POLICE FUNDING FORMULA - PART 2

On August 23, Council passed a revised funding formula for the Edmonton Police Service. While I’m committed to ensuring EPS has the funding they need to provide efficient and effective services for our community, I didn’t feel that the proposed formula struck the right balance between funding stability and financial prudence. I voted against the formula as presented and wanted to take this opportunity to share what brought me to that decision.

Back in October 2022, I was optimistic about the initially proposed formula. As I shared at the time, I thought the formula had the potential to balance the need for certainty and predictability for EPS while also ensuring fiscally responsible spending. I passed a three part motion at that time - to implement the funding formula for 2023, explore a range of refinements to the formula, and to introduce an accountability framework.

My intent in requesting the refinement to the formula was to ensure we were striking the right balance between stable and predictable funding, without EPS funding outpacing spending on other programs. The refinements that came back to us last week didn't hit the mark for me in that regard. There were two key components that I wasn’t comfortable with.

The first relates to how increases are calculated. The formula works by applying population growth to personnel costs. As Edmonton’s population growth increases, the amount of funding for EPS would increase as well to ensure the number of officers keeps pace with the number of Edmontonians. The formula also applies an inflation factor to non-personnel costs, ensuring that the purchasing power for equipment and other needs isn’t eroded over time. All of this is a sensible approach in my mind, but there were two nuances in the formula that undermined my confidence in this approach.

The first is that the formula uses the inflation and population growth factors on the total amount of money EPS spends, not just the amount of tax revenue they receive. I like the idea of using these growth factors to gauge how much our tax contribution should increase, but the formula is set up so that we also pay growth on other forms of revenue, like fine revenue. A funding formula should provide constraint and stability, but basing it on expenditure works against this goal. A larger up front number means the amount of growth increases at a faster pace than it would if we based it solely on tax contribution. It also means that years with higher fine revenue become translated into long term tax obligations from the City. Conversely, it can also lead to a situation where a drop in fine revenues (as happened during the pandemic) is compounded by a corresponding drop in tax contributions. I believe a formula based on tax contribution to EPS would have provided more stability and ensured that increases in tax contributions to EPS were not being affected by fluctuations in other revenue sources.

My second concern with the formula as it was presented relates to the 30% cap. This is a mechanism to ensure that the amount EPS receives doesn’t exceed 30% of total City expenditures. This number was selected because EPS has never exceeded 30% in the past, and the report from City staff didn’t recommend changing this number. This was a concern for me, because growth in EPS funding has outpaced many other City departments over the past decade. By keeping the 30% static, we are locking into this ratio which is, arguably, already out of balance. It also means that increases in overall City spending will necessarily increase the available funding envelope for EPS, even though this growth in expenditures may be driven by things completely unrelated to our policing needs.

Tracking EPS Budget. Safer for All Report, 2021.

Overall, I'm worried about the pace of budget growth that the proposed formula will result in, putting extra pressure on our taxes and decreasing our ability to invest in solutions that reduce demands on EPS.

I would have liked more time to refine the formula to address the concerns I’ve outlined but appreciate that a majority of my colleagues wanted to move forward with the formula as is. But this isn’t to suggest there weren’t positive outcomes in the discussion. I was encouraged to hear that EPS confirmed that the formula will give them the resources they need to address crime and safety in our community. Also, EPS let Council know that there weren’t any anticipated service packages in the coming years, which helps provide certainty for taxpayers.

I'm also pleased that we are moving forward with implementing the accountability framework that came out of my motion in October. The framework will allow for better informed conversations and understanding about how the funding is being put to use by EPS. There isn’t a clear correlation between police spending and safety, so it's important we look more holistically at understanding the use of the funding. Ultimately, the accountability framework will provide Council with a mechanism to get the information we need to ensure that EPS has an adequate budget.

The conversation at Council was also an opportunity for me to share my intent, along with a number of my colleagues, to champion an approach that would see a similar growth-based formula for other areas of community safety and wellbeing. Our investments in public safety should be holistic and consistent. By continuing to invest in programs that address the root causes of crime, we can create a safer and more equitable environment for everyone. These investments must also match growth in our city. We'll be debating this idea further on September 12 and I’m hopeful to see work moving forward on this idea.

I’m also encouraged by the follow up motion from Mayor Sohi to work with Edmonton Police Commission and Service to identify areas of joint advocacy to the Provincial and Federal governments. The City can support strategic projects but we need significant investment in early prevention, including health, housing, and child welfare from other orders of government. I’m hopeful that together, Council and Commission will be successful in highlighting the areas in which we need stronger support and decisive action from the Federal and Provincial governments.

Thank you to everyone that called and emailed my office for sharing your thoughts on the EPS funding formula. I appreciate your commitment to fostering a safe city for all Edmontonains, and I look forward to those ongoing conversations.