MEMORANDUM

 

 

To:                   Mayor Allen Green

                        Vice Mayor Mary Martin

                        Councilman Dennis Kennedy

                        Councilman Robert Pohlmann

                        Councilman George Steindoerfer

 

From:              Kenneth W. Parker, City Manager

 

Subject:          Police Services

 

Date:               October 28, 2010

 

 

The Port Orange Police Department has already implemented changes to reduce their operating budget by $228,364 since the budget was adopted by the City Council in September.  The implemented those changes on October 1.  That included laying off individuals (three part time Community Service Officers) within the Port Orange Police Department as well as leaving positions unfilled.  There are two full time officers whose military units are deployed. 

 

In fiscal year 2008, the Department had 113 full time equivalent positions filled.  The City Council increased it by one position in 2009.  The City Council added one custodian position in anticipation of moving to the new Police Headquarters.  In the fiscal year that just ended, the number of positions authorized was 110.  That number has been further reduced to 104.58 in this fiscal year.  The number of positions actually filled has varied from 102.93 in the fiscal year that ended September 30, 2008 to our current level of 97.5 full time equivalents. 

 

In 2008, the City spent 28.7% of its General Fund budget on Police Services.  With the recently adopted budget, the City spends 38.4% of its General Fund budget on Police Services.   In 2008, the City spent 49.1% of its General Fund budget on Public Safety services.   In 2011, the adopted budgeted allocated 63.6% to the Public Safety sector.

 

When you examine the component segments of the City’s budget, you quickly see that the growth has been in the retirement expenses sector of the budget.  Over the past four fiscal years, this segment of the budget has increased by $813,715.  Personnel expenses are 78% of the total Police Department budget. 

 

The salary portion of the Police budget increased from $5,165,565 in FY2008 to $5,320,331 in FY2011.  The retirement segment increased from $1,843,062 in 2008 to $2,610,340 for the fiscal year 2011, a 41.6% increase.  Today the retirement expenditure accounts for 22.8% of the total Police Department budget.  In 2008, it consumed 16.9% of the Police Department budget.   In 2008, the City’s contribution to the Police Pension Fund was 5.6% of the total General Fund budget.  In the recently adopted budget, the contribution level has increased to 8.8% of the total General Fund budget. 

 

In FY2008, staff reported to the City Council two items of concern related to Police Pensions.  First, the staff reported to the City Council our concern that pensions contribution levels were non-sustainable in light of the reduced revenues.  Second, we reported to the City Council that the unfunded accrued liability was non-sustainable.  As early as 2005, Actuarial Concepts was reporting to the Police Pension Board of Trustees the following:

 

            “The Plan’s projected liability funded status has remained in the low to mid 50% range over the past two years.  This level is lower than expected levels and should be monitored for further deterioration.  If Plan assumptions are realized, funded position should resume progressing to more acceptable levels; if not, assumptions may need to be adjusted to reflect this trend and City contribution requirements would necessarily increase.”

 

The City Manager met with the Police Pension Board.  The City asked that early negotiations begin on the pension contract article.  To open an article prior to the expiration of the contract requires both parties to agree.  Since both did not agree on opening the contract early, then both parties had to wait until 2009 for the contract articles to be opened.  The City provided notice to the PBA on November 19, 2008 and again on March 6 and March 24, 2009 of our readiness to begin negotiations on a successor agreement.  The contract had an expiration date of September 30, 2009.  Since that time, the City of Port Orange has been actively involved with the Police Union attempting to reach agreement.

 

As the City Council is aware, there are two components to the City’s contribution, the normal cost and the accrued actuarial liability cost.  The Unfunded Accrued Actuarial Liability can be best described as a variable rate mortgage where the principle and interest continue to increase.    Each year that the assumptions are not met, the liability increases and therefore the required payment increases.   It has been reported that the Plan has not met its actuarial assumptions eight out of the past ten years. 

 

The Plan actuary uses a common technique called smoothing.  It attempts to take the peaks and valleys out of the amortization schedule and make the payments more level.  The smoothing technique may have masked the actual amount that the City should be making.

 

Early on, staff identified four factors necessary to reverse the trend of the Unfunded Actuarial Accrued Liability increasing.  It will require all of the techniques in order to reverse the trend and have a meaningful impact on reducing the Liability.  The four factors are:

 

 

This memorandum will not address the options under discussion with the Union since Pensions are subject to collective bargaining in Florida.  We are currently engaged in collective bargaining related to Pensions.  Since the Plan Actuary brought the Unfunded Actuarial Accrued Liability to the City’s attention in 2008, we have been engaged in a process of attempting to reverse the trend and control the cost of pensions. Port Orange is not unique.  In fact, most cities who have local plans are dealing with the same issue, an increase in their Unfunded Actuarial Accrued Liability.

 

 

Levels of Service Discussions

 

Let’s examine what has already been done by the Port Orange Police Department to reduce the existing General Fund appropriation. 

 

Budget Reservations- Level 1

 

 

The projected reservation is $100,259.

 

We can expect the following:

 

 

Budget Reservations- Level 2

 

 

The projected reservation at this level is $128,105. 

 

We can expect the following:

 

 

Budget Reservation Level 1 and Level 2 have been implemented.  We will be bringing these forward in a budget reservation.

 

Budget Reservation- Level 3

 

 

The projected savings at this level is $101,831. 

 

We can expect the following:

 

 

Budget Reservation- Level 4

 

 

The projected savings at this level is $96,679. 

 

We can expect the following:

 

 

These items were discussed in detail during the Chief’s presentation to City Council in both May and July.

 

When we presented a comparison of City costs to Sheriff’s costs, we provided the City Council with an organizational alignment that matched up with the Sheriff proposal.  You have that material.  It would restructure the organizational alignment within the Department.  There would be only one Lieutenant, not the five we now have.  The Detective Bureau would be restructured in terms of its organization.  The CSO’s would be changed.  The number of officers assigned school zones would be different.  Included is the comparative data.  A few days ago, you were provided a memorandum from Chief Monahan related to organizational issues and why the City benefits by having a shift manager on duty for each of the patrol shifts.  From his standpoint, it is about accountability.   

 

Statistical Data

 

Organizationally, Port Orange has 1.4 Officers per thousand population.  That is lower than the national and state average.  This compares with:

 

City                             Officers per 1,000 population      Crime Rate per 100,000

 

Ormond Beach                     1.7                                                  3,191.1

Holly Hill                                2.5                                                  5,517.1

Daytona Beach                    3.7                                                  8,693.7

South Daytona                     2.1                                                  3,725.1

New Smyrna Beach             2.2                                                  4,413.8

Edgewater                             1.4                                                  3,042.9

Deland                                   2.3                                                  5,891.7

Orange City                           2.6                                                  9,536.4

Deltona                                  0.82                                                3,229.2

 

Port Orange’s Crime Rate continues to be among the lowest in the area.  Port Orange’s Crime Rate is 2,441.3 per 100,000 residents.  

 

Port Orange Detectives clearance rate is 83%. 

 

Port Orange’s expenditure per capita for Police Services in Fiscal year 2009 was $203.  This compares with:

 

City                                         Expenditures per Capita

 

Ormond Beach                                 $ 176

Holly Hill                                            $ 182

Daytona Beach                                $ 518

South Daytona                                 $ 226

New Smyrna Beach                        $ 251

Edgewater                                         $ 147

Deland                                               $ 254

Orange City                                       $ 208

Deltona                                              $ 105

 

(These are unadjusted budget numbers.  This is what is appropriated in their General Fund.)

 

Port Orange places 78% of its total sworn officers on patrol; 14% in the Detective Bureau; and 8% in Administrative positions.  The national average is 68% on patrol.   

 

Port Orange Police Officers are patrolling 28 square miles.  The City has 7 patrol zones. 

 

City                                         Square Miles                                    Number of Zones

 

Ormond Beach                     30.74                                                  6

Holly Hill                                  4.47                                                  2

Daytona Beach                    64.76                                                  17

South Daytona                       3.87                                                  3

New Smyrna Beach              33.77                                                  4

Edgewater                             11.86                                                  2

Deland                                   18.8                                                    5

Orange City                             6.9                                                     3

Deltona                                  46.0                                                    5

 

Observations

 

Port Orange Police Department is an excellent Department.  In 2010, the Police Department was recognized as a Flagship Agency when the Department was reaccredited.  That is something to be extremely pleased about.  This speaks highly of our officers and their commitment to excellent law enforcement in Port Orange.  Our Officers have excellent reputations within the law enforcement community.  That leadership starts at the top of the organization and permeates throughout the organization. 

 

Within a relatively short period of time, we will see a major transformation in our Department.  Currently, there are 11 people in DROP.  The first individual to complete his DROP program will be Frank Surmaczewicz.  His retirement (DROP) date is June 1, 2012.  The last in this group of DROP participants will complete their DROP program in June 1, 2015. The City has one Captain in DROP, five Lieutenants in DROP; one sergeant in DROP; and four Patrol Officers in DROP.  Currently, we have four individuals who are not in DROP, but are qualified to enter DROP, to include the Police Chief and Assistant Police Chief.  The reason that I point this out to the City Council is that the Department will look radically different in the next five years in terms of the Departmental Leadership Team.

 

The City of Port Orange is fortunate to have an excellent Volunteers in Police Service program.  Annually, these individuals give to the City of Port Orange over 20,000 volunteer hours.  They provide a variety of services to the community such as handling the boat ramp on weekends and holidays.  They provide valuable assistance to our Police Department in a variety of ways.  They assist our other Departments with special events.  Over the past several years, we have seen a decline in the numbers of volunteers.  Many have retired from service.  Others have died.  Still others have simply left.  The core group is very dedicated to serving our community.  Like all volunteer groups, we must focus on recruiting new individuals, not just any individual, but individuals who fully understand that they are not Police Officers or Auxiliary Police Officers or Reserve Police Officers.  Our volunteers do a variety of jobs within the Department.  This is a group that we need to encourage, promote and support.   I am encouraging Chief Monahan to contact individuals who have graduated from our Citizen Police Academy to let them know that we are accepting volunteer applications.  There may be some in the group that would like to be part of the VIP group.  Because of recent vacancies within the group, we do need to recruit additional volunteers.  They provide so much to the Department.  Operating a volunteer program requires constant work to keep membership active and motivated.  It requires looking at new ways to engage volunteers.  It requires a commitment from top down in order to make it work.  The Port Orange Volunteer Program was the very first of its kind in Volusia County.  Soon after I arrived, I was asked to send our volunteers to cities throughout the area to help them start programs.  We even advised the Sheriff’s Department on how to start the program.  This is an excellent program.

 

The Port Orange PAL program provides a valuable service to the youth in Port Orange.  The PAL program is currently housed in the Port Orange gym.  Parks and Recreation and the PAL Director work extremely well together to complement each other rather than duplicate.  That makes for a good working relationship.   

 

Our Victim Advocate Program is recognized as one of the best in the area.  The program has been recognized on numerous occasions by the 7th Circuit Court District for it efforts.  Not only has our paid staff been recognized but so have our volunteers who work out of the Victim’s Right Advocate’s Office. 

 

Should you have any questions, please contact me.

 

 

 

 

 

 

 

 

kwp/ckr