BD Ottawa
Ontario Civilian Commission On Police Services 1994 Ottawa Police Services Board
City Of Ottawa
Presiding Members:
Murray W. Chitra, Chair
Appearances:
Bruce H. Stewart, Q.C. , City of Ottawa
John R. Read, Ottawa Police Services Board
Allan R. O’Brien, Ottawa Police Association
Hearing Date: Tuesday, November 1, 1994
DECISION ON PRELIMINARLY MOTION
Background:
On June 30, 1994 the Ottawa Police Services Board wrote the Ontario Civilian Commission on Police Services requesting a hearing under section 39(4) of the Police Services Act R.S.O. 1990, c. P. 15 as amended. This provision provides the Commission with authority to determine budgetary disputes between a Municipality and the local Police Services Board.
On September 29, 1994 a meeting was convened in Ottawa between potential parties to this proceeding to review a number of preliminary issues. At that time, Mr. Stewart, on behalf of the City of Ottawa, indicated that he had some concerns about the Commission’s jurisdiction to conduct a hearing, given the facts of this case. This position was confirmed by a letter dated October 12, 1994 .
A hearing date was set in Ottawa for November 1, 1994 to consider this concern, by way of Preliminary Motion. This is our decision on this Motion
The Facts:
The history to this dispute is complex. In this respect, we have been greatly assisted by an Agreed Statement of Facts provided by the Parties to this proceeding.
The budget in question relates to the 1994 calendar year. However, the origin would appear to be in series of events commencing in 1993.
Events in 1993:
In April of 1993 the Minister of Finance of the Province of Ontario announced the Expenditure Control Plan. The practical consequence to municipalities was a reduction in the 1993 unconditional grants.
For the City of Ottawa this represented a loss of $2,702,350. The Ottawa Police Services Board’s share of this reduction was $963,733. For various reasons, which are not relevant here, the Board indicated that it was not able to make this reduction.
The City asserts the based on a commitment from the Board to continue to look for potential savings during the balance of 1993 it agreed to assume the total amount of the constraint. The Board denies any such commitment. In any event, no deduction was made from the police budget as a consequence of Expenditure Control.
In early July, 1993 the Social Contract Act received Royal Assent. As part of the implementation of this Act, a series of agreements were negotiated. At the provincial level a “Sectoral Framework Agreement” was signed between the Government of Ontario. various Police Associations, the Police Association of Ontario and the Ontario Association of Police Services Boards.
At the regional level a series of “Local Agreements” were entered into between Police Services Boards and the Associations. Such an agreement was reached between the Ottawa Police Services Board and Ottawa Police Association on August 10, 1993. This Agreement identified expenditure reduction targets, the manner in which they were to be achieved and other related concerns. A similar agreement was signed with the Ottawa Senior Officers Association, The City of Ottawa was not a part to either Agreement.
The Social Contract target for the Ottawa Police Services Board for 1993 was $1,515,746. The Board indicated that it would not be able to meet the full amount. As a result, the City loaned it the sum of 5505,246 from reserve funds. This amount is repayable in April of 1996.
The 1994 Budget:
In early December of 1993 the Board provided the City with its estimates of 1994 expenditures. In mid-December, both the Board and City approved the budget in the amount of $60,278.800 net of Social Contract savings. Part of this sum included $2.921.500 for long service retirement costs.
The budget itself, was to be funded from two sources. The major portion, or $58,686,900 was to come in the normal fashion form taxes, payments in lieu and grants. The balance was to come from the Capital Reserve Fund to be used exclusively for long service retirements. This is reflected in a resolution passed by City Council in December which directed that “…an amount not to exceed $1,591,900 be transferred from the Reserve Fund to the 1994 Police Budget (to pay for one-time costs of retirement pay-outs and benefits in 1994 and 1995) subject to the limitation that the amount of transfer be sufficient to avoid a deficit in 1994 and 1995 but in no case will the amount transferred contribute the generation of surplus.”
The Surplus:
Everything appeared to be fine until January of 1994. At that time, the Ottawa Police Services Board reported an estimated surplus for the recently completed calendar year of 1993 in the amount of $1,015,409. This figure was later revised to 51,013,273. This disclosure provoked a flurry of correspondence.
City officials expressed the view that this surplus was contrary to what they had been lead to believe by the Board and its management. The Board does not accept this assertion.
A dispute then arose as to how these monies were to be used. The Board took the position that the surplus was committed and must be allocated to the Social Contract targets set out in the Local Agreement dated August 10, 1993. Specific reference was made to article 14 of that Agreement which reads:
“14. The Board hereby agrees to apply any normal budgetary surplus achieved as of the end of its fiscal year December 31, 1993 to the next year’s Social Contract ERT. Therefore, if there is any budgetary surplus as of December 31, 1993, it will applied to the target commencing January 1, 1994 and so on for each term of the Social Contract period.”
The City of Ottawa disagreed. They took the position that this money must be used “to cover costs as they are part of the operating budget “. The identified “costs” were the retirement pay-out and benefits.
In April of 1994 City Council amended their December resolution and directed that the appropriation from the Capital Reserve Fund be reduced from $1,591,900 to $ 578,627
The difference between the two amounts corresponds to the reported 1993 surplus.
The Application:
As noted earlier, on June 30, 1994 the Ottawa Police Services Board made application to the Commission under section 39 of the Police Services Act. Section 39(4) provides that:
“39(4) If the council does not approve the board’s estimates or disagrees with the board on the number of members of the police force that is adequate or the equipment and facilities that are adequate, the Commission shall determine the question after a hearing.”
In its application the Board asserts that the City’s reduction of the allocation from the Capital Reserve Fund “had the end result that the 1994 Ottawa Police Operating budget was reduced by 51,013,206.00. As a result, of that reduction it is anticipated by the Ottawa Police Services Board that there will be corresponding deficit for 1994.”
Further, the Board states that this series of events raises an important issue: “In particular, that issue relates to the ability of the City, having passed the estimates for 1994, to amend those estimates in the middle of the term of the budget.”
The Motion:
Mr. Stewart, on behalf of the City of Ottawa, questions the application of section 39 to the facts of this case.
Essentially, he makes two arguments. The first relates to section 39(4) itself. He asserts that before the jurisdictions of the Commission can be invoked under this provision that certain preconditions must be met. There must be:
(a) a failure on the part of a municipal council to approve a Board’s estimates ; or
(b) a disagreement between a Board and a Council concerning the adequacy of complement, equipment or facilities.
He argues that neither precondition is met in this case.
Mr. Stewart notes that the City has approved the Board’s 1994 estimates and at no time has reduced or otherwise adjusted those figures. He indicates that the City takes no issue with the approved estimates or adequacy of services at this point in the proceedings.
He acknowledges a disagreement, but suggests that it has nothing to do with the estimates themselves of their adequacy, but rather the “source” of the funding and certain legal issues flowing from it.
Mr. Stewart argues that these are questions which fall outside the Commission’s jurisdiction and should be resolved by negotiation between the concerned parties. If that is not possible, he suggests the assessment of the significance of representations and undertakings and the validity of contractual provisions are for the courts to determine.
Mr. O’Brien on behalf of the Ottawa Police Association supports Mr. Stewart’s assertion that the Commission has no jurisdiction in this matter.
Mr. Reid on behalf of the Ottawa Police Services Board challenges these arguments. He also describes this step as a unilateral and retroactive amendment of the budget which is either and adjustment of the earlier approved estimates or tantamount to such. He suggests that what the City has done is made over million dollars of authorized funding “technically unavailable” . He describes this as effectively “bouncing a cheque” that the Board has written.
He asserts the validity of the Local Agreement and the authority of the Board to enter into such an arrangement. He denies any bad faith or misrepresentation on the part of the Board. He argues that any surplus which arose during the course of 1993 is committed by the terms of the Agreement.
While he acknowledges that the issue here is fairly narrow, he suggests that it is one best left to a specialized tribunal like the Commission rather than the courts. He argues given the Commission’s supervisory and budgetary role that it is the most appropriate forum to decide this issue.
Decision:
For many years in the province of Ontario the funding of municipal police forces was purely a local matter.
In 1965 the Police Act was amended to provide a limited form of appeal when certain types of disputes arose between a Board and Municipality.
The relevant provisions could be found at section 14 of the Police Act R.S.O. 1970, C. 351. It provided
“14(1) Subject to subsection 3 and clause g of section 41, the police force in a municipality having a board shall consist of a chief of police and such other police officers and such constables, assistants and civilian employees as the board considers adequate, and shall be provided with such accommodation, arms, equipment, clothing and other things as the board consideration adequate.
(2) Every Board shall, on or before the 1st day of March in each year, prepare and submit to the council or each council responsible for maintaining the force, for its consideration and approval its estimates of all moneys required for the year to pay the remuneration of the members of the police force and to provide and pay for the accommodation, arms, equipment and other things for the use and maintenance of the force.
(3) Where the council does not agree with the board on the estimates or on the adequacy of the number of members of the police force or the accommodation, arms, equipment or other things for the use. and maintenance of the force, the Commission shall determine the question after a hearing.
The “Commission” in this case refers to the Ontario Police Commission.
There seems to have been a typical patterns of cases that found their way before the Commission. A Board in preparing its annual estimates would identify the need to hire additional officers or civilian employees, to buy new equipment (i.e. vehicles) or build new facilities (i.e. replace the old police station). The local Council would find the request excessive and the matter would then be referred to the Commission. Surplus appears never to have been a factor.
During the course of hearing the Commission would review the proposal in detail. An assessment would be made of local policing requirements focusing on the question of “adequacy”. This could entail a number of different measurements.
These have included:
(a) historical-What has the level of policing in this community been in the past?
(b) comparative-What policing services are in place in similar communities of a similar size? What is the comparative per capita costs? comparative crime rates? comparative caseloads? comparative crime clearance rates?
(c) prospective-Is there anticipated growth or other changes in a community that warrants increased investments in policing?
(d) alternative-Are there means available to the Board to provide a similar level of service at a lower cost?
At the end of the day, the Commission would make its determination as to “adequacy” and a budget level would be fixed for the year.
On December 31, 1990, the Police Services Act same into effect, replacing the Police Act, The current Section 39 took the place of Section 14. In full, it reads:
“39(1) Each year, the Board shall submit to the municipal council or to each council or each council responsible for maintaining the police force, as the case may be, its estimates for the year.
(2) The estimates shall be submitted at least one month before the beginning of the fiscal year of the municipality or municipalities, as the case may be; if they are to be submitted to municipalities whose fiscal years begin on different dates, they shall be submitted to all the councils at least one month before the earliest date.
(3) The estimates shall show, separately, the amounts that will be required,
(a) to maintain the police force and provide it with equipment and facilities; and
(b) to pay the expenses of the board’s operation other than the remuneration of board members.
(4) If the council does not approve the board’s estimates or disagrees with the board on the number of members of the police force that is adequate or the equipment and facilities that are adequate, the Commission shall determine the question after a hearing.
The “Commission” referred to above is the Ontario Civilian Commission on Police Services, the successor to the Ontario Police Commission.
It is evident to us that while there are some differences between the wording of section 39 and the earlier provision, the thrust or import of the two are the same. Essentially, the provision creates a mechanism for Boards and Municipalities to have disputes arising during the course of the preparation of annual estimates resolved through the means of a hearing before an impartial tribunal. The focus of this hearing is an assessment or measure of the “adequacy” of policing resources.
What is being requested of us in the case at hand? In our view what appears to be issue is not “adequacy”. Both parties accept that the appropriate budget or estimate for the Ottawa Police Service for 1994 was the amount approved $60,278,900. There is no assertion that the Ottawa Police Service has an inadequate number of members, equipment of facilities.
The City states that the Board has all the necessary funds to meet its 1994 expenditures. If there is a deficit Mr. Stewart indicates that it will arise from failure by the Board to properly meet Social Contract targets and that this is not an issue for the Commission.
The Act is silent on who is responsible for any deficit, however it is clear that in the past the municipality has funded any deficit subject to negotiations prior to approval of the following year’s estimates.
What is at dispute is who owns the seemingly unanticipated 1993 surplus. Has this sum been lawfully and properly contractually committed by the Board to future social contact targets? Or, can the city insist that this money be applied to pay for retirement payments and benefits for police officers in 1994 and 1995? These are both interesting legal questions, but not in our view within the scope of the process contemplated by section 39 or its predecessor.
Is the midterm reduction in the allocation form the Capital Reserve Fund “tantamount” to an unilateral adjustment of the 1993 budget? On the whole, given Mr. Stewart’s explanation of events and the conditional language of Council’s resolution in December, 1993 we do not think that is the case here. Could such a case arise that might attract the scope of section 39? We can conceive of such situations, but not on the facts presented.
It is our view that the resolution of this matter rests in the hand of the parties. It would be our recommendation that the parties first determine precisely what shortfall, if any, will arise in meeting the 1994 social contract targets. Indications would seem to be that it will be less than half of $1,013.273. Once this sum is known then some effort should be made through principled negotiation to determine how this deficit can be met. Barring agreement, address to the courts is possible. However, given the constraints of time we would suggest some form of binding alternative dispute resolution.
Finally, we would like to conclude by saying that the events leading to this impasse are unfortunate. With some proper planning, monitoring and communication between the Board and the City it should have never arisen.
For the reasons noted above, we grant Mr. Stewart’s motion and dismiss application.
DATED THIS 15TH DAY OF NOVEMBER, 1994.