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2021-03-31 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session March 31, 2021 MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING MARCH 31, 2021 AT 4:30 PM MEETING CONDUCTED BY ELECTRONIC PARTICIPATION Present: Mayor D. Darling Councillor D. Merrithew Councillor G. Norton Councillor D. Reardon Councillor G. Sullivan Also Present: City Manager J. Collin Commissioner of Finance and Treasurer K. Fudge Commissioner Growth & Community Services J. Hamilton Commissioner Transportation & Environment M. Hugenholtz Commissioner Saint John Water B. McGovern Director Corporate Performance S. Rackley-Roach Senior Financial Manager D. Arbour Senior Financial Manager T. Fawcett Director of Strategic Affairs I. Fogan Fire Chief K. Clifford Manager Continuous Improvement E. Hatfield Administrative Officer R. Evans Administrative Assistant K. Tibbits 1. Meeting Called To Order Councillor Merrithew called the Finance Committee open session meeting to order. 1.1 Approval of Minutes — February 18, 2021 Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the minutes of February 18, 2021 be approved. MOTION CARRIED. 1.2 Strategic Plan Update Mr. Fogan reviewed the submitted presentation entitled "10-Year Strategic Plan" for the City of Saint John. The strategic plan outlines a strategy and direction to allow for better decision making and allocation of resources that align with the Community's vision. It implements other existing plans such as Plan SJ, Play SJ and Move SJ and will also guide the development of new future plans and policies. It supports adherence to the City's long-term financial plan and will ensure alignment with Council's priorities. Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the Strategic Plan Update, be received for information. Finance Committee Meeting Open Session March 31, 2021 MOTION CARRIED. 1.3 Performance Management Ms. Rackley-Roach noted that the development of a Performance Management framework is within the context of the Ernst & Young Operational review which recommended the enhancement of the City's corporate performance framework. Ms. Hatfield reviewed the submitted presentation "Performance Management — Managing for Results" and provided a high-level overview ofthe approach to be undertaken as part of the City's corporate performance management framework which has been identified as a priority for 2021. There are three organizational performance frameworks currently underway —the strategic plan, corporate performance management framework and personnel evaluation framework. Mr. Collin stated that the performance management framework will have a robust set of measures, objectives and key performance indicators and will provide management teams at all levels an opportunity to examine the objectives and indicators and "measure to manage." It will be tied to the performance of staff and measured against objectives. It is an important alignment exercise for an organization as large as the City of Saint John. Moved by Mayor Darling, seconded by Councillor Sullivan: RESOLVED that the submitted presentation entitled, "Performance Management — Managing for Results", be received for information. MOTION CARRIED. 1.4 Cyberattack — Restoration Costs and Projected Recovery Estimate Ms. Rackley-Roach provided an overview of the costs related to the cyberattack. The scope of the attack was wide -reaching across the City's information technology infrastructure necessitating the need to engage various vendors to support the restoration of a secure, temporary network to ensure the continuity of public services. To address the ransomware attack, it was necessary to purchase hardware under "Emergency Provisions" which allow for purchases to be made when strictly necessary and for reasons of urgency brought about by unforeseeable events and when the goods and services cannot be obtained in a timely manner through an open and competitive bidding process. A rebuild of the magnitude the City has undertaken would typically be planned and executed over 3 to 5 years. Bulletproof and City IT resources completed the work in four months. The total overall projected cost of the cyberattack is $2,950,000 plus HST. The City has insurance through AIG which will be leveraged to recover costs. The City's response team estimates that at least 85% of the total cost will be submitted for insurance recovery. The cost that may not be covered by insurance, in the range of $400,000 to $500,000, will be absorbed into the IT operating budget from applicable reserves. Mr. Collin noted that insurance covers the cost of recovery of the systems that were in place at the time of the cyber-attack and not for improvements to the system. The cost that the City will incur, between $300,000 to $500,000, is to upgrade the system. These improvements would have been necessary over the next year or two; it is just being spent earlier than anticipated. Mr. Collin noted that initially, the ransom demand was kept private, in the event they needed to enter into negotiations with the hostile actors. It is now known with certainty that the City will not pay the ransom demand. When first contacted by the hostile actors/criminals in late November, the ransom demand for the recovery of the City's networks, with no guarantee of recovery, was approximately $17M. That price continues to rise and as of March 31st, sits at $42M. 0a Finance Committee Meeting Open Session March 31, 2021 Moved by Councillor Reardon, seconded by Councillor Norton: RESOLVED that as recommended by the City Manager in the submitted report "Cyberattack — Restoration Costs and Projected Recovery Estimate," the Finance Committee: a) Acknowledge Information Technology ("IT") infrastructure and services procured for response and rebuild of the IT network due to the cyberattack is authorized under the emergency clauses in the Saint John Procurement Act; and b) Receive and file this report. MOTION CARRIED. 1.5 Preliminary 2020 Operating Results Ms. Arbour reviewed the submitted presentation, "Preliminary 2020 Operating Results." 2020 brought several unusual events including a cyberattack, COVID-19 pandemic, and a significant restructuring process. The 2020 results are not final and subject to change, but no unforeseen material changes are anticipated. $4.25M of the provincial short-term financial assistance of $10.4M is expected to be used in 2020, bringing the three-year total to just over $10M, or 45% of the total amount (approximately $23M) approved. This was possible due to the significant changes made to the organization beginning in 2019. Mayor Darling suggested that an after -action letter be sent to the Premier's Office, local MLA's, Minister's Office and the Auditor General highlighting that the City was fiscally responsible with the use of the short-term financial assistance, using only $10.36M of the $22.81M available, through good fiscal stewardship. In addition, a press release be made to inform the public that the money was managed very carefully, and how the money was used. Although the support was needed and appreciated, the end goal was for the City to stand on its own. Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that the City of Saint John send a letter to the Premier's Office, local MLAs, Minister's Office and the Auditor General and a press release held to highlight the facts related to the use of the short-term provincial assistance, noting that the money was used in a fiscally responsible manner and acknowledging that the support was appreciated and needed and not misused, upon the completion of the audit by the province. MOTION CARRIED. Moved by Councillor Norton, seconded by Councillor Reardon: RESOLVED that the submitted report "Preliminary 2020 Operating Results," be received for information. 11LAIIQI[eIL[aL : "Ilk 11 Adjournment Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the Finance Committee meeting be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on March 31, 2021 was adjourned at 5:55 p.m. 3