The Vancouver Police Department predicts it will be over budget by $4.98 million by the end of the year — the first time in 16 years — and points to city council’s decision not to fully fund its 2021 budget request as the reason for the expected deficit.
The department outlined its financial situation in a report that goes before the Vancouver Police Board Thursday.
“In previous years, the council-approved VPD budget has equalled the board’s submission,” the report said. “However, as council voted a significant decrease to the VPD’s 2021 budget, the year-end projection is volatile and, at this time, depending on the events in the city, management’s best estimate is that the VPD will be over budget by $4.98 million by year end.”
Those “events” include, but are not limited to, escalating gang violence, a growing number of protests and an easing of COVID-19 provincial health orders that translates to more public activity.
The report noted the first quarter of the year also saw police respond to the Strathcona Park encampment and investigate a dramatic rise in anti-Asian hate crimes. Drug-fueled street disorder also persists in the Downtown Eastside.
Management anticipated the department would likely be under budget in the first part of the year — which it is, by $568,396 — but predicted the deficit would incur as the year comes to a close.
The police budget approved by council means the department can’t hire 61 new recruits, which will keep the VPD at 2009 staffing levels. The department also expects to lose officers — and already has — to Surrey’s new municipal force.
Excluded in the year-end deficit prediction, and a topic of discussion with city staff, is the budget adjustment for 2020 collective agreement wage settlements. In previous years, the city would fund the settlements.
“However, as a result of COVID-19, funding earmarked for all city-wide potential collective agreement provisions were re-directed to offset the city’s financial challenges,” the report said. “This could further increase the year-end deficit position if VPD were to absorb this cost within the existing budget.”
The VPD's budget concerns come two months after Vancouver school trustees voted to scrap the 17-member school liaison officer program at schools, effective at the end of this month. Police say they are looking at alternative models to support youth.
"As a result, there will be no savings realized from the dismantling of the SLO program and therefore it is not considered in the year-end projection," the report said.
In December 2020, the majority of council voted to approve a 2021 police budget of $316 million, about $766,000 more than the 2020 budget but $5.6 million less — total figure was $5,689,974 — than the VPD requested for this year’s budget.
The police board has since appealed the decision to Wayne Rideout, B.C.’s director of police services. An emailed statement Monday from the Ministry of Public Safety and Solicitor General said the review is still underway “and we have no updates at this time.”
On June 10, Vancouver city manager Paul Mochrie sent a letter and 17-page report to Rideout that outlines council’s decision in December 2020, which was initially based on a city staff recommendation that the police budget be reduced by at least one per cent.
“Should the ministry decide in favour of the [police board’s] application, the impact on other city services would be significant given the VPD is the largest department in the city,” said the city report obtained by Glacier Media.
“Any increases to the VPD budget would require offsetting reduction in other city services, which given their size would require disproportionate service reductions in those areas.”
Those services could include “major reductions” to other departments such as community services, parks operations and street cleaning, which would create “significant additional pressure on VPD resources, effectively negating the exercise or worsening the situation.”
Added the report: “One would anticipate increased calls related to homelessness, street disorder, encampments and mental health issues, if those other city resources are not available.”
Property taxes, which primarily fund the police budget, could also be increased, the report warned, noting staff is currently forecasting a nine per cent hike for 2022; earlier this year, council passed a motion instructing staff that it wanted a budget that required no more than a five per cent increase.
At $7,556 per year, Vancouver’s property taxes and utility fees for an average single-family home are the second highest in the region, after West Vancouver.
The VPD was the only city department that did not agree with council’s request early on in the pandemic to reduce its budget by one per cent, instead continuing with pay and merit increases, the report said.
Over the past five years, $65 million in additional funding was provided to the VPD to increase staffing and service levels, in addition to funding wage settlements that continue to exceed inflation and increases of other city unions and exempt staff.
Since 2011, policing costs grew by almost 65 per cent, with the major driver being wages.
“As arbitrators make comparisons to police departments across Canada rather than comparable wages of similar roles in Vancouver, wages are not aligned to the wage growth in other sectors of public service in Vancouver,” the report said. “As such, council has no ability to influence the primary cost driver of the VPD budget — the police wages.”
Other points made in the city report include:
• Last year saw a 20 per cent reduction in the total crime rate, a 15 per cent decrease in the crime severity index for non-violent crimes and a 20 per cent decrease in the property crime rate.
• The violent crime rate and the crime severity index for violent crime remained flat. Calls for police service were down 13 per cent and response times improved by three per cent. City staff acknowledged these metrics could change as the pandemic subsides.
• The city budget was significantly altered by COVID-19, with $89 million in revenue losses (temporary closures of facilities and programs, loss in parking fees, casino revenue, permit fees) and another $90 million expected this year.
• The city "only" received $16 million from the provincial “restart” program, which was less — on a per capita basis — than any other municipality in B.C.; $16 million was the amount the city spent in unexpected pandemic-related operating costs last year in cleaning of facilities, support for tenants in single-room-occupancy buildings and general sanitation.
In a recommendation to Rideout, city staff suggested the provincial government provide direct financial support to the City of Vancouver for policing services “outside of the limited property tax funding available as a municipality."
“As the central city of Metro Vancouver, the VPD services extend more broadly than most local municipalities as the city is a centre for regional events, tourism and associated public and criminal activity that require a higher level of police services for the City of Vancouver,” the report said.
“These public activities are a strong driver of provincial GDP and contribute to the province’s revenue streams, however municipalities only incur costs, not additional revenues for policing services. Police costs in the City of Vancouver are significantly higher than other metro municipalities on a per capita basis.”
City staff also recommended Rideout have the provincial government address the inconsistencies in the direction to arbitrators, where arbitrated decisions related to policing rarely address matters beyond specific and prevailing compensation patterns, including those outside B.C.
“This has driven unsustainable wage increases in public safety which are the largest costs in the property tax funded budget of municipalities, and puts the city’s affordability at risk if not addressed,” the report said.
Meanwhile, members of the city's finance staff are scheduled to meet privately Thursday with the police board to discuss the 2022 budget. Also on the agenda of the in-camera meeting is a report titled, "Strategic policing challenges and financial implications." It is to be delivered by Chief Adam Palmer and Deputy Chief Steve Rai.