Answer

Case Study: Pricing Police Case

Question 1

I would recommend the new or propose cost allocation model to Doran as the best and most equitable solution for all municipalities. The new model has been submitted to change the way Ontario Provincial Police (OPP) bills its policing and provides services to all cities around the province. Thus, the new model has been created to recognize the broadly disparate effect that it can have on all municipalities and the common interest it presents in controlling different police costs. From the case, the old model is outdated, complex, and lacks transparency across various expenses. It also has huge disparities in what various municipalities pay for OPP services. For instance, most municipalities have been spending significantly more than others, calling for a more equitable method. Unlike the old model, the proposed model splits costs into two areas – a base cost that includes what is required to offer police services to communities and a calls for service, which reflects actual responses within the province. Under this new model, the recommended or calculated base costs are based on a per household basis.

The main goal of designing the new model was to help OPP address extreme highs and lows existing in the old and current billing system. While high paying municipalities would gain some relief, those on the lower level would equally have exponential increases in their OPP billings. The new model will also help OPP continue revising and refining ratios between calls for service and base costs. Besides, the new model similarly shifts what each party or municipality would pay, even though it fails to address the root cause for increased policing costs and expenses. However, there have been more calls to implement and shift scheduling to foster efficiency. As such, the new model, as opposed to the current one, deals with both the billing issue and underlying cost drivers. Splitting expenses between a base cost and calls for service is also paramount because it permits a higher degree of predictability in police costs. Furthermore, it similarly allows differences in actual service calls across all the municipalities. In this regard, it is apparent that the new model would cover the basic and overhead costs required to serve all the communities while taking the ‘first call’ under its base costs category. Because the new model will be phased in a relatively long period, it will allow all municipalities time to adjust their costs and budgets. Nevertheless, a fairer and transparent OPP billing method, provided by the new model, is the essence of the government’s goal to invest in its people, develop stronger and robust communities, and ensure that Ontario is one of the best areas in the country.

Question 2

I do not believe any other models using a single cost driver are fairer than Doran’s new or proposed billing model. In particular, Doran’s new method is designed to provide more accuracy, transparency, and consistency in reflecting municipal servicing expenses and costs. It will also allow a greater budgeting certainty for municipalities compared to the old and current billing model. For instance, it will ensure that all cities share the cost of infrastructure and other fundamental expenses, including front-line policing, required for police to offer sufficient policing and respond appropriately to calls for service. The proposed model also ensures that all players, mainly municipalities, contribute equally to the base cost of protecting service. This model plays a significant part in decreasing the variation among different municipal policing expenses. Also, in promoting better relations and consistent services to all municipalities, the proposed model seeks to simplify and facilitate its cost recovery approaches in a fairer and more patent manner. Likewise, it addresses several issues in the costing and billing ways that often result in other municipalities contributing different rates. Thus, the proposed model is fairer because it will ensure that cities give adequate and efficient policing services to all people. In essence, the new model will provide enough and required assistance in compliance with local needs. It also ensures the provision of needed infrastructure and management to facilitate enough policing services.

Question 3

To ensure that the mayor supports my recommendation, I will explain that long-term cost management and control are top concerns and priorities. I will emphasize that the OPP must act urgently to gain greater efficiency in deploying and shifting its scheduling. I will also explain the need to expedite the provision of adequate policing services. The other approach I will use to ensure the mayor supports my recommendations is to demonstrate that greater transparency levels in billing and service delivery are needed. Here, I will reiterate that a billing model has to ensure transparency, both how costs are evaluated and changed to municipalities. I equally show the mayor how OPP can allocate its overhead between calls for service and base. In doing so, I will also ensure that I further establish the validity of the final ratios.