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Niagara Regional Police Service Statement of Operations - Quarter 2 Financial Update (2017) (in thousands of dollars)

  Year to Date Annual
Budget Actual Budget vs. Actual Variance Favourable/(Unfavourable) Budget Forecast Budget vs. Forecast Variance Favourable/(Unfavourable)
Expenses
Compensation $67,284 $69,789 -$2,505 (3.7%) $134,471 $140,871 -$6,400 (4.8%)
Administrative 1,972 1,972 -1 (0.0%) 3,943 3,943 0 (0.0%)
Operational & Supply 1,071 1,373 -302 (28.1%) 2,143 2,143 0 (0.0%)
Occupancy & Infrastructure 171 93 78 45.7% 341 341 0 (0.0%)
Equipment, Vehicles, Technology 2,911 2,965 -54 (1.9%) 5,822 5,822 0 (0.0%)
Financial Expenditures 2 4 -2 (104.6%) 4 4 0 (0.0%)
Total Expenses 73,411 76,196 -2,785 (3.8%) 146,724 153,124 -6,400 (4.4%)
Revenues
Federal & Provincial Grants -4,525 -4,525 -1 0.0% -9,051 -9,051 0 (0.0%)
By-Law Charges & Sales -3,560 -3,350 -210 5.9% -7,119 -7,119 0 0.0%
Other Revenues -695 -823 128 (18.5%) -1,389 -1,389 0 (0.0%)
Total Revenues -8,780 -8,697 -82 0.9% -17,559 -17,559 0 (0.0%)
Intercompany Charges
Intercompany Charges -646 -655 9 (1.4%) -1,266 -1,275 9 (0.7%)
Total Intercompany Charges -646 -655 9 (1.4%) -1,266 -1,275 9 (0.7%)
Net Expenditure (Revenue) Before Transfers & Indirect Allocations 63,986 66,844 -2,858 (4.5%) 127,899 134,290 -6,391 (5.0%)
Transfers
Transfers from Funds -225 -225 0 0.0% -225 -4,592 4,367 (1940.8%)
Transfers to Funds 9,585 9,585 0 0.0% 9,585 9,585 0 0.0%
Total Transfers 9,360 9,360 0 0.0% 9,360 4,993 4,367 46.7%
Indirect Allocations & Debt
Indirect Allocations 2,994 4,012 -1,018 (34.0%) 5,969 7,057 -1,088 (18.2%)
Capital Financing Allocation 1,063 1,062 0 0.0% 3,931 3,930 0 0.0%
Total Indirect Allocations & Debt 4,057 5,075 -1,018 (25.1%) 9,900 10,988 -1,087 (11.0%)
Net Expenditure (Revenue) After Transfers & Indirect Allocation 77,403 81,279 -3,876 (5.0%) 147,160 150,271 -3,112 (2.1%)

Variance Analysis (in thousands of dollars)

The year to date result at June 30 was a Net Expenditure deficit of $2,858 before indirect allocations. At this time, the Service is forecasting a year-end position of $2,024 over the approved budget before indirect allocations.

Personnel Costs

At June 30, Personnel Costs exceeded the approved budget by $2,504. This deficit is mainly the result of the implementation of the new collective agreements and costs associated with retirements.

The yearend forecasted deficit to Personnel Costs of $6,400 includes the impact of the arbitration award of $5,700 and the cost of termination pay-outs of $700. A transfer from NRPS reserve funds of $4,400 is included in the forecast as a partial offset to this expense.

In an effort to reduce the impact of the year end deficit, the Service has limited the use of temporary staff and overtime to operationally essential vacancies or in exigent circumstances.

Other Operational Expenditures

Other Operational Expenditures are comprised of all other operating expenditures excluding Personnel Costs, Financial Expenditures and Interfunctional Transfer. The net deficit of $400 is caused by the timing of expenditures. The Service continues to monitor spending of discretionary accounts however much of the expenditures are fixed contractual obligations.

Recoveries & Revenues

Gross Revenues and Recoveries are trending on budget. The yearend forecast includes the budgeted $2,666 transfer from the Contingency Reserve to offset collective agreement implementation results, a transfer of $700 from the Sick Leave Reserve to offset the sick leave payout deficit and a $1,000 transfer from the Employee Future Benefit Reserve to mitigate the overall deficit.

As detailed in a May 2017 report to the Board, the Service's reserves, in accordance with the Region's guidelines are underfunded. As further deficit mitigation from Service reserves would compound the underfunding. The Niagara Region will wait for recommendations from the Police Service Board.

Conclusion

The detailed variance analysis and forecast have been prepared based on results of operations at June 30, 2017. At June 30, the Service is forecasting a $2,024 expenditure deficit net of the potential $4,367 recommended year-end transfers from Service reserves.

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