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HomeMy WebLinkAboutFIN 19-16 Report to PiCKERING Council Report Number: FIN 19-16 Date: October 17, 2016 From: Stan Karwowski Director, Finance & Treasurer Subject: Consulting and Professional Services for the Development of Financial System Specifications and RFP Proposal and Vendor Selection Recommendation: 1. That Report FIN 19-16 of the Director, Finance & Treasurer regarding Consulting and Professional Services for the Development of Financial System Specifications and RFP proposal and vendor selection be received; 2. That Council approve the hiring of Deloitte LLP for consulting and professional services in accordance with Purchasing Policy 10.03(c), as the assignment is more than $50,000.00; 3. That the fee proposal submitted by Deloitte LLP for Consulting and Professional Services for the Development of Financial System Specifications and RFP proposal and vendor selection in the amount of$110,740.00 (HST included) be accepted; 4. That the total gross project cost of$110,740.00 (HST included) and the total net project cost. of$99,725.00 (net of HST rebate) for Consulting and Professional Services for the Development of Financial System Specifications and RFP proposal and vendor selection be accepted; 5. That Council authorize the Director, Finance & Treasurer to fund the total net project cost of $99,725.00 by a transfer from the Financial Systems Reserve; and 6. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. Executive Summary: In 1997, the City purchased a new financial system, Vailtech, to address possible "Y2K" issues. The new financial system consisted of the following modules: property taxes, accounts payable, accounts receivable, general ledger and purchasing. The Vailtech financial suite cost approximately $50,000.00 and the City spent an additional $70,000.00 for implementation and training. In November of last year, Report FIN 27-15, Financial System Status Update was submitted to Council for information purposes. The report provided an update on the recent conversion of the property tax system from Vailtech to Tax Manager (TXM). Included in this report, was the Deloitte LLP (Deloitte) business case as it relates to the City's financial system which is attached for your information. FIN 19-16 October 17, 2016 Subject: Consulting and Professional Services for the Development of Page 2 Financial System Specifications and RFP Proposal and Vendor Selection The business case considered several alternatives including maintaining the status quo and various vendor strategy options. The business case recommends that the City pursue a new financial system. The new financial system will form the building block of the Enterprise Resource Planning (ERP) system. An ERP system is software that replaces many stand alone systems and manual work processes by integrating the functions into an automated system. Phase one of the project is to replace the accounts payable, accounts receivable, general ledger and purchasing systems. Phase two of the ERP system is to implement a new Human Resource system that is integrated with the financial system. Head count is tied to salaries that is linked to cost centres that makes the connection a natural "logical fit" for integration. Over the years, many municipalities have replaced their Vailtech financial systems with newer, more robust and integrated financial management solutions. The trend today is to replace these legacy systems with ERP systems. The next step in the process is to develop a Request for Proposal (RFP) for a new financial system. This step includes developing the system specifications, RFP evaluations, arranging demonstrations and recommending a vendor. The goal of the new financial system is to accommodate the City's future growth due to Seaton and downtown intensification. In addition, replacing the current system will result in efficiencies that will reduce the time and effort spent on financial administrative processing, ensuring more resources can be dedicated to core business activities and service delivery. Deloitte has been the City's auditor since January 15, 2002. They provide a variety of auditing, accounting and advisory services to a number of municipalities including six of eight local municipalities and the Region of Durham. They are familiar with the City's current business and have a vast experience in the municipal sector to help ensure that the City's new financial system is capable of meeting the City's financial information needs for the next twenty to thirty years. In accordance with Purchasing Policy 10.03(c) where the project or annual cost of a consulting or professional service assignment is expected to be more than $50,000.00 and the initiating Director intends to acquire the services without obtaining written proposals, the Director shall submit a Report to Council to obtain approval to engage the services of a particular consultant. Staff are recommending Council approval of the fee proposal submitted by Deloitte for Consulting and Professional Services for the Development of Financial System Specifications and RFP Proposal and vendor selection in the amount $99,725.00 (net of HST rebate). FIN 19-16 October 17, 2016 Subject: Consulting and Professional Services for the Development of Page 3 Financial System Specifications and RFP Proposal and Vendor Selection Financial Implications: 1. Project Costing Summary Fee Proposal $98,000.00 HST (13%) 12,740.00 Total Gross Project Cost $110,740.00 HST Rebate (11.24%) (11,015.00) Total Net Project Cost $99.725.00 • 2. Approved Source of Funds 2016 Current Budget—Finance Approved Code Source of Funds Budget Required 2127.2392.0000 Financial Systems Reserve $100.000.00 $99,725.00 Project Cost under (over) approved funds by $275.00 Discussion: The City of Pickering has an annual operating and capital budget that exceeds $122.0 million. Ensuring that the organization's finances and assets are managed in accordance with the requirements of the regulatory and statutory requirements requires a robust and secure enterprise-wide solution. In addition, the underlying financial processes must be efficient and effective, providing key financial information and indicators of performance to inform decision making by senior management, departments and Council. Last year, Deloitte undertook an analysis of the City's current financial system. The document is attached to this report. The Deloitte study reviewed the current accounting system and provides several options for the City to consider. The authors reviewed the "Status Quo" option and are recommending that this option not be pursued. The key issues and/or challenges with the current system are: • • The City has 24 separate business applications processing financial information and these systems are not fully integrated, resulting in lost opportunities in efficiency and decision making. • Processes are manual and require significant staff effort leading to increased cost and financial risk. • Current system reports provide limited information and do not provide flexible reporting capability for operational and management decision making. FIN 19-16 October 17, 2016 Subject: Consulting and Professional Services for the Development of Page 4 Financial System Specifications and RFP Proposal and Vendor Selection • Current financial controls are manually intensive and rely on the experience and reliability of key finance staff. Phase 1 is to replace the core accounting systems: Accounts Payable, Accounts Receivable, General Ledger and Purchasing. Page 10 of Attachment 1 is a diagram of the current system and shows the relationship among the various other systems and how they are connected directly or indirectly to the City's financial core. Consulting Project Description Deloitte has proposed that the project work begin around the third week of October. The plan is to meet with key staff who work with various systems to obtain their vision for future systems and to discuss technology options. This phase of the project is expected to be completed by mid December. During this time, the consultant will also be writing the system specifications for the new financial system. In May 2017, the "RFP" will be issued with an expected closing date of mid June. The next step will be to evaluate the various proposals and to conduct financial system demonstrations from the short listed vendors. Deloitte will help develop the evaluation criteria and provide assistance and guidance regarding the selection of the final vendor. During the vendor selection/evaluation stage, the City will entertain the use of a cloud based financial system. Any system selected will have to be evaluated and measured against all possible solutions including a "cloud based" system. Attachments: 1. City of Pickering Financial System Review & Business Case 2. Deloitte Proposal Letter dated September 22, 2016 Prepared/Endorsed By: Stan Karwowski, MBA, CPA, CMA - Director, Finance & Treasurer Recommended for the consideration of Pickering City Council / / Od: 4, 2016 Tony Prevedel, P.Eng. Chief Administrative Officer ATTACHMENT#, 1 TO REPORT#f2N /9—Ito' sew "'+w - nc-. te n .� %�- `,ti ��� s.�" zF._' 44-•:.:y - e yiyyr�- G - 1 o 't+r .. ' fc .M----". ,-`^ r-.�.•�- S 'i.- ; fix --�: .° s i j f`. .k.... .g..- a�_� 'F s` N°,,. ". - - -ter.._ - -' u '�_-----" M `. __, - ', a-- - = - .-- 7-,- -- - _ *-44.:"'"--- 4 G - ' - 6 t" r ._z •nom•. �.+�- .^Q `s 21 V Lr —.=_-_----,- ... \ �- a - _ - s _ ',• _ _ rem' ate _ . '�" • sue . r- -� � "• .v �� • L :— r� s., �- -va - } ." � •- i� a ■i 5_. 0...) a) (3.) Et c.f) cz c:3) c E 0 ,.._• i— or) a •V C■ �' o viar 000E L--- N O C ^L^'' W In MI.M11 C CL 0 0 �L CZ a r *� Fr n t i ry�a��*31 '�''�, !Y , y .� Ert yt � 4.r y x r t ,•r ,"•'. 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Deloitte LLP Bay Adelaide East 22 Adelaide Street West Suite 200 Toronto ON,M5H 0A9 Canada September 22, 2016 Tel:416-601-6150 Fax:416-601-6151 Mr. Stan Karwowski www.deloitte.ca Division Head,Finance&Treasurer City of Pickering One The Esplanade Pickering, ON L 1 V 6K7 Dear Mr.Karwowski: Re: ERP Selection Advisory This letter confirms the proposed engagement of Deloitte LLP("Deloitte"or"we"or"us")by City of Pickering("Pickering"or the"City")to advise the City in their Enterprise Resource Planning(ERP) selection. Deloitte will perform this engagement subject to the terms and conditions set forth herein and in the accompanying Appendix A. Scope of services City of Picking has requested Deloitte to advise with the ERP selection process starting with gaining an understanding of the current business processes and systems to the development of their Request for Proposal(RFP)specification package of their ERP package. Deloitte will perform the agreed-upon services under the direction of City management to assist management with respect to identifying the requirements for an ERP solution, including the following activities and deliverables(collectively,the"Services"): Phase 1: Current State Assessment Deloitte will perform the following agreed-upon services under the direction of management to identify the requirements for a new ERP system: • Workshops with Pickering to review: . o Current state — Current business processes including Budgeting and Forecasting,Purchasing and Accounts Payable,Revenue and Accounts Receivable,Management Reporting,Finance, Payroll,Capital Assets,HR — Current systems landscape — Challenges in current systems and processes o Future state — Vision for future state systems landscape and functional scope — Develop list of requirements for future state — Discuss potential technology options o Organizational technology standards and requirements • Document workshop findings • Workshop to review deliverable and finalize the requirements • Attend discovery calls from vendors,with management, as a technical advisor • Advise management on preparing specifications for the RFP September 22,2016. Page 2 Deliverables include: • Summary of the workshops(processes maps, IT map, findings and requirements) • Selection approach and next steps • • RFP specifications Phase 2-3: RFP Development,Demonstrations and Evaluation • Advise the City as they liaise with vendors and provide clarifications and responses during the RFP bidding period • Advice and perspectives on management's drafted evaluation framework(Deloitte can provide a generic template upon which City of Pickering can draft its framework) • Participate on the evaluation committee to read vendor submissions sent to City of Pickering • Advice and perspectives on management's drafted demo evaluation scorecard(Deloitte can provide a generic template upon which City of Pickering can draft its scorecard) • Attend,with management, initial demos with 3-4 vendors • Advice and perspectives on management's drafted detailed demo scenarios and expectations document • Attend detailed demonstrations with 2-3 vendors with management as a technical advisor • Advise management as they debrief discussions and make their selection • Attend proposal presentations from vendors,with management, as a technical advisor • Advise management as they make their final selection Deliverables include: • RFP evaluation scorecard template • Initial demo evaluation scorecard template • Detailed demo scenarios and expectations template • Detailed demo evaluation scorecard template Phase 4: Contracting • Support the drafting of further clarifications and attend reference calls • Advise management as they review the services and software agreements from vendor,as well as the statement of work • Provide final considerations and next steps related to preparation for the implementation Advisory work relating to subsequent phases(e.g. implementation quality oversight, etc.)are to be addressed as a separate engagement. The work product of this engagement will consist of providing verbal and written comments as well as observations, insights and perspectives. In some cases, such documents may be initially drafted by Deloitte personnel for City of Pickering management's consideration. In all cases, management will be responsible to review and make ultimate decisions with respect to approval,modification, acceptance and use of such documents. Timing of the Services Pursuant to conducting all related workshops and demos according to the suggested timeline and milestones in the project plan,we expect to start this engagement in October 2016 and conclude Phase 1 of the engagement by end of November 2016. September 22,2016 Page 3 Phases 2, 3 and 4 of the engagement pertaining to the RFP,Demonstrations,Evaluation and Vendor Selection as well as Contracting work are scheduled to commence in May 2017 and conclude by end of July 2017 This timeline has assumed that for the months of December 2016 through to April 2017 no further work related to this engagement will be performed. This timeline also assumes that the RFP will be issued to the vendors during the first week of May 2017. A detailed wdrkplan can be found in Appendix B. Acknowledgments and agreements The City specifically acknowledges and agrees to the following: 1. The performance of the Services does not constitute an engagement to provide audit,compilation, review or attest services in accordance with professional standards issued by the Chartered Professional Accountants of Canada("CPA Canada")and,therefore, Deloitte will not express an opinion or any other form of assurance with respect to any matters(including,without limitation, compliance with Public Sector Accounting Standards). 2. This engagement cannot be relied on to disclose internal control deficiencies, errors, or fraud should they exist. Deloitte has no responsibility for updating the Services performed or for performing any additional services, except as agreed to in writing with the City. 3. Management's purpose for engaging Deloitte to perform the Services is to assist management's own resources in selecting an ERP software and not to obtain an opinion from Deloitte. 4. The City shall be solely responsible for, among other things: (a)making all management decisions and performing all management functions; (b)designating one or more individuals who possess suitable skill, knowledge,and/or experience, preferably within senior management to oversee the Services;(c)evaluating the adequacy and results of the Services; (d)accepting responsibility for the results of the Services; and(e)establishing and maintaining internal controls, including,without limitation, monitoring ongoing activities.Deloitte will not perform any management functions,make any management decisions or implement any solutions or processes. 5. All management decisions and final conclusions reached in connection with this engagement will be the responsibility of the City. Deloitte will not make any decisions or assessments. 6. The City will be solely responsible for all decisions regarding the accounting treatment of any item or transaction and acknowledges that the Services do not include the recording of any amounts in the City's books or records. All amounts derived from the performance of the Services will be reviewed and approved by, and will be the responsibility of,the City's management. 7. The nature, scope, and design of the Services are solely the responsibility of the City. Deloitte will rely,without independent verification on the facts, information and assumptions provided by the City. 8. Deloitte can act as a project manager over Deloitte personnel; however,Deloitte cannot coordinate or oversee the work of City or vendor resources. Deloitte can maintain a draft status scorecard of progress made towards achieving management's action steps and reporting on such to management. Management retains overall responsibility for the plan,management of City employees and reporting to other City executives and/or the board of directors. 9. Deloitte may be involved in City led meetings and Committees. Deloitte may participate and provide insights/advice based on best practices or process in these sessions as a technical advisor, but Deloitte will not lead these sessions. 10. Deloitte cannot provide any forecasts,projections or budgets which could be used by the City for financial statement or budgeting purposes. This includes any cost assessments for various design models or builds. 11. Deloitte will not be designing or implementing the hardware or software system that aggregates source data underlying the financial statements or generates information that is significant to the financial statements or other financial information systems taken as a whole. 12. All communications with vendors are forwarded to the City of Pickering management September 22,2016 Page 4 13. Deloitte will not negotiate with, or commit City of Pickering to any commitment or contract Engagement team For this engagement we have assembled a team of highly skilled senior individuals who bring unique experience managing technology assessments, as well as finance function transformations from planning through to implementation. Mike Goodfellow will be the Lead Engagement Partner,and has overall responsibility for all aspects of this engagement. Mike will ensure that your expectations for our performance are both understood and exceeded. In this role,Mike is supported by a team that is responsible for the oversight and execution of our advisory services Vanessa Medeiros Coqueiro, Senior Manager,Assurance&Advisory will serve as the engagement manager and have responsibility for the execution of this engagement. Brandon Braganza,Manager, Assurance&Advisory will assist in delivering the project,and Matthew Colley, Senior Manager, Assurance&Advisory will serve as a Subject Matter Expert. This engagement team may, as necessary,call upon additional personnel either within Deloitte or a member firm of Deloitte Touche Tohmatsu Limited to assist in performance of the Services. Fees The upset limit for this engagement is: Fee for services: $90,000 Disbursements(including travel,photocopying, gas,hotels, etc): $8,000 Total Cost: $98,000 HST: $12,740 Total: $110,740 The fees quoted for the Services are based on certain assumptions and our understanding of the engagement scope as outlined in this letter. Disbursements, such as but not limited to: travel,photocopying, gas,hotels, etc will be billed separately and during the execution of the Work. Other matters This engagement letter, including the appendices attached hereto and made a part hereof, constitutes the entire agreement between the City and Deloitte with respect to this engagement and supersedes all other prior and contemporaneous representations,understandings,or agreements between the parties,whether written or oral,relating to this engagement and may not be amended except by mutual written agreement of the City and Deloitte. If the above terms are acceptable to you and the Services described are in accordance with your understanding,please sign the copy of this engagement letter in the space provided and return it to us. We recognize the importance of this initiative and appreciate the opportunity to assist you in this assignment. If you have any questions or comments regarding our proposal,please contact me at mgoodfellowadeloitte.ca or at 416-643-8027. September 22,2016 Page 5 Yours truly, Mike Goodfellow Partner The services and terms set forth in this contract are accepted and agreed to by City of Pickering management: Signature Name Title Date September 22,2016 Page 6 Appendix A General business terms City of Pickering 1. Contract and parties. a. The engagement letter and attached schedules,appendices and attachments(the"Engagement Letter") issued by Deloitte LLP("Deloitte")and addressed to the entity specified in the Engagement Letter(the"City"), and these General Business Terms(together,the"Contract") constitute the whole agreement between the City and Deloitte in relation to the services, deliverables and work product described in the Engagement Letter(the"Services").For the purposes of this Contract,the"City" shall include such City's subsidiaries and affiliates as specifically identified in the Engagement Letter or, if none are identified, all the City's subsidiaries and affiliates(together with the City,the"City Group"). The City represents and warrants that it has the power and authority to execute this Contract on behalf of,and to bind, itself and its subsidiaries and/or affiliates identified in the Engagement Letter or if none identified those forming part of the City Group. b. This Contract is between the City and Deloitte. The City hereby agrees that Deloitte may use the services of any Deloitte Touche Tohmatsu Limited member firm and its respective subsidiaries and affiliates(including those operating outside of Canada)or,with the consent of the City,the services of any other party(collectively,"Subcontractor").The City's relationship is solely with Deloitte as the entity contracting to provide the Services.Each party is an independent contractor and neither party is,nor shall be considered to be,the other's agent,distributor,business partner, fiduciary,joint venturer, co-owner, or representative. Deloitte remains responsible to the City for all of the Services under this Contract, including Services performed by Subcontractors. Accordingly,to the fullest extent possible under applicable law,none of the Deloitte Entities(as defined below)(except Deloitte)will have any liability to the City and the City will not bring, and will ensure that no other member of the City Group brings, any claim or proceedings of any nature (whether in contract,tort,breach of statutory duty or otherwise and including, but not limited to, a claim for negligence) in any way in respect of or in connection with this Contract against any of the Deloitte Entities(except Deloitte). c. "Deloitte Entities"means Deloitte Touche Tohmatsu Limited("DTTL"), a UK private City limited by guarantee, its member firms and their respective subsidiaries and affiliates(including Deloitte),their predecessors, successors and assignees, and all partners,principals,members, owners,directors, employees, subcontractors and agents of all such entities.Neither DTTL nor, except as expressly agreed herein, any of its member firms has any liability for each other's acts or omissions. Each of the member firms of DTTL is a separate and independent legal entity operating under the names"Deloitte","Deloitte&Touche","Deloitte Touche Tohmatsu"or other related names; and services are provided by member firms or their subsidiaries or affiliates and not by DTTL. 2. Responsibilities of the Client.The City shall cooperate with Deloitte in the performance by Deloitte of the Services,including,without limitation,providing Deloitte with reasonable facilities and timely access to data, information and personnel of the City. The City shall be responsible for the performance of its personnel and agents, for the timeliness, accuracy and completeness of all data and information(including all financial information and statements)provided to Deloitte by or on behalf of the City.Deloitte may use and rely on information and data furnished by the City or others without verification. Deloitte's performance shall be dependent upon the timely performance of the City's responsibilities hereunder and timely decisions and approvals of the City in connection with the Services. Deloitte shall be entitled to rely on all decisions and approvals of the City. 3. Payment of invoices.Deloitte's invoices are due and payable by the City within 30 days of receipt by the City. Without limiting its rights or remedies,Deloitte shall have the right to suspend or terminate the Services entirely or in part if payment is not received within sixty(60)days of the invoice date. September 22,2016 Page 7 The City shall be responsible for all taxes, such as federal, provincial or other goods and services or sales taxes, gross receipts tax,withholding tax, and any similar tax, imposed on or in connection with the Services, other than Deloitte's income and property taxes. Expenses will be stated separately on the invoices. To the extent that Deloitte personnel are required to perform part of the Services in the United States of America("U.S. Business"),the City and Deloitte agree to assign performance of the U.S. Business to Deloitte Canada LLP, an affiliate of Deloitte. All services performed by Deloitte Canada LLP shall be performed under the direction of Deloitte which shall remain responsible to the City for such Services. 4. Term.Unless terminated sooner in accordance with its terms,this Contract shall terminate once the Services have been performed. This Contract may be terminated by either party at any time, with or without cause,by giving written notice to the other party not less than thirty(30)calendar days before the effective date of termination,provided that in the event of a termination for cause,the breaching party shall have the right to cure the breach within the notice period. In the event of termination,the City agrees to compensate Deloitte under the terms of the Engagement Letter for Services performed and expenses incurred through the effective date of termination. Deloitte may terminate this engagement with immediate effect upon written notice to the City if Deloitte determines that(i)a governmental, regulatory or professional entity(including,without limitation,provincial accounting institutes, Canadian and foreign securities commissions,the Canadian Public Accountability Board and the Public City Accounting Oversight Board(United States))or an entity having the force of law has introduced a new, or modified an existing, law,rule, regulation, interpretation or decision the result of which would render the performance by Deloitte of any part of the Contract illegal or otherwise unlawful or in conflict with independence or professional rules,or(ii)circumstances change(including,without limitation,changes in ownership of the City or any of its subsidiaries or affiliates) such that the performance by Deloitte of any part of the Contract would be illegal or otherwise unlawful or in conflict with independence or professional rules. 5. Confidentiality. a. To the extent that, in connection with this Contract, Deloitte comes into possession of information relating to the City which is either designated by the disclosing party as confidential or is by its nature clearly confidential(the"Confidential Information"), Deloitte shall not disclose such Confidential Information(including Personal Information as defined below)to any third party without the City's consent, except as follows. The City hereby consents to Deloitte disclosing such Confidential Information(a)to legal advisors,external and internal auditors, insurers, other Deloitte Entities or as may be required or permitted by law, regulation,judicial or administrative process, or in accordance with applicable professional standards, or in connection with potential litigation; (b)to a Subcontractor,and the City acknowledges that,by such consent, the Confidential Information disclosed may be subject to the domestic and international laws applicable to the Subcontractor; or(c)to the extent such Confidential Information(i) shall have otherwise become publicly available(including,without limitation, any information filed with any governmental agency and available to the public)other than as the result of a disclosure by Deloitte in breach hereof,(ii)becomes available to Deloitte on a non-confidential basis from a source other than the City which Deloitte believes is not prohibited from disclosing such information to Deloitte by obligation to the City, (iii)is known by Deloitte prior to its receipt from the City without any obligation of confidentiality with respect thereto, or(iv)is developed by Deloitte independently of any disclosures made by the City to Deloitte of such information. b. All Services are only intended for the benefit of the City for its internal use and City agrees that such Services and any work product prepared by Deloitte and delivered to the City will not be circulated, quoted,disclosed or referenced to any other third party except as provided above or in the Engagement Letter. The mere receipt of any work product or advice by any other persons is not intended to create any duty of care,professional relationship or any present or future liability between those persons and Deloitte. As a consequence, if copies of any work product or other advice(or any information derived therefrom)are provided to others under the above exclusions, it is on the basis that Deloitte owes no duty of care or liability to them, or any other persons who subsequently receive the information. September 22,2016 Page 8 c. In addition,the City acknowledges and agrees that to the extent a Deloitte Entity is the independent auditor of any entity in the City Group, any information that comes to the attention of Deloitte in the course of performing this Contract may be considered and used by the Deloitte Entity independent auditor in the context of responding to its professional obligations as the independent auditor for the City. d. The City agrees to reimburse any costs any Deloitte Entity or any Subcontractor may incur in complying with any legal,professional or regulatory disclosure requirement relating to any of the Services imposed in any proceedings or regulatory process not involving any substantive claim or proceeding against any such Deloitte Entity or Subcontractor, provided the City is notified promptly and,where reasonably or legally possible, prior to disclosure. e. Deloitte acknowledges that any submissions and information exchanged shall become a record belonging to the City and therefore is subject to the Municipal Freedom of Information and Protection of Privacy Act. This provincial law gives individuals, businesses and other organizations a legal right to request records held by the City, subject to specific limitations. Deloitte should be aware that it is possible that any records provided to the City, including but not limited to,pricing,technical specifications, drawings, plans, audio-visual materials or information about staff,parties to the bid or suppliers could be requested under this law. Records relating to the contract could possibly be released under MFIPPA. If Deloitte believes that all or part of the quote should be protected from release,the relevant parts should be clearly marked as confidential. Please note that this will not automatically protect the submission from release, but it will assist the City in making a determination on release if a request is made. The identity of all companies, as well as total prices,may be available to the public subject to the City's Purchasing Policy. 6. Limitation on warranties.This is a services engagement. Deloitte warrants that it shall perform the Services in good faith and with due professional care. Deloitte disclaims all other warranties, either express or implied, including,without limitation,warranties of merchantability and/or fitness of the Services for a particular purpose. 7. Limitation on damages. Deloitte, any other Deloitte Entity and their respective personnel, if and only to the extent it is determined such other Deloitte Entity and its respective personnel have a liability, shall not be liable to the City Group for any claims, liabilities, losses,damages, costs or expenses relating to this Contract,the Services and the Deliverables (as deemed below)("Claims")for an aggregate amount in excess of the fees paid by the City to Deloitte, except to the extent finally judicially determined to have resulted primarily from the bad faith or intentional misconduct of Deloitte, or any other Deloitte Entity or their respective personnel. In no event shall any Deloitte Entity(including Deloitte)or its respective personnel be liable for any loss of use,data, goodwill, revenues or profits or failure to realize expected savings(whether or not deemed to constitute direct Claims)or any consequential, special, indirect, incidental,punitive or exemplary loss, damage, or expense relating to this Contract,the Services and the Deliverables. In circumstances where all or any portion of the provisions of this section are finally judicially determined to be unavailable,the aggregate liability of Deloitte, any other Deloitte Entity, any Subcontractor and their respective personnel for any Claim shall not exceed an amount which is proportional to the relative fault that their conduct bears to all other conduct giving rise to such Claim. The provisions of this section shall apply regardless of the form of action,damage, claim, liability, cost, expense,whether in contract (including fundamental breach), statute,tort(including negligence)or otherwise. If the liability exclusion for Deloitte Entities and Subcontractors provided in section 1(b) is for any reason not effective,then the limitations on liability provided for in this section 7 shall apply to Deloitte Entities and Subcontractors as if they were named therein. 8. Indemnification. The City shall indemnify and hold harmless Deloitte, any other Deloitte Entity and their respective personnel from all third party Claims related to the Services, except to the extent finally judicially determined to have resulted primarily from the bad faith or intentional misconduct of Deloitte, any other Deloitte Entity or any of their respective personnel. In circumstances where all or any portion of the provisions of this paragraph are finally judicially determined to be unavailable,the aggregate liability of Deloitte, other Deloitte Entities and their respective personnel for any third party September 22,2016 Page 9 Claim shall not exceed an amount which is proportional to the relative fault that their conduct bears to all other conduct giving rise to such Claim. The provisions of this section shall apply regardless of the form of action, damage, claim, liability, cost, expense,whether in contract(including fundamental breach), statute,tort(including negligence)or otherwise. 9. Limitation on actions.No action,regardless of form,relating to this Contract or the Services, may be brought by either party more than two years(or the applicable period under any mandatory statutory limitation period in the relevant jurisdiction)after the cause of action has accrued under applicable law 10. Ownership of work product and work papers. a. To the extent that Deloitte utilizes or develops any of its property(whether tangible or intangible) in connection with this Contract, such property, including work papers, shall become the property of the City. Any intellectual property and proprietary rights in the material provided by City Group for performing the Services shall remain the property of the City Group. City acknowledges that Deloitte, in connection with performing the Services,may develop or acquire general experience, skills,knowledge, and ideas that are retained in the memory of its personnel. The City acknowledges and agrees that Deloitte may use and disclose such experiences, skills, knowledge. b. All working papers,files and other internal materials created or produced by Deloitte related to this engagement that are not Deliverables are the exclusive property of Deloitte. 11. Force majeure.Neither party shall be liable for any delays or nonperformance resulting from circumstances or causes beyond its reasonable control, including,without limitation, acts or omissions or the failure to cooperate by the other party(including,without limitation, entities or individuals under its control, or any of their respective officers, directors,employees, other personnel and agents), acts or omissions or the failure to cooperate by any third party, fire or other casualty,act of God, epidemic, strike or labour dispute,war or other violence, or any law, order, or requirement of any governmental agency or authority. 12.Non-solicitation.Deloitte and the City each agree not to directly or indirectly solicit, employ or engage,any personnel of the other party involved in this engagement for a period of six(6)months following any such personnel's involvement with the provision of the Services or otherwise directly connected with this Contract, except where an individual responds directly to a general recruitment campaign. 13. Communications. a. Except as instructed otherwise in writing, each party may assume that the other approves of properly addressed fax,email(including email exchanged via internet media)and voicemail communication of both sensitive and non-sensitive documents and other communications concerning this Contract, as well as other means of communication used or accepted by the other. b. It is recognized that the internet is inherently insecure and that data can become corrupted, communications are not always delivered promptly(or at all)and that other methods of communication may be appropriate. Electronic communications are also prone to contamination by viruses. Each party will be responsible for protecting its own systems and interests and will not be responsible to the other on any basis(contract,tort or otherwise)for any loss, damage or omission in any way arising from the use of the internet or from access by Deloitte personnel to networks, applications, electronic data or other systems of the City Group. 14.Privacy.Deloitte and the City acknowledge and agree that, during the course of this engagement, Deloitte may collect personal information about identifiable individuals("Personal Information"), either from the City or from third parties. Deloitte's services are provided on the basis that the City has.obtained any required consents for collection, use and disclosure to us of Personal Information required under applicable privacy legislation. The City and Deloitte agree that Deloitte will collect, use and disclose Personal Information on behalf of the City solely for purposes related to completing this engagement, related engagements, or providing services to the City and Deloitte shall not collect, use and disclose such Personal Information for Deloitte's own behalf or for its own purposes. September 22,2016 Page 10 15.Anti-money laundering.Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act(Canada),Deloitte and its personnel are required to report any(a)attempted or completed suspicious transactions(transactions which are reasonably suspected to be related to the commission of a money laundering or terrorist financing offence),(b)terrorist property that comes into the possession of Deloitte, and(c) large cash transactions(receipt by Deloitte of over$10,000 Canadian or equivalent in cash)to the Financial Transactions and Reports Analysis Centre of Canada, a government agency. The Act specifically prohibits Deloitte from informing a client that a report has been made. 16. Entire agreement,modification and effectiveness.Nothing discussed prior to execution of the Engagement Letter induced, nor forms part of,the Contract unless as specifically set out in this Contract. This Contract supersedes any previous agreement, understanding or communication,written or oral,relating to its subject matter.No variation to the Contract shall be effective unless it is documented in writing and signed by authorized representatives of both parties, provided, however, that the scope of Services set forth in the Engagement Letter may be changed by agreement of the parties in writing, including by e-mail or facsimile. If Deloitte has already started work(e.g. by gathering information,project planning or giving initial advice)then the City agrees that this Contract is effective as of the start of such work. 17. Assignment.Except as provided in paragraph 1, no party may assign,transfer, or delegate any of its rights or obligations relating to this Contract without prior written consent of any other party.Neither party will directly or indirectly agree to assign or transfer to a third party any claim against the other party arising out of this Contract. 18. Governing law and submission to jurisdiction. This Contract, including exhibits and all matters relating to it shall be governed by, and construed in accordance with,the laws of the province of Ontario Any action or proceeding arising out of or relating to this Contract or the Services shall be brought and maintained exclusively in the courts of the province of Ontario. The parties hereby expressly and irrevocably(i) submit to the exclusive jurisdiction of such courts for the purposes of any such action or proceeding and(ii)waive,to the fullest extent permitted by law,any defense of inconvenient forum to the venue and maintenance of such action in any such courts. 19. Survival and interpretation. a. Any provisions of the Contract which either expressly or by their nature extend beyond the expiration or termination of this Contract shall survive such expiration or termination, including, without limitation, sections 1(b), 5, 6, 7, 8, 9, 10, 12, 16, 17, 18, 19 and 20. b. Deloitte Entities are intended third party beneficiaries of this Contract and any Deloitte Entity may in its own right enforce such terms. c. If any provision of this Contract is found by a court of competent jurisdiction to be unenforceable, such provision shall not affect the other provisions, but such unenforceable provision shall be deemed modified to the extent necessary to render it enforceable,preserving to the fullest extent permissible the intent of the parties set forth herein. 20. Qualifications.Notwithstanding anything herein to the contrary, Deloitte may use,with prior written approval from the City,the name of the City, refer to this engagement and the performance of the services in marketing,publicity materials and other material, as an indication of its experience, and in internal data systems.