious that residents of communities with OPP service have a very high level of satisfaction with their police service. The OPP policed communities also experience the lowest crime rates. Response times are not an issue especially if Espanola retains all 9 of the present constables. Even the more cost effective versions of OPP service are setup so they can respond immediately to calls for service. One officer leaving the community doesnt mean that there still isnt one inside the town limits at all times. The data reported above comes from surveys from 10 OPP districts, Province Wide Surveys, Sudbury, & Espanola.

7This chart shows how much money each option personally saves each homeowner based on how much tax they paid in 2013. For example, if you paid $3,000 in municipal taxes in 2013 the Proposed 2015 OPP Cost model would save you $9,349 over ten years. The version of service with OPP(9 constables +1 sergeant) would save you $5,034. The OPP average of 12 Same Size Towns (Pop = 5,364) was forecast from their actual audited 2012 expenditures for OPP service to provide the best direct comparison of their costs to Espanolas. 2012 costs were then increase by 8.0% for the 2013 base cost. The option with 9 constables and 1 sergeant used Espanolas 2013 budget costs for their salaries and benefits. Since salaries and benefits for the OPP are typically around 78.5% of all costs, the total OPP budget could be calculated for Espanolas police maintaining this level of manning.

8RECOMMENDATIONSRequest council pass a resolution requesting the Clerk-Treasurer/Administrator conduct a financial forecast of the various options for Policing that I have presented.Do all preparatory work in 2014 to enable the new town council to commit to a long term path.Ensure any contract negotiations dont impair the ability of Espanola to consider other policing options.