Sound check. 1 2 3. Sound check. 1 2 3. Good morning everyone and welcome to audit finance and administration committee. Today is Thursday June 18th. My name is Jeff Bey. I'll be your chair this morning. Joining me in chambers, councelor Brad Clark, councelor Rob Cooper, councelor Moren Wilson. joining us online, councelor Esther Paul's, Mark Tatterson, and Alex Wilson. As we have quorum present, I'm going to call this meeting to order at 9:30. Please remember folks in the gallery and around the chamber today, please ensure that your electronic devices are turned to a nonaudible function, which is to say, please make them silent. There are no ceremonial activities today. So, I will move directly to item three, which is approval of the agenda. If I could have a mover and seconder to approve the agenda as presented. Assuming we have no changes, I'm going to look to the clerk to ensure we have no changes. >> There are no changes. >> Thank you, >> Mr. Chair. >> So, I'm going to look for a mover and a seconder. Seeing councelor Tison, seconded by councelor Moren Wilson. Thank you. Any questions, comments on the agenda? Seeing none, a show of hands, please. Please indicate your vote in favor. Seeing the hands up, thank you. That is unanimous. We're moving on. Declarations of interest. Are there any declarations of interest today? Seeing none, we're moving now to the approval of the minutes of the previous meeting. This is item 5.1. These are the minutes from May 28th and the close session minutes as well from May 28th. If I could have a mover and a seconder to adopt the open and closed minutes of the meeting. I believe I saw councelor Clark. Seeing a seconder in councelor Tatison. Thank you. Any discussion on the minutes? Seeing none, all in favor please indicate your hand vote now. That is unanimous. Thank you folks. We're moving on. Delegations. So we have some delegations this morning. Um before we begin, just a reminder to our members of committee that the questions of the delegations are for clarification purposes only and not for debate. And to our delegates listening, you will each have five minutes. There will be a tone at the 4minute mark if you're able to hear it. I'm not sure you will be. And at the five minute mark, a second tone at which point I'll interject to kindly ask you to wrap up if we are still in the midst of your delegation. So we're going to begin with Michelle McDonald. If you could turn on your camera and microphone to begin and as soon as you're ready, Michelle, uh you will have five minutes. Nice to see you this morning. Please proceed. >> Thank you. >> Good or good morning members of committee. Thank you for the opportunity to speak today. I'm here to discuss concerns regarding the city's use of prepaid payment cards for Ontario Works recipients and whether this payment method aligns with the principles of accountability, transparency, and value for money that the taxpayers expect from public funded programs. Let me be clear, this is not a criticism of individuals who rely on Ontario Works. The program exists to support vulnerable residents and should continue to do so. My concern is whether sufficient controls exist to protect public funds and maintain confidence in the integrity of the program. Ontario works policy recognizes a var variety of governmentissued identification documents as acceptable proof of identity including passports, birth certificates, driver's license, immigration documents, and Ontario photo cards. The same documents are routinely accepted by financial institutions for purposes of opening up a bank account. The same re recipients are also required to provide proof of financial info from bank accounts to qualify for these benefits. I am uh if an applicant can establish their identity to receive Ontario Works benefits, it is reasonable to ask why a traditional banking relationship is not prioritized whenever possible. Instead, increasing reliance appears to be placed on the prepaid debit cards. Unlike a traditional bank account, these cards raise a number of questions regarding oversight and accountability. Funds can be accessed through purchases, cash withdrawals, and transactions occurring outside Hamilton, outside Ontario, and even outside Canada. This creates an important public policy question. How does the city ensure that the recipients remain eligible and continue to meet residency requirements if benefits can potentially be accessed anywhere in the world? What monitoring exists regarding the issuance and use of these cards? What safeguards are in place to identify suspicious activity, misuse, and potential fraud? What reporting is available to the city to ensure that public funds are being used for their intended purpose? These questions become even more important when viewed in the context of the city's ongoing challenges with Ontario Works overpayment program. uh integrity committee has heard repeatedly about overpayments, recovery challenges, and the need for stronger oversight. If the city is serious about reducing waste and improving accountability, then payment mechanisms should not be exempt from this scrutiny. Every dollar issued improperly is a dollar unavailable to residents who genuinely need assistance and a dollar that taxpayers are ultimately expected to absorb. There is also a practical concern for landlords. Ontario Works includes a shelter component intended to support housing stability. Yet, many landlords require direct payment, certified funds, electronic transfers, or other payment methods that prepaid cards may not easily accommodate. If shelter allowances are being issued through the system that creates barriers to paying rent, then committee should ask whether the delivery mechanism is supporting housing stability or inadvertently undermining it. Today, I am left to ponder the following questions. How many Ontario Works recipients currently receive benefits through prepaid cards? What monitoring occurs regarding the use of these cards? What controls exist to identify fraud, misuse, or ineligible recipients? How does the city determine whether benefits accessed outside the jurisdiction should remain consistent with eligibility requirements? What analysis has been conducted to determine whether prepaid cards represent the most accountable and most costeffective payment method? Has the city evaluated whether stronger banking partnerships could reduce risk and improve accountability? The public expects compassion, but it also expects stewardship. Those two objectives are not mutually exclusive. Strong oversight protects taxpayers, protects program integrity, and protects the long-term sustainability of Ontario Works itself. Thank you for your time. I welcome any questions. Thank you, Michelle. Uh, right on time with 20 seconds to spare. So, thank you for that. Uh, I'm looking around the chamber now and I see that we have some questions from committee starting with councelor Brad Clark, please. >> Good morning, Chair Bey and good morning, Delegate McDonald. I'd like to ask the delegate, how did she come to find out that prepaid cards were being utilized in Hamilton? through the chair. Um, I read the policy. >> But do you know that they're actually being used or you just found it in the policy as a permission to use them? >> No, I actually read the policy and I have friends that work in the shelter and outreach system and I started to inquire and they confirmed it. >> And they confirmed it. Thank you. I appreciate you attendance today. Thank you. >> I'm not seeing any other questions for you, Michelle, but thank you for your delegation. Um, I think at the appropriate time, there could be an opportunity for members of committee to ask staff uh questions should they I know that I may have a question or two. Uh, so we'll do that upon the conclusion of all of the delegations, which should be the normal course of action here. You're welcome to watch online, Michelle, through the YouTube channel. And again, thank you for attending today. Okay, seeing that there are no further questions of the delegate, I'm going to go next to 6.1B Havi Hussein virtually. Havis, I understand that you may be delayed. So, I'll call a second time. Havis, if you're there. Okay. If not, we're going to go to uh 6.1C, which is Rosemary um small business ownership landlords Ontario virtually, and then we'll cycle back to see if Avis was able to join us. So, Rose, if you are available, you may turn on your camera and microphone. There you are. Nice to see you this morning. Thank you for joining us. And uh if you want to begin, you've got five minutes. And at the 5m minute mark, I'll interject just to see where you are and and hopefully we can get that all wrapped up. Okay. Oh, we can't hear you. You're going to have to turn on your microphone first. >> Okay. Is that working? >> Yep, we can hear you fine. Please proceed. >> Wonderful. Okay. Good morning, chair and members of the AFA committee. Thank you for the opportunity to speak today. My name is Rosemarie and I am the chair of Solo, Small Ownership Landlords of Ontario. We have 8,500 members. I am here to discuss a simple existing tool within the Ontario Works program that has the potential to help prevent homelessness, reduce emergency assistance costs, police property visits, and improve housing stability for some of Hamilton's most vulnerable residents. That tool is Ontario Works Directive 3.7, commonly known as Pay Direct. Many people are unaware that this authority exists. In fact, it may be one of the best kept secrets within the Ontario Works system. Directive 3.7 is supported by section 18 of the Ontario Works Act and section 61 of Ontario Regulation 13498. It allows Ontario Works administrators to direct a portion of a recipient's financial assistance directly to a landlord or utility provider on behalf of the recipient. The purpose of the legislation is straightforward. To prevent housing loss and ensure that basic needs are met when a recipient is unable to consistently manage these critical expenses. The directive specifically identifies situations where pay direct should be considered including a demonstrated pattern of misusing assistance resulting in insufficient funds for food or shelter. Frequent late uh payment of rent or utilities. Rent or utility arars. Risk of eviction or utility disconnection. circumstances where the misuse of assistance has harmed or is likely to harm members of the benefit unit. Most significantly, the directive states that when a landlord confirms that eviction proceedings are being initiated because of non-payment of rent, the city is expected to immediately establish a pay direct arrangement to prevent housing destabilization. This is not a new program. It does not require a consultant. It does not require a pilot project. Directive 3.7 is one of those practical solutions. It is available today. It is authorized by law and it costs little to implement. And for some of our most vulnerable residents, it may be the difference between maintaining housing and becoming homeless. I would like to give two examples of uh landlords, housing providers who have been impacted. Sweet 4 at 897 Barton Street East. Tenants in 2021 stopped paying rent. When the landlord asked OW to pay direct, OW replied, "We can't help you. It's the tenants decision and subsequently the tenant claimed bankruptcy and not only did they not pay, they are permitted by bankruptcy law to stay." The total rears of $6,889 was a financial loss to the landlord. One of my commit questions through the chair is who is going to make that landlord whole. The second case that I would like to present is at unit 2 7 Proctor Boulevard also in Ward 3. Due to the same process of Ontario Works in Hamilton refusing to assist, one of the clients was convicted in the Ontario Court of Justice on January 20th, 2026. This would never have p been pursued if the landlords had received from support in Ontario works own policies. That same tenant um has uh also caused landlords harm at 100 Park North, 44 Campbell Avenue. >> So, I have to interject for a quick second. Um yes just been advised that we we do do not want the disclosure of addresses to take place during the delegation unfortunately. So if you could just >> uh keep it to um descriptions but not specifics on the uh specific addresses that's not going to be uh able to Okay. >> Okay. All right. So the other three addresses there they're additional addresses um also in multiple wards and um ward four three and seven and um uh so in closing I urge council to uh ensure that this existing legislative tool is being fully utilized to support housing stability, protect public resources and help prevent homeless homelessness in our community. Thank you for your time and I welcome any questions. Thank you for that, Rose. We do have uh speakers list now with councelor Brad Clark up first, please. >> Thank you, chair, and good morning, Rosemary. Can I get an understanding of section 9.3, you're of the opinion that it has not been used in the city of Hamilton ever? Um it it's used if when original um lease at the very beginning of the lease if the tenant uh initiates it and agrees right from the beginning but after that it's not not used. >> So the tenant >> and it's directive 3.7 sorry. >> Yep. 3.7 sorry. And so my understanding again from what you're saying is it's your belief that the city of Hamilton refuses to use section 3.7 except if the tenant is the person who is requesting that utilization and that structure. >> Absolutely. And for clarity, um, a few years ago, because this has been something that we have been trying to fix and address through the different municipalities, I did have the opportunity to speak to a social worker in Toronto a few years ago and she explained to me that if it means the difference between securing housing stability that the when they do their investigations, housing, >> uh, they all day, every day they they make sure that they direct those funds to the uh the the housing provider who is providing housing for them. >> Okay. Um thank you. I'm sorry I got distracted a little bit with the alien talk in the background. Um, so you mentioned in your presentation, um, generically, you didn't identify anyone, but someone who ended up being convicted and went to jail. And it sounded like your inference was that it was a result of 3.7 not being utilized. Could you explain that please? >> Okay, so that 3.7 um the person did not go to jail but they were uh charged initially. It took some time. It went through the process and they were convicted in Ontario Superior Court. >> Convicted of what? >> Uh providing fraudulent paperwork. Uh so what they did was they signed a lease uh pretending that they were the landlord. >> And so help me tie the knot up, please. How would section 3.7 have prevented that? Oh, because these landlords, multiple landlords had come to um asked Ontario Works uh social workers that this person is not paying rent and this has happened repeated repeatedly with this person and Ontario Works refuses to pay direct to the landlord. So, this person was doing this over and over and over to multiple landlords. So finally there was uh uh like the case is bigger than what I'm explaining but the charge I think they dropped one charge or you know you know how they always negotiate >> but anyways this person has been wreaking havoc across Hamilton and there is no support from Ontario Works they keep arms length they say that we're not involved um this is a landlord tenant issue but they are receiving money from uh the Ontario Works program and they're not getting any assistance from Ontario Works to pay direct. So if this had if they if they had gotten support, this person would not now not have a criminal record. >> Thank you. My last question, chair, I know my time is coming to a conclusion. Um you represent the landlords of Ontario, not the landlords of Hamilton. Can you indicate your understanding as to whether or not this particular section in the legislation and regulations is being utilized in other municipalities? >> I I I do know for sure that it is being utilized in Toronto. Um as far as uh other municipalities, they have a system where they believe that it is only uh up to they must get the tenants permission. But when you find another municipality that says no, we don't need the tenants permission because we have it here in the policy 3.7, we can proceed. So we find that when there's a uh a huge social uh lens services lens uh from the social workers that they do not um they do not look at an address to both sides of the coin. So, as I said, we have another landlord who is $6,889 out and the person claimed bankruptcy and dur because of the bankruptcy law, they get to stay in the unit after they haven't paid. So, I would like to know how is that person going to be made whole? >> Yeah, that that qu that question chair is probably a chair for the province of Ontario, but thank you for your your questions today. Thank you, Council Clark. >> And don't have councelor Paul. Okay. I wonder if I could turn the chair over uh briefly to councelor Marine Wilson. I'm sorry I didn't give you any forewarning that I was coming. If I could ask a question of the delegate. Um just kind of continuing the the line of questions from councelor Clark. You mentioned that some other municipalities when they're and may maybe you can better clarify when they're made aware of directive 3.7 um they have changed their direction and enacted the the direct pay option. Uh if you have better examples of that where maybe there's been a a change of heart or change of direction from a different municipality. You mentioned Toronto already does this. Uh, are there other examples of other municipalities where this is either enacted or has been changed as a result of um them being made aware of the the legal option of directive 3.7? >> Okay. Um, no, I I don't know of any other municipalities that do it. And uh just to be clear, years ago when I spoke to this specific social worker and uh this is she explained to me that this is what she does. So, I believe that different social workers can make their own decisions from the files that they're um handling. But, um the bottom line here is the directive exists. It's in law and there's no reason that it can't be used and uh pro get provided support. So for example, if you have uh people who are not paying their rent uh taking the housing supplement and they cannot get Ontario Works to give it to the person who's providing the service, then that's another step of uh contributing to the the theft of payment of rent. >> Okay. Uh a follow-up question. Um, you cited a number of locations within the city of Hamilton where um, some alleged mispaint I don't know how to I don't know how to phrase it properly in the chamber. The money didn't go where it was supposed to go. >> Um, >> was any of that rent ever recovered that you're aware? >> None of the rent was recovered. >> Okay. And I think you gave about six or seven examples uh, across the city. Is that a fair question or >> uh no what I did was I gave two examples. The second example with the multiple addresses was from the person who was convicted. >> Understood. Okay. Uh but to your knowledge, none of these uh specific examples uh had a recovery of rented. >> No, zero. >> Okay. Thank you. I'll take the chair back. >> And I see that council Pauls has a question. Please proceed. Councelor, >> thank you. uh chair. Um this is interesting. I I didn't know all this which is uh very uh important to know that pay direct is the law that we can use and it is a tool. My only question is uh because I think councelor Clark uh asked a lot of my question is is it because we need permission by the person receiving the OW and if we do not have that permission we cannot use the 3.7 law. No, that's not correct because the law clearly states that you the purpose of the legislation is to prevent housing loss and ensure basic needs are met. So the the policy uh directive 3.7 clearly lists out reasons when the social worker can now um arrange for pay direct to be sent directly to the housing provider. Thank you for that because you did mention something with the permission of the uh the person that's renting and I thought that was part of it but if it's not those are good question to ask staff why we're not using the 3.7 because I can see it you know it helps uh homelessness people going on the street if we were to do that and pay the landlord so that they would have housing. So, uh, so those are the questions that, uh, I'd like to ask, um, do we need permission first of all, and I think you said it, uh, that in the beginning of the lease, we use 3.7, but after that, we don't. That's that's the part where if the tenant for example gets into a lease and they say um you know what I I'm on Ontario Works and I can have the money paid directly to you so you don't have to worry about payment of rent. >> If it's initiated at the beginning that's easy. The problem is is that if something happens later on, uh none of the social workers are willing to implement pay direct at the city of Hamilton after after the lease, they're into the lease. The other issue is when you have people who are um not paying rent repeatedly repeatedly. So, for example, they have a history of doing it to one landlord and another landlord and another landlord and another landlord. Every time that landlord contacts OW and they say, "Oh, we're going to do an investigation or we're going to uh look into this," they never initiate the pay direct. So, this they are allowing that person to bring harm, financial harm to multiple people in the city of Hamilton. If you want Yeah. If you want people housed, we need your help to prevent uh this from happening. >> Wow. That's a that those are question that I think we need to ask staff. Uh I did not know about 3.7 that we could do that. Now we know we can and uh it's in the legislated. It's law. We can do it. So I don't understand why we do not do it. And in your knowledge, it's not a Hamilton problem. It could be everywhere. Or is Hamilton one of the uh you live in Hamilton, right? So is that why you're pursuing this? >> No, I am the chair of Solo. So I represent landlords all over Ontario. >> Yes. >> Right. So we have 8,500 members. Um and you know when you think about it, it's not even a very large group because the number of investors across Ontario is about 597,000. >> Wow. >> Right. So we but we handle landlord sorry we mostly work with landlords who have been um having issues with non-paying tenants. So when we so the bigger stories that come to light are when you know we have landlords that say listen >> I'm now the fourth or fifth victim of this person. So we try to work with the city and we're hoping that they understand you know if you if there's not enough support it's aiding and abetting in the non-payment of rent. So you have the legislation, please help. >> Yeah, those are question we should ask. And thank you, Rose, for coming to speak. Uh you really uh it was it's really interesting to see what we can do and what we're not doing. So thank you. >> You're very welcome. >> Thank you, councelor. I believe we have an additional question from councelor Alex Wilson, please. >> No. Through you, chair. when we're receiving the delegates. I I don't have any questions for this delegate at the time. I don't I'm appreciative of the delegation, but when we're on receipt, please. >> Uh okay. Uh question for staff. >> Sorry. When we're on receipt, please. We're we're still on this delegation. >> Understood. >> Rose, we have no other questions from members of the committee. So, uh, thank you for your delegation and, um, there will be an opportunity for members of the committee to ask questions of staff before we receive the delegation. So, you're welcome to watch that on YouTube. >> Okay. Thank you. Can I just make one comment? Um, I know that you have we're trying to get a hold of HIV and he has sent in a recording, I believe. >> I believe that, uh, we'll sort that out on our end. Uh, >> thank you very much. >> All right. Take care. >> Appreciate it. >> Hello. I just called in. I would love a flight just landed. I I delegate. >> Hello. So, I understand that we have you uh prepared to begin your delegation. I have a stable connection. Okay. I just ask if Rose if you wouldn't mind uh exiting from the WebEx. Oh, I won't be able to log into the digital copy. I'm just literally calling on >> I'm going to ask you to repeat what you just said. It's not coming in terribly clear. >> Oh, okay. Um, no, I'm just calling in on my phone. Um, I don't have my laptop open, so it's just going to be very brief for my delegation. >> Understood. Okay. Well, you have up to five minutes, so please proceed. >> Okay. All right. Um thank you committee members. Um in the agenda I posted a recent article and a YouTube link of recent social um services fraud that happened in BC and um it just happened 6 months ago. So if um any of the committees or counselors wanted to take a look at the agenda at their own leisure um and watch the link u feel free to do so. Thank you. That's it. >> Okay. Uh I'll look to see if there's any questions for you His from the gallery and I see none. So thank you for your delegation and at this time now I would ask if members of committee have some questions that they wanted to ask of staff. I see count councelor Alex Wilson first on the list. Please proceed. >> Thank you through you chair. My questions are mostly regarding procedural elements. They don't have questions for staff and follow-up and I think that's why I'm kind of have more process questions with the clerk. So my understanding is that these delegations are about an ongoing audit which is why they're in AFNA as opposed to ECS but that audit was not on today's agenda. are staff from the auditor's office in the room in any I'm just kind of trying to get the sense like how did this delegation impact that audit in any way by having it come to AFNA >> so that I counselor I can confirm that uh assistant auditor general Bridget Nadard is in the gallery with us. >> Thank you. Um through the chair a question um on direction. My suggestion would be of direction. It's required that just so that our OW staff can be in the room as a matter of course when these delegations happen. Um our emergency and community services is the delegation that deals with every single aspect of Ontario works with the exception of any ongoing audits which of course come to audit and finance. I guess I'm wondering is unless there's an audit on the agenda or our auditors are talking about OW, would it not make more sense to have our staff from OW be in the room to hear these delegations to answer the questions afterwards and would that not happen by steering delegates towards this afternoon's committee for future delegations as these are repeat delegates largely? Um, so we can have this conversation with our staff in the room, have it efficiently. Um, I just worry that a lot of the questions that may be coming to staff right now might not be answered or if they are being answered, they're being answered because staff are now sitting in two committees when we could we have a committee that does o ow generally. So, I'm just wondering if the clerks would be able to comment on if it's because we don't have standing direction on what to do when there's this ongoing audit, but people are talking about or how can we close that gap so it's a little bit more clean in the future. >> Okay. So, first I'll just say that uh for the benefit I know you're not in the gallery today, but I do see a number of staff members in the gallery who are from the appropriate office might be able to answer, but I'm going to also go to clerk Trenum who has a a better answer than I do. >> Uh so, thank you, chair. Uh it's important to know that when delegations do come, first of all, the clerk's office advised them if there are multiple delegates that they are only providing new information. Uh but while staff do often attend when they see it's coming, staff are very rarely uh aware of the full content of the delegation as we don't receive a transcript or or information. So it's very difficult to ask staff to be prepared to answer in full some of these questions. And so my recommendation to committee is if you have questions for staff, they're unlikely to answer today, but you can always refer a delegation back to staff either to the auditor as well as uh healthy and safe community staff. They're at that point able to process your questions uh and provide a more wholesome response or have staff available to speak to a memo at a future date. >> Thank you through chair. My question is specific to if a housing provider came forward and wanted to delegate to ECS in the first year of this term, they would have been fine. We then said, "No, this should come to GIC as a matter of process just to make these conversations more efficient. I'm asking um that we can have a one-door conversation for OW and I'm wondering if the clerks are comment specifically on I understand exactly to that point, staff aren't in the room, they don't know what the delegates are speaking to. So if a delegate's signing up for OW in the same way that we redirect uh delegates on housing issues towards GIC now could we not redirect delegates on OW towards the emergency and community services where a director of Ontario works reports and all relevant staff are there to answer questions unless the audit which I understand is outstanding is specifically on that AFNA agenda where it is of course an AFA matter. >> Okay. I'm going to turn to the clerk. >> Yeah and uh through you to the counselor. Uh it's an excellent point and staff do take that approach. We look at making sure that it lands on the appropriate agenda often with recommendations that this is better to go here. Oftentimes delegates say I'm speaking specifically to audit. Audit is in the room. I would like to delegate to AFNA for that particular matter. Uh and we do respect that when it is reasonable to do so. Um if it's unreasonable, I have the authority to say no, this is far better suited to a certain committee and we would move the delegation at that time. Uh we do give staff the heads up that a delegation is coming wherever possible to ensure that at least the general manager is available uh to hear the delegation and be prepared uh in the circumstance where committee refers it back to staff. >> Counselor, >> thank you through you, chair. Um I appreciate that. Um I appreciate having those answers. I'll let other folks ask their questions and we can move this forward. Uh I think it is my note that the these delegations personally would have been better received at ECS given the content is about policy enforcement largely and the impact that may have on an ongoing audit but their policy questions whether their municipalities doing um and I think those are questions that are best asked by our staff working in that department. Um obviously I respect that our auditors may also be doing some analysis and some work and may have some feedback but that also may not be ready outside of when they're reporting back on those either. Um so with thanks. >> Okay. Thank you, Councelor Alex Wilson. We're moving on now to Councelor Brad Clark, please. >> Thank you, Chair. I understand the clerk's position and I agree with them. Um, the three delegates indicated that they wish to delegate respecting the Ontario Works Value for money audit. This is the audit and finance committee. So it makes sense that they be here. Um straying into the policy matters that happens with uh many delegates. Sometimes they don't understand the delineation of the different policies that we're trying to address and the right committee and the right department. So I'm I support the clerks. I would have made this the same call this morning. Um can one question that I have um is to the deputy auditor in their audit are they aware whether or not they are reviewing this policy policy 3.7 uh respecting prepaid cards. >> I'll turn it to the deputy auditor general >> uh through the chair. Deputy auditor general Bridget Manard. Uh thank you for the question. So we are considering anything that would assist with managing uh fraud risks better. So we will certainly consider everything that the de delegates have said today in addition to our other ongoing uh audit fieldwork. >> Thank you. I I appreciate that confirmation. Those are all my questions. >> Okay. Thank you. Uh up next I have councelor Esther Pauls. Please. >> Thank you. And I I think councelor Clark um uh asked the question. my question, right? Why aren't we using pay direct 3.7? That was my question and I heard the answer. So, thank you. >> Okay. Uh I've got general manager Grace Mater in the room who has some additional comments. General manager. >> Uh thank you through the chair. Grace Mater, general manager, healthy and safe communities. Um so just to clarify a couple of components um about the uh I'm sorry I don't have the exact um policy number that was cited but about pay direct we in fact do pay direct are over 1100 clients that are are being administered through pay direct we can take the information and the comments that were raised today and we can bring that back at a future date for a more wholesome breakdown um so because staff do have all the answers and we can prepare something That's good. Thank you. >> Okay. Thank you for that, general manager. Appreciative. Um going to turn it over to councelor Wilson a second time. And be it that I think we're sticking to the focus of audit uh when it comes to this particular meeting. There were some questions that came up for me and perhaps that might be included in the scope of work when that comes back just pertaining to um discretion in terms of ability uh for the frontline social workers to change from one methodology to another how that might work and whether or not that comes here or if I have to attend ECS maybe you could advise. Um Toronto was listed as a municipality that is undertaking um a more I would suggest definitive use of directive 3.7. That was the intonation that the delegate made. I just wanted to verify that. And any other municipalities that staff might be aware of that would be uh using directive 3.7 more vigorously, for lack of a better term. And I see Grace Mater is nodding. So, thank you for that and look forward to to hearing that back and I'll take the chair back. Okay. I don't see any other questions for staff. Therefore, we are at the point where we are going to receive the delegations. If I could get a show of Sorry, I need a mover in a second first. Moved by. Somebody needs to put their hand up. Thank you, Councelor Tatison. Councelor Esther Paul's please indicate your hand vote now. All in favor of receipt of the delegations and that is unanimous. Thank you. Moving on now to item 7.1 FCS26046. This is under items from information bill 97. The plan to protect Ontario act budget measures 2026 update to MFPA Mippa and implications citywide. I'm going to ask uh if there are any questions of staff on the report and I have councelor Brad Clark up first please. >> Um thank you chair. Um so can I speak to and have the privacy office speak to I think I'm on page three of six in the report according to Adobe sometimes doesn't work out. Um, it says the privacy in 2025, the privacy office handled 56 privacy incidents, 125 consultations, and 38 projects. Can I get an understanding of what a privacy incident is to the city of Hamilton? >> Okay. I'm looking to the clerk first for response. So through you, chair, I'm I'm going to invite um our our head of privacy, our privacy specialist, um Alicia, down to a microphone to be more wholesome in my response. But uh I'll start by saying uh an incident is often a documentation of either a complaint uh or even a question from staff that are we following the correct process. uh it may come from a privacy impact assessment or or some other policy related process. Uh but that's where it would initiate and we treat it as an incident because we don't know what it is until it's investigated or or followed up on. Um and I'll look to Alicia to perhaps expand on that. >> Okay. Alicia, if you wouldn't mind introducing yourself and then you can continue with further explanation. >> So through the chair, I'm Alicia Attorney Fost, corporate privacy specialist for the city. Um, the clerk pretty much explained it exactly. Uh, I don't know if I have anything else to add. >> Well, thank you. Thank you for, uh, introducing yourself at least. >> Thanks. >> Um, going to turn it back to councelor Clark for additional questions. >> Thank you very much. So, going back to my question with regards to the privacy incidents, um, do we have a public report annually indicating the privacy incidents? Obviously not indicating the individual or individuals who uh privacy has been um we failed to provide that privacy. Do we get a report showing exactly what happened? What's going on? >> Clerk Chum. >> Uh so through to the counselor uh no a public report wouldn't exist for that. Uh however, there would be notifications for any incident that perhaps led to the decision that this is actually a breach. An incident doesn't necessarily mean anything went wrong. It could be a complaint that led to nowhere. It could be a com uh a question from staff that we want to confirm we're doing something correctly and it turns out they were where um perhaps something was incorrect. Uh especially if it was before anything went wrong. uh we would investigate, provide advice, assist with mitigating that risk before the incident became a breach. So in those situations, they're more learning opportunities and documented internally just as advice and and assistance than it would be some report of an incident. So an incident in itself does not mean that anyone's personal information was breached. In those situations, individuals are notified. The IPC may be notified. That's the Information and Privacy Commission of Ontario, our regulatory authority, uh, andor council and the public depending on the breadth and size of the incident or the breach in that scenario. >> Okay. Councelor Clark, >> I guess I feel slightly uncomfortable without having I feel uncomfortable with it being an internal process. And so if you're saying that there have been 57 privacy incidents, then I would think as a governor that I would want to have an annual report of the number of privacy incidents, how each one what it was, how what did we do? Did we issue a a public apology? Did we contact those whose privacy was breached? It it seems to me that we get none of that. And so it's a bit challenging to understand whether or not we are improving in our process to ensure that privacy by design across the entire organization is being taken seriously and being dealt with because we have no evidence to that because nothing's coming to us. So can I just get the clerk to to speak to that please? >> Certainly clerk. >> Yeah. So chair, if committee and council would like to provide direction for us, we're happy to provide any reporting that council would like to see. What I will say, and I'll elaborate on perhaps with an example, um a privacy incident. Uh we had one recently where an individual uh was at a a desk and uh they had difficulty finding something on their phone. They put their phone down on the table and uh asked the the clerk, "Well, I don't know what to do." And the clerk said, "Would you like me to assist you?" and they helped with the phone and then the individual stepped away saying the the clerk stole my phone. They stole my personal information. They took my phone from me. Uh that was a privacy incident because we investigated and that wasn't the case. Um the phone wasn't taken. It wasn't touched. It was left on the table the whole time. Um but that's an incident. So some of them we can report. Some of them might be more delicate to do so or difficult to do so. But if it is council's desire to receive information on this, we're happy to to provide that data. >> Councelor Clark. >> Uh thank you. Does council not receive freedom of information report annually? >> So we through through your chair we report to the information and privacy commission. We place it up on our website. Um and uh we do have a report coming on uh a number of years to council on recent uh FOI requests as well. Those are statistics and um a little more specific and if you would like something mimicking that on the privacy side again we can we can do that work. >> Yeah, I think we should have that and so at the appropriate time I'd ask that when they report on their FOI information to council. They also report on anything with regards to privacy incidents in the previous year. >> Okay. I'm going to look to the clerk to see if you require a formal motion to that effect or if you can take it as direction, but I'm seeing that a formal motion. So, uh, councelor clerk, >> I'll move what I just said. >> Okay. We'll play back the tape and it is a direction to include >> the privacy incidents in the annual FOI report. >> Okay. And councelor Cooper is your seconder. And I am looking to see if there's any questions on this motion. Seeing none, I believe we are going to have to do a electronic vote on that, but I'm going to turn to Oh, it is a show of hands. My mistake. Okay. Apologies. All in favor? Show of hands. And that is unanimous. Okay. Any further questions on item 7.1? Seeing none, um I'm looking for a mover and seconder for the receipt of the report. Seeing councelor Clark, seconded by councelor Tatison. All in favor of accepting this information report. And I see that is unanimous. Thank you, colleagues. We're moving on now to item eight, items for consideration. Beginning with 8.1 peed 26010, delegated authority to accept consignment merchandise. This is a report brought forward, I believe, by Oh, there you are, Director Abbott. Um, what I'll do is, uh, begin with a mover and seconder to approve the recommendations in the report and then I'll look to see if we have any questions. I have councelor Clark, councelor Cooper's mover and seconder. Opening up the floor now to questions on the report. I have councelor Alex Wilson, please. >> Thank you. It's mostly kudos, but I'll finish with a question. I'm so excited by this change. I think this is such an exciting opportunity to have local businesses um participating at our Hamilton Museums, participating right downtown at the Lististerblock tourism site. Um, I I just really do think that this is an incredible step forward for kind of getting those local artisan pieces there and really showing what makes Hamilton unique as opposed to having say a mass-produced uh shirt or a mass-produced something with maybe a a Kitschy or a Hamilton logo, but really going to, you know, local products in our in our stores. So, I think that makes so much sense. I'm just wondering uh if uh staff would be able to comment on what does the intake or the outreach process look like? Uh so when this change starts happening is there kind of a start date and if vendors or local providers are interested um in say pitching or having these conversations when does that start and what's what's the best place to have those conversations be kind of in Tok or where's the first front a good front door for those conversations? >> Okay I'll turn it over to Director Abbott if you could introduce yourself and then respond. >> Thank you Lisa Abbott director of tourism and culture. uh to respond through the chair. Uh great question. Uh the tourism and culture team uh do a lot of work with the cultural community in Hamilton. Uh the staff who are um curating uh the products that are in Hamilton gift shops uh currently we have already started the program. Um and staff do spend time scouring um stores currently uh where um where products are sold. Um a lot of it is uh through word of mouth. Um and it's also a matter of uh promoting on our um social media channels to say this opportunity is available uh and then we would engage there in in conversations. Thank you. >> Thank you, Councelor Wilson. Any followup? >> No, that that makes sense. Uh if folks are interested as vendors in reaching out, they can reach out to either tourism culture directly or maybe through their counselor's office to get in touch. Um, but it sounds like that working relationship's already started and really really again really really excited about this. I think this is a great continuous improvement report. >> Okay, thank you for that. Councelor Alex Wilson. I see no further questions. Let me just add as a comment. Uh, director uh very appreciative of this new option. Speaking as somebody that uh works in the retail space, owns a retail business. You buy 100, you sell 50 at full price, you sell 25 at a discount. You may never ever sell that last 25. And I think that this is going to lead us down a path of more responsible use of resources and as the counselor said uh previously allow for a more localized uh focus when it comes to the offerings in our uh our city facilities. So very appreciative of this work. Okay. So this has already been duly moved and seconded. Um oh sorry I see councelor Mark Tatterson with a last minute question. Please proceed. Councelor Todson, >> just a question about uh the art gallery. Is this applying to the art gallery as well or just the museums? >> Okay, Director Abbott. >> Thank you to respond through the chair. Um the art gallery being a third party, they operate their gift shop entirely independently of themselves. Um having said that, they do operate on the anecdotally I can say they do operate on the same philosophy. Uh, and we are in conversations right now to also um offer art gallery gift shop product in our museum locations and vice versa. >> There you go. >> So, more to follow on. Thank you. >> Fantastic. Thank you so much. Okay, one final scan. Seeing no other questions, uh, we're moving to an electronic vote. Please indicate your vote now. See, councelor Tatison in favor. We're just waiting for the remainder of the electronic vote to populate in our system here. Councelor Paul's in favor. Thank you. Should be up on the screen now, folks. And that passes unanimously. 70. Thank you. Colleagues, we're moving on now to 8.2, which is FCS21 082M. This is the utility billing transition June 2026 program update and an extension of water and wastewater billing penalty and interest relief. If I could have uh a mover and seconder to put this on the floor. There are likely some questions. So I'm going to look to colleagues to begin. A mover and seconder. Seeing councelor Moren Wilson, seconded by myself. Okay, I will do that. Um any questions of staff on this update or would we like any kind of a highle overview of what's taking place? seeing a nod from some members of committee. So I will turn it now. I don't know if director Pereira is going to take the lead on that. If you wouldn't mind introducing yourself and then proceed with the highle update of what's taking place in this report. >> Good morning. Clayton Pereira, director of revenue services. Uh happy to provide uh a quick summary. Uh, this report seeks council approval to extend the temporary waiver of penalty and interest charges on Hamilton Utilities billing accounts from June 30th to September 30th, 2026 with regular penalty and interest charges resuming on October the 1st. The recommendation reflects the ongoing transition from Electra to the city's new Hamilton utilities billing system, which now serves approximately 160,000 water wastewater accounts. Implementation is largely complete. As of early June, 99.6% of customers have received their first bill and key components of the system are in place, including multiple payment options, a customer portal, and dedicated customer service accounts. Approximately 33,000 customers have also enrolled in pre-authorized payments. At the same time, this remains a significant transition. Some co customers experienced longer than normal billing intervals for their first invoice and staff continue to receive a high volume of inquiries related to account setup, billing timelines, and payment arrangements. A small number of customers have not yet received their initial bill and are being prioritized. The proposed extension is intended to provide additional time for customers to fully transition to the new system, complete the pre-authorized debit enrollment, and better understand their billing cycles while maintaining a consistent customer focused approach. Staff anticipate that by September 30th, most customers will have gone through multiple billing cycles and transition related inquiries will have stabilized. At that point, standard penalty and interest charges would resume in accordance with the city's bylaw. Thank you. >> Thank you, director. Um, it's going to begin with councelor Morin Wilson, please. >> Thank you. Thank you, director. Uh, just a a single question from me. Um, previously we had considerable discussion on our efforts on the pre-authorized payment and I do know the report references the number of 33,000 u, but I wasn't able to understand and I I know you will be able to help me understand our success rate in trying to um what percentage uh of pre-authorized payments that were active previously um where are we now um in that regard? Thank you >> to the chair. Uh the uh those that were on pre-authorized uh with electra uh and completed the form with Hamilton utilities billing is about 60%. Uh since then we have had actually net new come online and now it's the confusion is are they part of the new or part of the old but 60% is where we have uh had a line in the sand on those that were with elector previously. >> Thank you for thank you. >> Thank you councelor Wilson. Turning now to councelor Rob Cooper please. >> Thank you chair. Uh and to the director, we have 160,000 accounts. How many would you say in the first month have paid on time? >> Director uh truth the chair. Uh uh we are looking at about 60% that have actually paid as well. >> Okay, thank you. So 40% outstanding. We know some of the issues are around um you know still a few people to be build. Do we know what the other issues are? >> Director the chair is that in reference to the ones that have not been built? >> That's correct. Yes. The 40%. Yes. Or not not sorry not the ones that haven't been built but the ones that have been paid. So if we say you know uh we got 160,000 um 99.6% went out. Um we know 60% paid 40% did not pay. uh what are the reasons around the 40% did not pay? Was they didn't receive their bill? Did they have a problem with their bill? Do we have a sense of what what how that what that 40%'s all about? >> Uh to the chair, one can only speculate, but uh the the number of inquiries that have uh come through our contact center has essentially been um making payments through the financial institutions. that uh took a little bit, but we're in place with all uh um I I guess I want to call it uh first tier banks um and uh those were all in place uh by the end of April. Uh and we did have a few stragglers after that. The other was um just making uh just having a look through the portal and trying to set up pre-authorized debit through the portal. again a new uh avenue that they have not been um accustomed to. So the contact center have been able to navigate that for those particular customers. Those are the only sort of um items that I can speculate on other than uh affordability that can't really speak to. >> Thank you and through you chair. Um the comments my office has been getting we getting a lot of calls and concerns when I'm in the community and it seems to be around the fact that the way the metered um recording uh through um the previous uh vendor that was providing it is different than what it is now and people are having a hard time understanding the difference. Their challenge isn't about the pe the period actually changing in terms of what they're being charged for. Their challenge is because they don't understand the the the difference in the metered amount showing up on their bill and the amount has significantly gone up that they're paying and so they're having a hard time trying to reconcile this. So I don't know if there's some communication we can put out on the website or something. I'm just trying to explain how that has changed, if you want to say the metered um approach to billing and what's showing up in the billing, what we're doing versus what the previous vendor was doing. Um I don't know if that's something we could do or not, but uh otherwise we'll just be setting up an awful lot of meetings because people are calling up asking for these uh conversations to understand why their bills have gone up and why the way we're expressing the metered reading has changed. >> Director to the chair, happy to take that into consideration. Um I will share with you that uh those that uh did encounter that particular issue were about 1300 accounts and uh we are um doing several things. Uh, one of them also working with the council offices very similar to uh what we have done with uh other some of my other portfolios having virtual lunch and learn uh type sessions to uh share some of the experiences and provide some sort of uh communications as well as updating our FAQ on the web page as well as uh the uh voice recording uh for those that are calling into the contact center. Um and lastly, uh those that were impacted were provided a letter up front that they were going to see, um their bill, uh delayed, uh just through the transition process. >> Okay, just before uh we go back to you, I do have some additional followup from the general manager. >> Thank you. >> Through the chair, Mike Ziggger, general manager, finance, corporate services. Uh I just want to acknowledge and appreciate and thank uh elected officials in their offices. It's uh through that communication and that uh that channel communication from uh your staff to director Pereira and his team that we are implementing measures in terms of improving the website content to councelor Cooper's question in regards to you know some of the challenges with respect to implementation. We know that some citizens were making electronic payments to the township of Hamilton and so we made improvements to the city's website providing instructions to uh t or to rateayers as to how to properly set up the their payee accounts uh and also acknowledging it was through uh elected officials in your offices uh that caused staff to bring this report forward. So we did hear that some uh citizens and rateayers were having challenges with respect to the timing of their first payment and second payment and so staff wanting to uh to be compassionate and recognizing those challenges we are recommending what is before you today. >> Thank you. And just one one more question. Why did we change the way we were doing the metered um uh I say quantification on the bills? It's very different from how it was on the previous bills. Why did we change that as part of this exercise? >> Director. >> Uh to the chair. Great question. That was just an intraim measure as we were going through the transition and it was mostly to ensure testing and validation. We are reverting back to how it was before and as mentioned it was only 1300 accounts that were impacted but we are reverting back to uh the regular billing period cycle. >> Okay. Because I guess the comment I'm getting from people is my previous bills were were consistent and now I have all this fluctuation all over the place and my bills gone wild on me and there's just you know people are saying why and uh and and it's not being received well and uh that's what's really generating the complaints my office is receiving right now. So I'll leave that with you. Thank you chair. >> Thank you councelor Cooper. Moving on next to councelor Mark Tatison please. >> Uh question for director Pura. Uh you mentioned that staff is very busy with this transition. So my question I guess my observation it's my understanding that the original collection of the storm water management fees were dependent upon this water billing transition being fully in place for July. So my question is has council's decision to delay the storm water management fees until next year has that been beneficial to staff? >> Truth chair. Great question and uh I will say this was an a huge undertaking and a quite a complex one. Uh having that uh opportunity to focus firstly on water wastewater certainly helped uh and uh and phasing the process uh in for storm water. Um that said, our billing system has certainly got the capability and capacity to add further charges uh with ease. Now knowing that uh the transition from uh Electra utilities to Hamilton utilities uh for all intents of purposes have gone uh quite well. >> Councelor, any followup? Um I'm just not understanding the answer if that was like if the storm water would have complicated the issue. I thought that uh storm water collection was dependent upon the full billing and now that we're delaying for three months. Um is that is that is there a relationship there to that? I think what the director relayed back was appreciation of the extra leeway that the delay has afforded but noting that now that they understand the system they are fully able to implement the new rate uh on the due date when it does come forward. Uh I believe that's what the director has relayed. >> Okay, perfect. Thanks very much. >> No problem. Thank you. I'm going to turn it over now to councelor Moren Wilson if you wouldn't mind. Uh I have a couple of questions. Um first I do want to acknowledge and thank the uh the HUB office. I guess we're calling it the hub um for the the assistance. My office staff have been frequently frequently uh working with the the hub staff and with the director. And I appreciate I feel like you you mentioned 1300 maybe problematic uh accounts. I think all 1300 were in war 10. So, um, there there have been some bumps on the road, but I do appreciate the exact word. >> Um, a question in in regards to in this new billing system, uh, what some residents may or may not realize is that your first block of, uh, billing is done at a certain rate using a threshold of however many cubic meters and then your next block is built at a different rate. And there's a concern amongst residents that due to some of the delays inadvertently they may be pushed into that second block and then that may skew or change the outcome of their billing. Wondering if you could comment if this is actually happening if there's a remedy. Uh response from the Hub office to the chair. Uh firstly my apologies if all of those were targeted in your specific wart. Uh that was certainly not the intention. Um but I will uh share with you and and it's a great question uh that is actually uh uh incorrect. The despite the billing period being uh longer than usual for the 1300 um uh the the system is smart enough to realize that um it prorates the consumption based on the number of days. uh so it calculates it on a per day basis and uh the rate that's applied is on the first year the first block. So it is smart enough to realize and we have done a spot check on a on several of these in uh accounts and we have found that there's no issue at hand uh that all the accounts that uh that uh came to your specific ward uh were indeed charged at the the rate that it would have been charged regardless of the billing period. >> Okay. Okay. So, just to clarify then uh even though uh residents may be experiencing some different charges than they're accustomed to some potential higher billing, it is all being done at the lower rate based on however this algorithm where the system is working as opposed to an intention to bill it at the the second tier. the system has figured it out and residents can rest assured, rateayers can be assured that they're not being overcharged accidentally through a delay in billing. To the chair, that's correct. >> Okay, thank you for that. Um there's there's a lot of confusion amongst residents and rate payers. Um hub and the billing is handled through the financial corporate services division, but the actual physical infrastructure and the actual water is handled through the water division. And there is some confusion out there as to you know people call up and say why is water doing this to me or some something of that uh nature. When it comes to the physical infrastructure the meter for example a number of residents have reached out and said I don't have faith in my my meter anymore. I would like it tested. I think there must be an error. Is that something that's done through your office or through the water division? If residents had concerns about the function of the meter at their their business or their residence, what would be the steps taken to undertake that review? >> To the chair. And again, a great question and I think this is one of the uh items that um we can certainly do uh a good job, a better job of uh advertising this on our web page to navigate between uh who does what. Uh the Hamilton utilities billing uh as the name says primarily does the billing and collection. Uh any infrastructure uh does go to Hamilton water as was the case uh even with electric utilities. Uh so uh so naturally uh the triage would be in that regards but we have also received calls regarding uh uh meter meter issues or uh issues with um uh just the uh infrastructure itself and those have been triaged to Hamilton water. >> Okay. So if I can summarize the the direct approach would be good to go to Hamilton water but if it goes through the hub office they're also able to redirect those concerns to Hamilton water to the chair. That's correct. >> Okay. And I believe chair that the general manager has a response as well through the chair. Uh we can take this offline. Um uh we could look at our past practices around customer service when a property owner uh rateayer has questions regarding their water consumption in the past and uh we can uh circle back to ensure we're continuing to provide this level of service. There is some guidance from city staff um including doing audits, doing tabs uh die tabs and toilets to make sure there are no leaks. And after uh those steps, if the property owner wishes to have an audit of their water meter, then that is coordinated between Hamilton Water and uh their contractor. And so, uh we couldn't circle back to ensure that that information's made available publicly and that we have that level of customer support for our property owners and repeaters. >> Thank you, J. >> Thank you, chair. I have two more questions if I could have a little indulgence. indulge away. >> Thank you. Uh with regards to um the I think I think you you characterize the director as uh a very steady influx of customer service inquiries coming into the hub office. Um, I make note that some of uh my constituents have made note to me of very extended uh wait times uh calling right at 8:30 in the morning and being 22nd in line in the queue uh having to wait for an hour or or up to two hours on the phone to uh reach a customer service representative. I'm wondering what measures are being taken to try to remedy this. If you could elaborate um for the benefit of all watching, please. uh to the chair. Uh since uh April 13th, our go live date, we have seen a steady increase in number of uh calls and email volumes coming in. Um originally we were averaging about 230 emails per day and about 900 calls uh going into the contact center. Uh and this was right at the start when the first bill was yet to be issued. Uh now that we are right into the second bill phase, we are seeing a steady drop. Um but what we have done and there will be communication uh going out uh to council just to uh advise uh them of the changes is we have increased the number of contact uh center u representatives uh uh by an additional six FTEES. Uh this is again from our uh contracted um contact center and the hope is that this will be an interim measure until we get to what we feel would be a steady state. Uh the steady state is what a lectctor would have uh felt on any given day and that's our hope and guideline that we would get to. Uh furthermore, we are looking at uh continuing to as we speak to council offices uh which we are very appreciative of to get a pulse of the types of questions that are coming. We are taking that as an opportunity to update the FAQs on the web page as well as the uh voice recording for those calling in so that while they're waiting, they're able to um listen into uh the frequently asked questions. And then finally, we are taking measures to also include these FAQs as part of the bills. Um so as you receive the bill they are also have that available and hopefully that would mitigate uh the plan but the major change would be the increase of uh contact center staff to um support the number of calls and uh emails coming in. >> Thank you. And just to clarify uh you said the the additional staff added to the front lines through the contractor. This is a third party contractor. So when um members of the public are calling in to the call center, they may not necessarily be speaking directly with an employee of the city of Hamilton. They'd be dealing with a contracted third party service provider. Is that correct? >> True the chair, that is correct. >> Okay. Final question. Um if we're not able to resolve uh the issues and we're still facing additional uh pressures um we do not have the ability to uh extend this uh what's being proposed here until the day after it expires. So it expires on the 30th. Our next AFNA is uh October 1st. Is there any comment on have I got the timeline right? If we find ourselves into uh the end of September and we're still facing some pressures and concerns, we would have to let this kind of lapse on Wednesday and then potentially bring forward a motion on the following Thursday, the 1st of October, in order to offer a further extension. Would I have that timeline correct? >> True. Mr. Chair, I was uh just trying to make eye contact here with uh Clicker Trenum. Um I don't have the uh calendar in front of me, but um I'll I'll I'll maybe uh take that away uh for consideration because I can't uh speak to that at the moment. >> Okay. Maybe I could ask and you can either take it as staff direction or perhaps I can make a motion. I would just like some report back to come to the next AFNA with uh possible options should we find ourselves in a position that we need to extend this measure beyond the current September 30th deadline. If I could, if it's required as a motion, I'm happy to make the motion. I'll look to the general manager, look to the clerk and see how this might be received. >> Uh through the chair, I'm happy to start. I see clerk Trenum looking to get up out of his chair maybe make his way here but but I can start and then clerk Trenum can offer much wiser guidance. Uh so the the council has cracked the next I believe uh scheduled AFNA after September 30th is October 1st. One option to provide the flexibility to staff is to amend the recommendation B in the report that currently stipulates uh the authority to extend to September 30th. If it's the will of committee to provide staff the delegated authority that if staff determine September 30th is still not uh generating the the compassion that we are wanting to provide to rateayers. And this is not delaying bills. This is waving of the penalties and interest. One option is to amend that date to a later date and that could be um end of end of October or early uh November. >> If if if I could just ask um sorry to butt into your questions. I was having this conversation with Clerk Trenum yesterday. There seems to be some uh questions about the capacity of council to make decisions. There's been some assertions made that I'm not sure are correct or clear. And with respect to the permissions to expend, if you would care to comment on this matter through the chair. >> So to the chair, sorry for moving positions on you here. Um, I I think we're going to provide some clarity. I'm hoping to bring a memo to council on this particular issue, but but let me be clear, council is still council and continues to have the authority of council right up until the end of the term. >> The only time that changes at all is if we find ourselves under restricted acts. Again, I'll be bringing a report to provide more clarity on that for this council as well as the accompanying bylaw. The comments made prior in through training and otherwise through the report around limiting motions really speaks to financial investments such as sponsorships through ward funds, right? >> Um use of of um reserve funding in certain circumstances and that's really what that speaks to and I'll hope to provide that clarity through a memo. But in this scenario, yes, council would still have the authority to make that decision and continue to act. >> Thank you for that clarity. >> Thank you, Chair. through you. Um I I just want to make sure that we don't run out of runway or that we don't accidentally find ourselves in a position where we're not able to offer an extension of this program and I'm not anticipating that we need one. I'm hopeful that we'll have all of these issues resolved. Uh but along that same vein, I'm uncomfortable with the fact that we could be in a position where we have an inability to offer an extension. Uh, and I'm I'm wondering what the remedy may be. Perhaps it would be best taken offline and I could bring it back at council as an amendment uh to this and I'm seeing some nods around the gallery. That that might be a preferred option. We can take this offline, but I just want to make sure that any decision that we make here uh allows additional opportunity to not find ourselves without the ability to extend this program. And I see the clerk may have a comment. >> Thank you. I think staff are clear on the thrust or the objective. I think perhaps some work might be had between now and next week on um the exact direction. But I'll >> That's exactly what I was going to suggest chair is that uh we can perhaps provide some better clarity at council. So if you'd like to bring this and lift perhaps this this section at council and we can provide better clarity on timelines and what that would look like. >> Fabulous. Appreciate that. Thank you chair. I'll take the chair back. >> Thank you. I see councelor Brad Clark for a first second time. I'm not sure but we'll go to councelor card please. >> Uh thank you chair. It's my first time. Um I'm trying to understand when Electro was doing the water billing, they provided um some type of program where they averaged the cost of water and then there was an average bill so that customers weren't surprised with a giant increase in their water because they're watering their flowers and gardens in the summertime during a drought. um that others who are filling swimming pools um don't find that their water bill jumps. I don't believe the current system that we have permits that. Can I get clarification from staff? >> I'll turn that to director Pereira. >> True the chair. Uh that is correct. our our current system does not, but we are looking to um review any of these options, including the one that um was raised. So, we'll take that away and we'll bring that back as a as a an additional convenience feature for for our rate payers. >> Okay. >> And and that's it exactly, director. It's it's a convenience for the rate payers. We have um 35,000 uh roughly uh residents who who pay their bill monthly. Um and many of them um appreciated the certainty of the budgeting process on their billing with Electra and I heard from many of them that were concerned that we were not providing it. And so I have indicated to them that while the current system does not provide it, that doesn't mean that we can't make the change uh once we have everything sorted out with this new system. Is that a fair statement for me to say to the residents? >> Tr that would be correct. >> Thank you. I appreciate that. Um with respect to the So the clerk's going to come back to us. This is really incillary to where we are on this, but it it came up. Um, can the clerk include any restrictions that council has with regards to committing um the next council to budget increases in the latter months of this cycle? Uh, can they include that um in their report back, please? Looking to clerk Trenum to see if there's a comment response. >> Uh chair, if I could just get clarification. So restrictions on the rest of this particular year, calendar year budget. >> Yes. as as we're getting into, for example, in September, um it would logically be that if we were going to make a decision that was going to bind the hands of next year's council with some type of contract that was rather expensive, people would question whether or not we had the authority bind that next year council. Why wouldn't they be dealing with that matter? Is there can you in your report indicate any legislated or regulatory prescriptions in that regard? I understand the lame duck council. I'm not speaking to that. That may or may not become an issue. Um but I was under the impression and whether it's right or wrong. council is still counsel for this entire term and they can make decisions as they see fit as council. Um can you just speak to that please clerk? >> Yeah so uh through you chair I can definitely report back with more specificity but uh where you see this played out is in the procedural bylaw that speaks to the reconsideration piece. So reconsiderations apply within the term of council um but do not apply outside the term of council. So as you can see a decision perhaps even made years ago might also tie a future term of council. Uh but they're not bound by the same reconsideration piece. Uh so it's a simple majority to perhaps overturn that. So short answer is yes, long answer is potentially but but I'm happy to provide that feedback. >> I appreciate the potentially but. Thank you. Thank you, Councelor Clark. Seeing no Oh, I have one more speaker and that is councelor Esther Falls. Please. >> Oh, thank you. Thank you, chair. I just uh first of all thank uh to director Pereira. I had meeting with uh Aia and uh Yugi and they helped me out quite a bit in my office. So, I want to thank say thank you for that. My question is I had a someone call me and said uh now that the city took over when Electra did it that because she was an OTSB and she's low income they would give her credits on the water bill uh because it was all together like utilities right is that do we have any um any policy on that that if you're you own a house but DSP and uh your low income that we give credits. >> Okay. Director Per the chair. Uh from my understanding the uh the rebates that the city offers are specific to low income and it's tied to the property tax rebate and if uh a resident qualifies for that by virtue they also get the rebate on the water wastewater side and that's the extent of the rebates. There may be policies outside of uh u the city be it elector or um any other corporation that may have a different policy as far as what that credit looks like. Uh but in the city it's only the rebates mentioned. >> Thank you for that. And you know, I noticed uh everyone I talked to my to the residents in my ward, first of all, they want to know why did we change and I had to explain that Electra is not doing it anymore and we're taking it on. And I think people because it's so new, uh there were a lot of questions and I think maybe that's the reason why people haven't paid yet because uh they're not sure of what they're, you know, what's going on. So uh I just want to say thank you for the department because really truly you took time uh you know uh to explain all that and they always say send the email to us. So uh I forward the emails to your department and you've done a great job. So thank you. >> Okay. Thank you councelor Pauls. I've got councelor Mark Tatison up next please. Um, sorry for the delay there. I couldn't find my mute button. Um, just to director Pereira, now that we have water billing inhouse and we have an access to understanding what properties are vacant, using that as a tool, any musings about possibly changing the vacant unit tax over to uh sort of a complaint driven or hotline kind of a method as opposed to the one where we're making everybody sign that paper. Now, >> so I have some concerns that this might not be the appropriate venue to ask that question. Uh I'm seeing some shaking of heads as to whether or not that is an order given that we're talking about utility billing. Um so I'm I'm not going >> in the in the sense that utility billing gives us another tool. Um just some musings if that's a direction that we could possibly pursue. That's all. >> I'm I'm going to recognize a point of order from councelor Clark. >> Well, one moment. >> I appreciate what the council is trying to do. The vacant unit tax is not before us and asking about them musing about it without other counselors being aware that we're going to enter in discussions about those musings. It's unfair to those other counselors. That's why we have to really stick to the agenda item. Thank you. And I'm going to hold the point of order. Councelor Tatison, recognizing uh the direction you're trying to go. Just uh you'll have to find a different venue to do it unfortunately for you. >> Thank you. >> Okay. No further questions from committee. So we have this duly moved and seconded. I'm going to ask you to register your electronic vote now, please. And that passes unanimously. 70. Thank you. Colleagues, we're moving on to 8.3, which is FCS26036. This is the 2023 city of Hamilton financial report and audited financial statements. If I could have a mover and secondary to approve the recommendations in the report and then we'll go to questioning. So moved by. Who wants to move this? Okay, I'm gonna see councelor Paul's and councelor Clark a seconder >> and then we're going to go to questions. Seeing councelor Clark first. >> Uh thank you chair. I'm surprised that there isn't a presentation attached to this financial statement given that we've been waiting this long to get it. So, I'm going to turn to the general manager. Is there a presentation? Um, perhaps councelor Clark, you're asking for a brief overview. >> A brief overview would be helpful. >> Okay. >> But I I see in the agenda there is actually no presentation provided and I think we usually get a presentation. Um, we usually hear from the auditors. Um, so are you suggesting that we only ask questions? >> So, I do believe I see the auditors in the room. So they have the ability to answer some questions but I'll turn it over for further clarification to the general manager GMC Garrick please. >> Yeah. Uh through the chair um our uh KPMG or external auditors are available to committee and able to provide a presentation today. I believe that was the intent of KPMG. Um and so Paul Capana from KPMG is available and uh I can invite Paul uh to the podium. And as Paul's making his way to the podium, maybe I'll just take a few few minutes to to acknowledge and just to to thank council and the community uh as it relates to uh your patience uh regarding the 2023 audited financial statements and uh the delay in the preparation and presentation audited financial statements are tied to our cyber incident. Um, and so I want to just recognize staff and all the hard work staff did in preparing the information for KPMG to allow KPMG to undertake uh the 2023 audit. Uh, I also want to thank uh KPMG. It was last December that KPMG was before uh AFNA and uh presented a revised audit plan for 2023 in recognition of the cyber incident and the additional effort uh that uh would be required from KPMG in regards to the incident. Um and uh as Paul's available uh and I see he's at the podium to provide the presentation, I'll just thank KPMG in advance. Uh while the 2023 audited financial statements are before committee for your uh consideration and approval, uh I want to thank staff and KPMG um in that we are only weeks away from starting our 2024 preparation of our 2024 audited financial statements. And so the intent is to do two two cycles of audited statements uh in 2026 or 2023 and 2024 uh 2024 by the fourth quarter of 2026 and then our 2025 and 2026 audited financial statements in 2027. Uh working towards a more typical cycle by 2028. Uh so thank you for that opportunity and I'll turn it over to Paul to present their findings. >> Okay. So before we go there, I'll say that it sounds like there was always an intent to have this presentation. It just perhaps was not spelled out uh within the agenda. And so we'll we'll recognize that. And perhaps if we can hold questions until after unless there's specific questions to a the presentation that we haven't yet seen. Councelor Cooper, do you have a So it's not relation to >> microphone. Oh, my apologies. >> So what I was going to ask isn't necessarily related to the uh presentation, but related to the comments I just heard. So however you like to proceed with that, I'm okay with. >> So as it relates to the comments of the general manager, uh I'd say that we'll deal with that immediately. Then you can go ahead with your question and then we'll proceed to Paul's presentation. >> Okay. Thank you. Yeah. Can we proceed with the question with the general manager as you're doing that? >> Thank you. >> Good. >> Proceed, please. Councelor Cooper. Question to the general manager. >> Thank you, Chair. So, I was under the impression that we were going to see our our 2024 audited financial statements uh at the end of say this summer. Like I thought it was going to come in around September. I think we just heard that it was going to be Q4 this year. That sounds like that might have changed. >> Question. >> Okay, general manager >> through the chair. Um while we had an earlier uh date that we were working towards for 2023 and 2024 in recognition of some additional work that city staff had to take undertake and some additional work that KPMG had to undertake is uh I believe we're aiming towards the spring of this year for 2023 and we're before you today with respect to 2023. Likewise, uh we are looking at doing some final uh work with respect to 2024. We sorry city staff in the next few weeks by July to allow KPMG to undertake their work sometime in July and August uh and deliver our audited financial statements by Q4 of this year for 2024. >> Cooper, >> so I'm not sure my question got answered. I was asking if the timeline had moved from the end of the summer till now Q4. So I'm still not sure what the answer to that question is through >> general manager. >> So through the chair I believe the earlier timeline was Q3 and now staff are uh are identifying that the additional work will take us to Q4 of 2026. >> Um thank you. And and will we see any interim financial statements like I know we're talking we're talking about concept of an audit here right but in terms of your timing but will we see an interim statement for 24 or 25 prior to September >> through the chair we've provided variance reports uh with respect to uh 2025 and uh we are looking to provide variance reports as it relates to 2026 and September uh along with the forecast for 2027. But with respect to interim financial statements, while we understand that was a previous request, uh where we are f focusing our efforts on is preparing the work in order to us for staff and KPMG to complete uh financial statements for 24, 25, and 26. >> Okay. So, we won't be seeing any interim financial statements until we see audited financial statements. if I interpreted that correctly >> through the chair. Uh yes, unless uh we identify some means of doing so without disrupting the work that we're having to do with respect to the preparation of our audited statements. >> So So just uh for the public's knowledge, what this means is we're going into an election with no 24 or 25 financial statements that's going to be publicly available to either counselors or to the public. So >> I believe that's what was stated. Yes, that's right. Thank you. >> Um Paul, how are you? >> I'm excited to be here. >> It's been a while. >> Paul and I Paul and I uh worked together previously with the HWDSB when I served on the audit committee 10 years ago. A little more than 10 years ago, actually. I had a little more hair back then. Uh but you managed to retain all of yours. Although there's a little more salt, a little more salt in the pepper. Yes. >> Uh welcome. Uh and whenever you're ready, please proceed. >> Thank you. I was I was really hoping for a bigger crowd cuz 2023 statements it's been uh it's been a mission to get here and uh kudos to city staff uh for supporting us. I think I when I came here in December it was going to be a huge lift. Um and it's been a massive lift but it's a step in the right direction in terms of now we have the groundwork for 2024 and we can move forward with 24 and 25. Um so it was a big undertaking. It was a high-risk audit engagement. um a lot of eyes on it internally at the firm um and obviously with the public. So, we're really happy to be here presenting the findings report finally. So, uh we're at the finish line. Uh statements will be going final once fully approved by council. Um we do have an audit findings report. It was included in the materials that I'll be going through today. Um typically I take it as read, but it sounds like most of you are seeing this for the first time, so I'll go through it in a bit more detail if that's okay with everyone. Um our KPMG contact. So, a little bit of a bigger team than normal just due to the the risk structure. So, we have different levels of um of specific partners and specialists involved in the audit for 2023 and will be involved for 2024. So, in terms of our audit highlights, what this does is it builds off our audit plan that we presented in December. So, the revised audit plan, um there have been no changes from that audit plan. So typically that went through the significant risk areas, the levels of materiality and our various procedures that we'll be carrying out. Uh so we didn't have any changes in terms of uh our our audit plan methodology. Here in this report we're highlighting some of the significant risks uh our findings throughout the the audit that took place. So specifically anything toggled with with a pink is areas that we're highlighting in the report. The ones that are in black mean there's no matters to report. So no changes to the audit plan. uh no going concern matters. Uh no significant unusual transactions to note or specific topics. Um but we will talk about some of the significant risks and other risks of material misstatements. Um accounting policies and practices and other financial reporting matters corrected and uncorrected misstatements. Um it was a big year in terms of uh the cyber incident for sure but also for 2023 there were two massive standards that came into play. So as the retirement obligations um along with financial instruments um which is a big undertaking for any municipality and delayed several municipal statements um from across across Canada. >> So in terms of our status so we prepared this findings report back uh beginning of June. Um so at that point in time we were required to include a laundry list of items that were still um undertaking. Um, so I'll go through some of those matters, uh, some items and let you know the status of where we're at today. Uh, so completion of the consolidated financial statement tieouts, those have all been completed. Um, no exceptions noted there. Subsequent event procedures, this happens all the way up till the 25th. So once they're approved by council, uh, so we'll have a discussion with management, uh, the in-house solicitor to identify if there's any events that could have taken place that would impact the 2023 statements, legal claims and review. Um, essentially what we do is we get uh the city solicitors update for 2023 claims and we corroborate that with going to external council and sending legal confirmations. We're in the process of confirming uh those claims at the moment. Um, typically we don't see any differences uh or any issues there. So those are all in the queue to be received um by next week. Completion of accounts receivable confirmation procedures, those have been completed. Uh no matters to no matters were identified. um remaining substantive procedures on obtaining support for expenses and revenue testing. No. Uh that was all completed and there were no matters to report there. Um our final internal quality review process here specifically it relates to there was a conversion from um the uh original template of financial statements to AODDA compliance statements. So we're just doing um a quick quality review on the AODDA piece just to make sure everything transferred over correctly. uh completion discussions with audit and finance uh committee. So that's happening today. Uh obtaining council's approval which will be on the 25th. Um and then the legal updates up until the audit report date. As I mentioned, those are all coming in uh next week. So we're in a good spot uh to get these across the finish line for the 25th. Here we're highlighting some of the significant risk areas. We spoke about it in the planning report, the various tests that we're going to carry out. So management override of controls is a required significant risk by the Canadian honity standards. We are required to carry out various procedures um to uh gain comfort over this piece here. A lot of it relies on journal entry testing, manual journal entry testing or high-risk journal entry testing. Um so we pull a sample uh based on where we think there could be uh management override of controls. Um there is no dollar amount associated with it. It's based on um where there is potential for risk. Um so we've carried out these procedures did not identify any instances of management override of controls for the 2023 year. Next is fraudulent revenue recognition. Again, this is a required significant risk under the Canadian auditing standards. Specifically, we've isolated it for government grants and development charges. That's where we um based on our planning uh expected the significant risk to take place. Um we've carried out our various substantive procedures. Uh we did identify one finding on the government grant piece. Um during our sampling we identified uh uh a grant revenue that was recognized when the corresponding expenses were not incurred. Typically when you receive a grant um it's for a specific purpose. So you can't recognize that revenue until those expenses have been incurred. Um so our uh error that we identified was $164,000 which based on our methodology were required to project and extrapolate over the population. That projection resulted in a $6.2 million projected misstatement over that balance. Um we've uh spoken with management. Typically our recommendation is to leave it uncorrected because it is a projected misstatement is not factual in nature. That being said, we did identify a control matter uh to control uh deficiency to note to management which they are in the process of remediating um in terms of ensuring that before revenue is recognized on a grant that the appropriate expenses or terms of that grant are being are being met. Implementation of the asset retirement obligation standard. So as mentioned this is a new adoption a new policy that's been adopted for 2023. What it does is significantly impacts the the balance sheet and disclosure requirements. Um it also replaces the legacy standard of uh PS3270 which is a solid waste landfill closure and postclosure liability standard. Essentially what it does is it uh requires municipalities to set up a liability um for the expected remediation costs for any legislative uh remediation that is required. So whether it's asbestous removal um um or other uh other areas landfill liabilities etc. If there's an expected remediation they have to present value and determine what that obligation is today. The city has adopted a modified retrospective adjustment approach. So what that means is instead of going back to the dawn of time and building up this liability they've gone back to the beginning of January 1st 2022 to set up that liability. So you'll see restated figures on the financial statements for 2022 and that adjustment rolling through to 2023. There's a big note, I believe it's note two of the financial statements that goes through where you can map the 2022 financial statement numbers that have been approved any of the ARRO adjustments and then how that agrees to the face of the financial statements. Uh we did not identify any adjustments regarding to the implementation of this standard. uh the city did utilize WSP as an external specialist to assist with the assumptions built into it. It is an estimate. There's a lot of complexity around it. Um and and uh was a big endeavor for the city to build but also for a from an audit perspective. operating expenses. Uh here we've identified a significant risk on um typically operating expenses, revenue, AR and AP are the the main areas due to the cyber security incident. Um here we've uh increased our level of testing as a result of that. So we did not rely on control testing. It was a purely substantive audit and was done at an elevated risk or significant risk which increased the amount of sampling that was required. um we carried out our expense testing uh and did not identify any material audit misstatements. Another new standard that was implemented was financial instruments portfolio investments. Um essentially what this requires is to reassess um any financial instruments and determine if the appropriate uh measurement uh if the measurement uh is is being recorded at an appropriate uh level. So whether it should be at an amortized cost or fair value. If the terms of that financial instrument is market uh market available then they should be recorded at fair value. We went through um management did an undertaking to identify financial instruments. We've audited their uh assessment. Uh we did not identify any any changes. Um if there were fair value matters uh those would go through a new statement a statement called remeasurement gains and losses. Um because the implementation of this new standard was not significant. there weren't any fair value uh adopted instruments. Uh that statement was not required for this year, but it doesn't mean that it cannot come into play in future years. We've included in the statements that that standards been adopted, but there was just no impact for 2023. Uh employee future benefits, uh obviously a big liability on the financial statements. Um here we involved our actuarial spe special specialist to oversee uh the city's external specialist or other actuary that they use in looking at their assumptions and calculations. We did identify one adjustment um or one uh one um uncorrected adjustment associated with the assumptions used by the third party um specialist here. Um essentially public uh PAB requires that for any unfunded um liabilities. The requirement is to use a discount rate associated with um the cost of borrowing. What was used was a m municipal yield curve. Um I don't want to get into all the technical pieces but essentially we thought a more reasonable discount rate was 3.9%. What was used was 4.2%. Um, and that difference results in a um an increase in the obligation or liability of $4.7 million to long-term debt uh sorry long-term disability and WSIB plans combined. Um again, that adjustment has not been corrected. So, it'll be sitting on the uncorrected uh schedule of misstatements. That being said, for 2024, we will be connecting with the external actuary to discuss how to remediate it so it does not stay as an uncorrected adjustment for 2024. tangible capital assets. Um here we look at additions, disposals, depreciation. Uh make sure that they're all um uh any whip items are moving into in use and being and depreciated at an appropriate rate uh and appropriate life uh expected useful life. Um very uh based on our procedures, we did not identify any audit misstatements associated with tangible capital assets, salaries and benefits. Um here we typically used to take a substantive analytical approach where we compare trends and look at last year's uh salaries and benefits compare them to current year. This year due to the the increase in risk we actually had to take a fully substantive approach. Um here we look went and looked at employee contracts make sure their rate agreed with what was actually paid out and uh and agreed it all the way through to the bank statements. So um a lot more further work uh in additional sampling associated with uh salaries and benefits. Here we did not identify any statements, accounts receivable and grants receivable. Uh here we've sent out confirmations to get thirdparty support for those balances. Um and specifically for 2023 uh reassess the allowance for doubtful accounts. Um to make sure that uh management's uh understanding or assessment of the allowance was appropriate. Uh and again based on our procedures we didn't identify any OTM statements cash and cash equivalents uh here uh fully uh fully substantive we send out confirmations to the banks we did identify one reclass adjustment here a recclass is essentially moving the numbers from one line to the another line it doesn't impact the totals at the end of the day essentially what we identified was $5 million relating to deposits held with manual life and that was to be applied against the health and dental billing ings essentially that's restricted cash not necessarily cash and cash equivalent balance. So our recommendation was to reclassify it as a prepaid or some other asset. Um this has remained uncorrected for 2020 2023. So in summary uh three uncorrected misstatements totaling 11.1 million. To put that in perspective our uh audit misstatement posting threshold is 3 million. So anything above $3 million we're required to report. Um our materiality for the audit is 60 million. So well below the materiality. So we're able to um still issue a clean opinion with those uncorrected misstatements. The three that I mentioned was the overstatement projected overstatement of grant revenue, the recclass of cash for the manual life uh advances uh and the understatement of the or the the increase in the discount rate for uh the long-term disability and WSAB uh benefit obligations. There were no corrected misstatements to note. And then we highlight the control deficiencies. Typically, whenever you have a corrected adjustment or an uncorrected adjustment, it's a result of some sort of control deficiency. So, the second one, which is your revenue of grant revenue, recognition of grant revenue, that relates to the first uncorrected misstatement that I mentioned. Um, but the other two are although they didn't result in any material adjustments or anything above our posting threshold, we thought it was good to note from a controlled efficiency. Uh so we noted in tangible capital assets there were some work in progress amounts that should have been brought into use in 2023 and they weren't. Essentially what this does is it um overstates your TCA amounts uh understates your depreciation and then operating revenue gaming casino cutoff. Um here uh we obtained a confirmation um and identified a misstatement on uh um on uh some of the balances that were uh that were noted back through that confirmation process but they weren't material in nature. Accounting policies and practices. So as noted there was the adoption of the two accounting policies. So AROR's and financial instruments. Um and then the changes to accounting policies and practice is noted and disclosed in note two of the financial statements. We've also noted uh future pronouncements. So what's coming into play in 24 and onwards uh and the potential effects on the financial statements uh based on what we can identify and what we know of the audited of the city itself um there's going to be no material impact of the adoption of those new policies or upcoming policies. Financial statement and presentation form and arrangement. Um as noted because of the cyber incident uh it was myself we had a EQCR partner so quality control partner plus uh what we call second line of defense partner all reviewing the financial statements providing feedback. Um all that feedback has been uh accepted by the city and implemented into the financial statements. So we have no disclosure comments associated with those. And in terms of the application of new accounting pronouncements, as I mentioned, we don't uh foresee any uh any uh concerns with the adoption of the new policies. Specific topics here, we identify any matters that could have come to our attention. The one I am noting obviously is the uh just the delays in the audit. So it would be I'd be remissed if I didn't include it as a result of the the time uh the timelines here. Um that being said, I think it's just a uh as a result of the cyber incident and the city taking the time to build the the data. Essentially, there was a lot of work in understanding um the completeness of the 2023 information. So essentially, are we comfortable with the opening balances? So is that 2022 ending? And are we comfortable with the 2024 beginning balances and everything in the middle? So we carried out a lot of procedures just to get comfort over that completeness piece and that everything was being incorporated in 2023. From an independence perspective, we can confirm that uh we've maintained our independence throughout the duration of the audit and we'll continue to do so um until uh until the statements are approved. And then we've included some appendices. Um so the draft auditor's report and uh and the rep letter has been given to management. Uh we included just some KPMG standard dependencies on AI adoption in the public sector, any new accounting standards um and the technology we use for our audits. I know there's a lot of information there, but uh I'll open it up to any any questions. My apologies, Paul. We were just conferring over um the remainder of the agenda. We are starting to come up against the tight timeline of 1 p.m. and want to make sure that we have the ability to get through everything. So, my apologies really hanging there for a moment. Going to turn it over now to members of the committee who have questions. Beginning with councelor Brad Clark, please. >> Um thank you very much, Chair. Just a few questions um for the auditor. So throughout since the cyber attack occurred uh we have frequently heard that council and well quite frankly council and the public have heard that staff working with the auditor was actually rebuilding the records to complete the audited financial statement um for 2023. Can you explain um in general terms how involved you were with the finding of any documentation that was lost? How did you verify any documentation? Um we get lots of questions in the public. um the public is cynical and so I'm trying to get an understanding of how indepth your role was as the independent auditor in verifying um the data. >> So from an independent auditor through the chair from an independent auditor perspective I was not involved in rebuilding the data um we were solely involved in auditing the information that was given to us by the city with an audit. we are required to look at third-party evidence. So, um from our perspective, it was up to the city to go out and obtain third-party evidence for any samples that we had requested. And I think that uh that was connected to the the timeline here. It just if the city didn't have that support internally, well, then they had to go back to vendors, they had to go back to customers in order to get that. So, for us to be able to conclude and give a clean audit opinion, we needed that third party evidence. Uh and that's what we received. >> Um thank you. And so the challenge in the broader public is the volume of information. And we're $2 billion right between capital and operating a large organization. An awful lot of money exchanges hands in a given year. And um so very clear question you as the independent auditor are you satisfied that the information that the city has provide did for this audit the rebuilding of the financial statements and our records quite frankly because it's not just the financial statements it's now our records that you are satisfied um um to the extent where possible that the materiality of the information that you were provided is accurate >> for sure and I can uh confirm that we're satisfied with the completeness of the information that was the biggest um hurdle to get over in terms of what I was capable of signing off on. So as I mentioned there were a lot of layers involved in the firm. Um so I had to involve IT specialists as well understand the the the city's mechanics on how they ensured the completeness of the data and then I audit it uh like crazy. So to put it in perspective we typically have um 1100 hours let's say on on a city audit. We're close to 4,000 hours for this for this audit. So the pure volume um of ensuring that the city's records were accurate and complete um was uh was a big lift but I can give a clean opinion associated with it. >> Thank you. And chair all of my questions I want to be clear it's not a criticize criticism of yourself or of our staff. It's just our role as as a governing body that we need to ask these questions. So in general, did you find that there was any incident where the city simply could not find their records and so what they were doing was estimating based on past expenditures um estimating based on the contracts where you know on salary you know we know that people have a certain salary and it's going to be paid out. Um did you find um that there was a significant use um of of estimates to to reconcile the budget and and the financial statement >> through the chair. There were no estimates. It was all third party support. >> Thank you very much. Much appreciated. And that does does give us a a little bit of comfort. Um the other question that I have chair is with regards to the portfolio and in the investments. Um again we've hear people ask questions that can be very cynical. They're just in this era the culture people do not trust government. Frankly they don't trust a lot of people. They're you know people have become very cynical. Um, we have really large portfolios with large investments. Um, I don't believe there's any potential risk to those investments because again they're invested with third parties. Um, I know you have to look at that. Did you find any potential loss or risk to to anything in terms of our portfolio of investments? So required from the Canadian honor standards we have to test the impairment of those portfolio instruments. Uh from there we select a sample and we actually validate it with like a Bloomberg or a Reuters to ensure that the fair value is appropriate. There were some that uh had a decrease so their market value was lower than cost. So those ones specifically we would focus on and say is there indication of impairment here? But we have the benefit of hindsight here with the 2023 audit. All those market values are now above cost. Um, so there is no risk of impairment for any of those investments as at the 2023 date. I can't speak to 24 and 25, just we haven't tested it yet. >> No. And I'm not going to question you on on those issues. Uh, the last thing um I believe you indicated that there was $11 million in um unverifiable or can you speak to that issue again? >> Just uncorrected adjustments. So any differences that we identified where uh it didn't agree to the third party res uh reporting or it didn't agree to our assessment using our experts. So the one specifically for the actuaries where we would have thought an assumption would have been different. Um essentially what that means is there's a buffer room. So that's why we have our materiality and what we call a posting threshold. So we're allowed to have a little bit of wiggle room. If anything remains uncorrected there, we can still have the conversation and uh and obviously uh we'll have that conversation whether it makes sense to correct. Um but leaving it uncorrected is is fine from issuing a clean opinion. >> And so to be clear on a go forward basis, if they're able to correct that misstatement, then they will do that as well. >> Yes. >> Okay. Thank you for I know it was a lot of work um unusual work um but It's important for us to have comfort in in the organization and and our staff and your validation really provides a lot of that. So, thank you. >> Appreciate it. >> Okay. Thank you, Councelor Clark. And I don't see any further questions for you, Paul. Congratulations. >> Congratulations to the team. I know everyone can sleep well in a in a few days and a week. So, >> there you go. Thank you so much. >> Thank you everyone for your time. >> Okay. Uh colleagues, this has been duly moved and seconded. I would make note also that we are at bare quorum. So please to the online members don't go anywhere. Um we are ready to register our electronic votes in favor or in opposition to the report we just heard. Please indicate your vote now. Councelor Tut. Oh, thank you. >> And that carries 70. Thank you, colleagues. We're moving on now to item 8.4 HS HSC26049. This is the analysis and proposed strategy for the Hamilton Fire Department overtime variances and absenteeism. If I could have a move and second her to put the report on the floor with the recommendations. Seeing councelor Tatison, seconded by councelor Paul's. Thank you. And I have uh first round questions from councelor Clark. Uh assuming that we're just going directly to questions. Looking around the room. Yes, seeing some nods. Excellent. Thank you. Councelor Clark, please please proceed. >> Thank you very much. Um just some questions to the chief. So the variance that that um we have with respect to the overtime for the current fiscal year. Do you have that figure? >> We're just looking to the bench for a response. Seeing Chief Klo if you can introduce yourself please chief. >> So uh Dave Klo fire chief through the chair to the counselor. At this time um we are looking at a variance uh based on the information I was provided yesterday about a million and a half dollars. >> And so your report is speaking to um historical variances that we have seen with respect to overtime. Um the highest of which I note is 2024. The variance was $5 million. Um, can you speak to what is causing um, all of this overtime? I know it's in the report, but I think it's important that we put it in the public record in terms of actual deliberation. Please, >> Chief Kloff. >> So, through the chair of the council, thank you for the question. Um so since 2023 uh we have started to see and this is really uh post uh pandemic uh when we started to um see that overtime variances um negative overtime variances that are not funded have started to grow. And what we have been able to recognize um through going through and doing analysis is that on average every day we have eight absences that are due to what we would deem as longterm. So WSIB claims long-term disability, uh parental leave, um and early safe return. And this trend um is not something that is just happening here in Hamilton. It's actually sectorwide. We did environmental scans as we were trying to work through this because one of the things we wanted to make sure is that this this was a consistent happening. It wasn't something that just happened and then is going to go away. And what we found uh in terms of um talking with the large urban 13 which are the the 13 largest fire services in the province, they too are having the same issue and almost consistently with the way we are relative to size and scope of each department. And what's happening is um a couple of things. One is the staffing model that we collectively had used in the fire service for decades uh was based on a ratio of 20 firefighters for every fourperson apparatus. We have 22 fourperson apparatus here in the city. When that staffing model was put in place, WSIB was not very prevalent in the fire service. LTD was not prevalent and certainly uh paternity leave was not something that was around nor was early safe return. And what's happened is over over time we know that um those things have become um prevalent and we are seeing an increase certainly in those um the fact that uh presumptive legislation we've done a very good job in terms of making sure that firefighters are aware. we make sure we get them the help. But what that means is that people are going off more frequently and for longer term as they are getting uh the treatment they need. Same thing with mental health issues. Um we are very much providing an environment that's supportive and encouraging people to uh get the treatment they need whether it's mental health or addictions and we're seeing those things increase. So what's happening is this trend is growing and what it's doing is the uh overtime the the use of overtime is just not sustainable because it's creating other challenges not just the negative variance on our budgets but what it also is doing is having impacts on our personnel in terms of firefighter fatigue uh increased risk um exposure risk as well as overtime burnout. And what that then leads to is our challenge operationally to be able to staff the four-person apparatus uh on a consistent basis without having to reduce the staffing levels on these trucks, which means we have to then dispatch additional trucks to be able to make up the number of staff we need to do the the uh appropriate actions. or we are have also found oursselfves uh on a number of occasions where we are not having the ability to get employees uh to come and take these shifts and we have had to take some trucks out of service which we cannot afford to do as I'm sure coun this committee uh is extremely aware that uh since the since the pandemic and certainly today into today um based on our annual report we're now doing over 40 45,000 uh incidents and a lot of these incidents are very labor intensive. >> Okay. Thank you for the detailed answer. Councelor Clark, I want to respect your ability to continue with your flow of questioning, but I'm also cognizant that we have a second time uh sorry, another first time speaker. Just uh trying to gauge where you may be in your line of questioning in terms of first time or second time capabilities. >> I am fine with second time. >> Okay. Thank you. Going to go now to councelor Alex Wilson, please. >> Uh thank you. I just have one quick question. I understand the recommendations in the report, completely supportive of them. I think that justification of why we're proposing to make the change makes a lot of sense. What I'm not clear on is just the timing of the change and why it's coming forward now or as part of a budget process or we just had that annual report at ECS. So, I've I've heard a couple things in the answers to the previous question. One, this is a sectorwide trend that's not Hamilton specific. So, I I've heard that and maybe that's the indicator. I also imagine as part of the next year's budget process, we're in the process of doing variance reporting right now. So this might have been the third year of a trend and so upon the third year of seeing something we started looking at it. Um I'm just wondering if the chief could comment on some of the internal review that goes on maybe on an annual basis or a semiannual basis. What is it that specifically flagged this for action that it's happening? It's coming forward kind of outside of a a different review process or outside of a budget process. Why is it this kind of being reviewed for a recommendation? Again, completely supportive of the recommendation. Just trying to understand how that's coming forward. >> Chief, so through the chair of the council, thank you for the question. In 2024, uh council identified uh overtime as a as an issue that they wanted uh folks to look into. We were one of the divisions that uh that council had directed that they wanted us to report back in terms of what was happening. uh we constantly are monitoring overtime, but this gave us the ability to come back and and we took a a very wholesome look and that's why we are where we are. We're at a point now where we cannot sustain the delivery of service without this. So to your to your question, we're here today uh asking for this because we need we need staff immediately. We can't wait. >> Counselor, >> thank you. That makes sense to me. Um I think just in the future with things like this when we're tracking something for example for a couple of years but then we say hey in year three we have the data to make the decision or we know you know that it sounds very clear that this has been on our radar. We've been aware that this is a potential decision both from the staff side and from the council side. Um I just wherever possible understanding what's the decision point to make the trigger and so how can we be more proactive in the future? How can we look ahead next time? Really appreciate that. I think we are doing that right now. We're looking at a situation we're saying we can't we can't continue the way things are. we need to change. I'm just trying to understand the difference between continuous improvement that goes on all the time. Um, and this specific flag that's happening to say, hey, we need to do something. We've been looking at this for 3 years, but now we're coming to tell you we need to change something. That's just it's the now bit that I'm just trying to understand a little bit more. Um, if there's anything beyond we just can't continue. We've been monitoring this for three years and we think now is the time to make a change. Um, just wondering if there's anything else to the answer if that if I've got what's been said already correctly. Okay, I've got the chief on for an additional response. >> So through the U chair to the counselor. Um we have been trying to manage this through the existing capacity for the last couple of years. Uh we recognize that you know our fiscal responsibility is to do that to ensure that we uh exhaust all possible resource before we come and ask. And so that's what we've been doing and we've now got to the point where we have we've had to ask. >> Thank you so much. I appreciate that being made clear. Thank you. Okay, I've got uh Councelor Brad Clark up next for a second time, please. >> Thank you, Chair. Um if we can go to page five of 15 in the report, uh it states the firefighter personnel costing 2026 to 2027 firefighters. Uh there is a a um a a chart there that indicates 22 FTEES August 1 to March 1, 2027. Then it says 22 again for March 1, December 31st and then it says April 1 to December 31st 10. I understand the report says 32 FTEEs is what is required between now and 2027. I'm assuming based on what I'm reading in this report that the August 1 to March one deals with the firefighters coming online the actual employees. So 22 FTEES starting and this is the cost as it represents that year of $1.353 million. And then the next column it's actually uh the next next line sorry it is now the annualized cost. So, it's the total cost of of the 22 FTEES. Um, either the fire chief or GM Ziggger, can can you we just explain more wholesomely what this chart represents? >> So, through the chair to the counselor. Um so the first line August u 1st 2026 to March 2027 is the immediate you're absolutely correct it's so that we can hire these folks um in in year um and that would be done through this tax stabilization account and that's the cost the March 1st to December uh 31st uh we're showing the annualized cost that's at adding it to the operational budget so operationalizing the cost of the 22 people for the balance of next year uh that we're hiring. this year a in August and then the 10 are are the are the 10 that we are also recommending to give us the 32 number to the way that uh that you put it and that's that cost for next year from April 1st to December um 31st. So if you add the cost of the 22 for next year and the 10 that's the total operationalized cost. >> Thank you. And the training of the firefighters they're they're trained on the job. Is that correct? So through the chair to the counselor, that's correct. We bring uh the individuals in, they go through an 18-week uh intensive training program. Uh if they are successful and they pass, then they are um put into uh operations. Thank you. The capital budget, you're really speaking to the equipment that is required to protect the firefighters on the job. >> So through the chair to the counselor, absolutely correct. This is uh uniforms, personal protective equipment. >> Thank you. Uh the last item in the documentation that I have, I believe it said labor relations person. Can we speak to that? And why is the labor relations person being hired in your in your department and is not um a part of the HR division? So through the through the chair of the counselor. So let me um be clear. There's two there's two different strategies in this uh report. Uh the first is dealing with the overtime variance. The second is deal and that's for the long-term absences. The second is to deal with our short-term or incidental absences. Um because we need both components uh to be able to continue to reduce uh overtime in general. And one of the things that we need to do in the short term is we need to reinstate an attendance management program. and we're looking to partner with HR uh who will help us with that uh implementation of that program. And that's this FTE is not in the fire department. It is in with HR um and in terms of HR's participation in helping us with the attendance management program. And the last question I have for the fire chief, um the fire department, uh the fire services itself, um they have not been underfunded. This is not a result of underfunding. This is a result of um the challengings that you're experiencing with overtime, dealing with long-term disability, WSIB, parental leave, etc. that's what's triggering this as opposed to any historical underfunding allegations >> through the chair of the council. You're correct. Thank you. Those are all my questions. >> Thank you folks. And seeing no further questions on this subject, it has been duly moved and seconded. And we will now require your electronic vote. >> Councelor Pauls, are you able to vote? >> And that is passed unanimous. 70. Thank you colleagues. So we are now at item 8.5. On item 8.5, we have some conflicting timelines, schedules uh that are intersecting at an inopportune time. I also recognize that the content of this report may be of interest to broader council members and it may generate some conversation at council. also recognize that we need to be out of here by 1:00 and we have uh another important in camera uh conversation point to have here. So I'm going to uh ask if there would be a consideration for referral to uh council of next week to have the full conversation of this particular item there. And I understand that uh councelor Cooper would move that and I would uh second that. And so uh what we would be doing is uh moving this to uh council, referring it to council for uh debate and consideration there in that venue as opposed to uh running out of time here. And I see councelor Clark up first on the referral motion. >> So I'm strugg struggling to understand this. So this is a governance review subcommittee minutes. Um everything's been shared with counselors. Um with the agendas um it's all available to counselors. What's the issue? So the issue is that number one, we have uh one more agenda item that I'm not confident we're going to have time to fully address. That is the in camera. The motion from councelor uh Casar I think will be handled very quickly. I am concerned about the timeline and then we have uh members of staff that are going to have to leave within the next few minutes and they will be unable to answer questions should they arise from members of this committee. So in order to uh accommodate that in a wholesome conversation and acknowledging that there could be additional questions that other counselors may have at council, my recommendation would be the referral. Um I have trouble with referring it to council. If this committee can't get their work done, then you refer it to the next committee of this committee. it. I'm worried about setting a precedence where items can be referred to council without the committee even deliberating on the item. >> Acknowledging that and um if there is a change of direction, we're happy to refer it to the next AFNA, I'll look to the mover and seeing he's agreeable, I'm agreeable to that as well, councelor Clark. So instead of moving this to council, we'll be moving this to the following AFNA committee. I'm the seconder on that and I'm looking to the screen to see if there's any questions on the referral. I have councelor Alex Wilson up next, please. >> Thank you. Apologies. I just need some procedural help here through yourself for the clerk. Is this effectively an information report or either in the closed or in the minutes just because sometimes it's difficult to find in the minutes? Is there a decision that was ratified at the subcommittee that is therefore being lifted or is this just an opportunity for maybe folks to get more information? I'm just that impacts my vote as if we're ratifying a decision or if this is just an opportunity for questions and where do we procedurally send that? >> Understood. And I'm going to turn it to uh LC Bates. And just for clarification, this would be a deferral to the following AFNA meeting. I originally had spoken this would be a referral to council. Now we're now talking about a deferral to the next available AFNA meeting. and I'll turn to LC Bates for a comment. >> Uh thank you through the chair. So uh yes, this is a governance review subcommittee minutes. Um the governance review subcommittee uh considered a uh staff report respecting the flag and sign policy and did make some recommendations. So there is something to approve changes to the protocol and um there are and you can find that uh so of course the minutes are on your on your agenda here today and then if you want to look at that report itself it's available on the governance review subcommittee agenda of June 12th. Please be mindful though that there was an amendment made at committee um uh at the governance review subcommittee. So that's in that amendment is it appears in the minutes. >> Thank you. It just appeared that we were talking about a specific item or report as opposed to the minutes gener like the topic or the concern was maybe about So it sounds like 8.1 the 50 vote is what was being talked about. That's that's great. Thank you so much. I just it sounded like there was some specificity of of an item in the minutes that was potentially sparking discussion and as just not a member of governance. I didn't know where I should be maybe trying to get up to speed or trying to look. So thank you for that. Um that's my question. >> Okay. Thank you for that. I see no further speakers. Do we all understand what we're voting on? This is a deferral to send this item to the next AFNA. I see councelor Moren Wilson, please. >> Yeah, thank you chair. I if uh I trust these discussions have been had but my recollection of the deliberation is that um there is going to be uh an opportunity for um uh to to let community know of the new process and to have the existing uh in place until the end of December prior to a transition to this new policy. I just would like to hear that confirmation from staff that this deferral uh doesn't compromise that uh timeline from their perspective. Thank you. >> Okay. I'm going to look to the bench for a response on that >> through uh the chair. Thank you for the question and I can confirm that is correct. Uh that transition date uh would take us to the end of this year December 31st. >> Okay. So no changes at this time and that doesn't change the timeline >> and you don't have if I may chair through you there's no concern in in furthering this action. Okay >> that is correct. It will have no impact and sorry my uh name is Heather Anderson. I'm the director of communications and engagement. >> Well you don't have to apologize for your name. >> Continue. Uh anything else councelor Wilson? >> No thank you. >> All right we all understand what's before us. So, we are taking an electronic vote on the deferral to the next. >> This is a hand vote. Okay, we're just a show of hands, please, for the deferral. And I believe that's unanimous. Thank you. >> And we are going to an electronic vote. >> We're going to hang on one moment. We'll set up the electronic vote. councor Mory Wilson and Tatterson. >> Thank you. >> And that carries 61. Thank you, colleagues. So, moving on now to motions, item 9.1, which would be the W 12 2026 community grants. I understand councelor Wilson is bringing this on behalf of councelor Casar. If you could introduce your motion and your seconder Thank you. It Thank you. It is moved by myself and seconded by councelor Alex Wilson. So you have a two for two here. Wilson Wilson. Um it is I'm moving this on behalf of the Ward 12 counselor um for a an extensive community grant uh dispensation. Um my understanding in speaking to the counselor that uh this meets all the requirements and conditions and has been reviewed uh by city staff and they deem it to be appropriate and in order. Thank you. or appropriate. Thank you. >> Thank you, Councelor Wilson. I'm looking around the room to see if there are any questions on this motion. And seeing none, we're going to move to the electronic vote. Please indicate your vote now. Just waiting for councelor Paul's. >> Councelor Pauls, are you able to vote? Thank you. >> It doesn't come up on my screen. And that carries by a measure of 52. Thank you colleagues. We're moving on now to private confidential which is item 11. If I could have a mover and second or to move into close session respecting item 11.2 which is pursuant to section 9.3 subsections F and K of the city's procedural bylaw 21-021 as amended and section 2392 subsections F and K of the Ontario Municipal Act 2001 as amended. As the subject matter pertains to advice that is subject to client solicitor privilege, including communications necessary for that purpose and a position, plan, procedure, criteria, or instruction to be applied to any negotiations carried on or on behalf of the city or local board. If I could have a hand vote, please to indicate your vote in support of moving in camera. >> Oh, I need a mover first. Sorry. Councelor Clark and Councelor Cooper. Mover and seconder. Thank you. All in favor? Seeing that is unanimous. Thank you folks. So members of the public, the meeting will continue in when the close session portion of the meeting has concluded. You will see members of the committee rejoin the meeting. The committee will wait up to 5 minutes upon reconvening and open session before proceeding with the meeting to provide members of the public and the media time to return. Before we move to close session, I would ask that all members of the public to please exit chambers and the WebEx meeting now. Any staff not related directly to 11.2 are asked to please exit the meeting. Now as well a remember a remember a reminder to all members of committee please ensure that you have moved to the closed session portion of escribe. Also, as per section 8.7, the procedural bylaw, use of personal electronic devices during closed session is strictly prohibited and the use of city electronic devices during closed meetings is limited to text communications only and not as a telephone recording device or camera. Staff at the office of the city clerk are exempted from the subsection 8.7 C. When using electronic devices for recordkeeping purposes, when the clerk has determined that only appropriate attendees are still in the room and in the WebEx, we will move on to 11.2. Okay, we're back in public session and we're going to begin by dealing with item 11.2FS26058 which is a commercial relationship between the city of Hamilton Centerpoint Construction Inc. If I could have a mover and seconder to approve the recommendations in the report. Please indicate your vote electronically. First I need the move and secretary seeing councelor Clark councelor M. Wilson please indicate your vote electronically now. >> Councelor Pauls. Thank you. And that carries by a measure of 70. Thank you colleagues. Being that there is no further business, the audit finance administration committee is adjourned at 12:14.