1 2 3 4 TORONTO COMPUTER LEASING INQUIRY 5 6 7 8 ******************** 9 10 11 BEFORE: THE HONOURABLE MADAM JUSTICE DENISE BELLAMY, 12 COMMISSIONER 13 14 15 16 17 Held at: East York Civic Centre 18 850 Coxwell Avenue 19 Toronto, Ontario 20 M4C 5R1 21 22 ******************** 23 24 25 March 26th, 2003

2
  1                        APPEARANCES
  2  
  3  Ronald Manes   (np)     )Commission Counsel 
  4  Patrick Moore           )
  5  Daina Groskaufmanis (np)) 
  6  Linda Rothstein  (np)   )City of Toronto 
  7  Lily Harmer    (np)     )
  8  Robert Centa    (np)    )
  9  Gordon Capern           )
 10  David Moore             )MFP 
 11  Fraser Berrill          ) 
 12  Ken Jones      (np)     ) 
 13  Brian Heller   (np)     )Ball Hsu and Associates Ltd.
 14  Melissa Kronick (np)    )CUPE 
 15  Raj Anand      (np)     )Lana Viinamae
 16  Bay Ryley               )
 17  William Anderson        )Wanda Liczyk
 18  Valerie Dyer   (np)     )Dell Computers
 19  Jennifer Lynch (np)     )
 20  Edward Greenspan (np)   )Jeff Lyons
 21  Todd White (np)         )
 22  Hugh MacKenzie          )Jim Andrew
 23  Bryan McPhadden         )Brendan Power
 24  
 25  Joyce Ihamaki           )Registrar

1 TABLE OF CONTENTS 2 Page 3 4 Exhibits 4 5 6 BRENDAN POWER, Resumed 7 Continued Cross-Examination 8 by Mr. Fraser Berrill 8 9 Cross-Examination by Ms. Bay Ryley 101 10 Cross-Examination by Mr. Gordon Capern 217 11 12 Certificate of Transcript 275 13 14 15 16 17 18 19 20 21 22 23 24 25

1 2 EXHIBITS 3 Exhibit No. Description Page No. 4 5 23 VOLUME III Bound document titled 101 6 "Brendan Power" 7 Additional Tabs 57 - 74 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 --- Upon commencing at 10:00 a.m. 2 3 THE REGISTRAR: The Inquiry is now in session. 4 Please be seated. 5 MR. BRYAN McPHADDEN: Madam Commissioner -- 6 MADAM COMMISSIONER: Yes? 7 MR. BRYAN McPHADDEN: -- before we get 8 started -- 9 MADAM COMMISSIONER: Yes, Mr. McPhadden? 10 MR. BRYAN McPHADDEN: Mr. Power has a long 11 planned vacation that he was scheduled to start next week. 12 And I added up the time estimates from counsel 13 who have questions for him, such that we'd be in jeopardy of 14 not finishing with him tomorrow. 15 And I'm wondering if the Commission would 16 entertain either staying late today and/or starting early 17 tomorrow. 18 And another alternative that's been offered is 19 perhaps sitting sometime on Friday. 20 MADAM COMMISSIONER: Okay. Well let's -- how 21 long do you think you're going to be, Mr. Berrill? 22 MR. FRASER BERRILL: I'm going to be -- I'm 23 going to try my very best to be finished by noon. 24 MADAM COMMISSIONER: Okay. 25 And who do we have after that?

1 MR. GORDON CAPERN: Ms. Ryley. 2 MADAM COMMISSIONER: Ms. Ryley is after that. 3 Ms. Ryley, how long do you anticipate you're going to be? 4 MS. BAY RYLEY: Two (2) to three (3) hours, 5 depending on -- 6 MADAM COMMISSIONER: Okay. And then do we 7 have -- keep seated -- yes -- 8 MS. REENA LALJI: We're Counsel for Mark 9 Fecenko -- 10 MADAM COMMISSIONER: Yes. 11 MS. REENA LALJI: -- Glen Hainey anticipates 12 to be approximately one (1) hour to an hour and a half. 13 MADAM COMMISSIONER: Okay. Thank you. 14 And then we have the City? 15 MR. GORDON CAPERN: At present -- 16 MADAM COMMISSIONER: And Mr. McPhadden. 17 MR. GORDON CAPERN: -- right, at present, 18 Commissioner, I think I will be between three quarters of a 19 day and a day, depending on how this gets narrowed over the 20 next couple of examinations. 21 MADAM COMMISSIONER: Okay. 22 So, what I hear then, is no matter how fast 23 everybody else is, you're still going to be pretty much a 24 day. 25 And Mr. McPhadden and you would be --

1 MR. BRYAN McPHADDEN: At present I'd have 2 about an hour, but I guess that will depend on how much that 3 expands from others questioning. 4 MADAM COMMISSIONER: Well, let's see where we 5 are today and then -- I'm quite content to sit later today 6 for example, take a shorter lunch time if people want to do 7 that, if there's a... 8 I guess the only problem is keeping Mr. David 9 Moore awake, because he's come back -- 10 MR. DAVID MOORE: I'm probably not going to 11 have much of anything to add today anyway, so I wouldn't 12 weigh that too heavily. 13 MADAM COMMISSIONER: I'm not ever sure why 14 he's here with that jet lag he's probably suffering through 15 today. 16 MR. FRASER BERRILL: I'm anticipating some 17 objections from Mr. Moore. 18 MADAM COMMISSIONER: Well, why don't we aim 19 today, in any event to sit -- to take an hour lunch. So 20 we'll go until one o'clock and we'll be back at two o'clock. 21 MR. BRYAN McPHADDEN: Thank you. 22 MADAM COMMISSIONER: All right. And then if 23 need be we'll sit later on this afternoon as well. We'll see 24 how things go. 25 Okay. Good morning, Mr. Power.

1 THE WITNESS: Good morning. 2 MADAM COMMISSIONER: Yes, Mr. Berrill...? 3 4 CONTINUED CROSS-EXAMINATION BY MR. FRASER BERRILL: 5 Q: Mr. Power, thus far we haven't heard very 6 much about the Y2K committee meetings and its process, the 7 process of the committee. 8 And I just want to ask you a few questions 9 about that. I understand you were very involved with that 10 committee at the outset personally. You were on that 11 committee or attended its meetings early on in '98 and '99? 12 A: Which committee? 13 Q: This is the Y2K Steering Committee? 14 A: Steering Committee? 15 Q: I'm sorry -- 16 A: No, I was not part of any Y2K Steering 17 Committee. 18 Q: You were at its meetings from time to 19 time? 20 A: I attended at least one (1) meeting. I 21 don't recall any more than that. 22 Q: Okay. Were you aware of its doings and 23 its -- its purpose? 24 A: Oh yes. 25 Q: And I understand that there was a

1 representative of Council and the Mayor on it? Councillor 2 O'Brien? 3 A: That's correct. 4 Q: And all of the important meetings were 5 attended by senior staff of the City? 6 A: That's my understanding yes. 7 Q: And that all the minutes of those meetings 8 were filed with the Clerk of the City? 9 A: I believe so, but I'm not quite sure of 10 that. There were minutes that were filed, I'm not sure -- 11 Q: And the minutes of that committee went to 12 the senior management group and were fairly well known. They 13 -- the happenings of that group were quite well known during 14 the period? 15 A: Yes. 16 Q: Okay. It also, as I understand it, made 17 reports to Policy and Finance on a regular basis? 18 A: It made it's reports to the committee. 19 I'm not sure if that's the one (1), but there were reports - 20 - regular reports, yes. 21 Q: My indication is that it was -- 22 A: Yes -- 23 Q: -- and we'll see that because I just want 24 to refer to three (3) or four (4) of the minutes that have 25 been put in your book at the end. They're Tabs -- beginning

1 at Tab 59, I understand. They were just distributed this 2 morning. 3 Would you know -- do you know if you were 4 involved in preparing any of the reports that went to Council 5 or to Policy and Finance? 6 A: From the committee? 7 Q: From the committee? 8 A: Probably in relation to the 9 responsibilities I had as one (1) of the Project Managers, 10 each project had some input into the committee, reports for 11 example, was forwarded, so in that case I would have, yes. 12 Q: Okay. And do I take it, I'm just trying 13 to generalize here because we haven't seen all of the 14 information from these committees yet, but I take it that 15 there was a lot of planning, needs studies, analysis, that 16 kind of thing done, with respect to the work of the 17 committee, and in particular with respect to the needs of the 18 IT branch? 19 A: That would be correct, yes. 20 Q: In fact, there were particular teams set 21 up under the auspices of the committee that would report back 22 to the committee, for example, the desktop team, are you 23 familiar with that one (1)? 24 A: Yes. 25 Q: Is that the team that was run, if you

1 will, by Michael Franey? 2 A: No, that was managed by Kathryn Bulko. 3 Q: Okay. And that was responsible, as I 4 understand it, for the rollout of desktops that had been 5 acquired by the City, either directly or through lease? 6 A: That's correct. 7 Q: And it was a fairly detailed reporting 8 that they would give from time to time, with respect to who 9 got what, when, how much, and what was needed? 10 A: Yes. 11 MR. FRASER BERRILL: We've asked the City, 12 Madam Commissioner, for the back-up reports for these minutes 13 that I'm going to refer to. 14 That was asked about two (2) weeks ago. We 15 haven't received anything yet and I don't know whether or not 16 these reports are going to be relevant or important or 17 whatever. 18 But, they appear to be when one (1) reads the 19 minutes, that they might have relevant information in them 20 with respect to the workings of the Inquiry. 21 I'm just going to refer, sort of, topically 22 and introduce the topic now through Mr. -- Mr. Power, because 23 he's the first witness, it would seem to me that had -- had 24 any dealings with the committee. 25 And I'm going to make some of those points and

1 then we will presumably over the course of the next while, 2 examine those reports and determine whether or not they do 3 have relevance. 4 MADAM COMMISSIONER: So these are reports that 5 were dealt with by the Steering Committee? 6 MR. FRASER BERRILL: That's right. 7 MADAM COMMISSIONER: Mr. Capern, are you in a 8 position to assist us? 9 MR. GORDON CAPERN: I'm not at the moment, 10 Commissioner. The request came in during the March break and 11 I believe Mr. Centa is running into ground. 12 I'll check with him at the break and see how 13 he's doing. 14 MADAM COMMISSIONER: Okay. Thank you. I'd 15 appreciate that. 16 All right. Thank you. 17 18 CONTINUED BY MR. FRASER BERRILL: 19 Q: Just a general question to begin. Through 20 your work with the Steering Committee, would you know that 21 anyone paying attention to the operations of the Steering 22 Committee would -- would have a pretty good idea of the scope 23 of the Y2K project? 24 A: That would be fair, yes. 25 Q: And there were reports to the Steering

1 Committee -- or rather to Policy and Finance from time to 2 time with respect to the leasing program and its status from 3 time to time? 4 A: As I understand it, yes. 5 Q: Okay. Were you involved in the 6 preparation of any of those? 7 A: I don't believe so, no. 8 Q: So you're not in a position to help -- 9 help us today with respect to that? Okay. You did before -- 10 refer yesterday to an early report given to Council with 11 respect to leasing. It was a much earlier report, I was 12 referring to the -- the P&F report that went in July and you 13 said that there was a much earlier report and I haven't been 14 able to pin that down. I'm just wondering if you can 15 elaborate on that? 16 Did that come through the Steering Committee 17 to Council or how did it go, if you recall? 18 A: I -- I think so. I can't recall which 19 report specifically, now but I do recall reading some report 20 in reference to leasing as a method of financing IT hardware 21 and software. 22 Q: Was it a report that set out the 23 advantages of doing that or -- 24 A: Perhaps some background documents. I just 25 saw it as a point in the report.

1 Q: Okay then. So fairly early on and you 2 don't know which and we'll try to re -- run that report to 3 ground as well. You think that Council was aware of the 4 concept that -- that perhaps IT was -- or rather the Steering 5 Committee was going to recommend leasing? 6 A: Well, I can't attest to that but I can 7 just refer to what I had read. 8 Q: All right. 9 MR. GORDON CAPERN: Commissioner, if I can be 10 of some assistance here? 11 MADAM COMMISSIONER: Yes? 12 MR. GORDON CAPERN: There was passing 13 reference to the use of leasing, I believe, in the November 14 1998 report that went to Council. I'm not sure whether 15 that's what Mr. Berrill's referring to or not or whether 16 that's of any assistance to the witness and if we need to 17 turn to that, I can locate it at the break and make sure it's 18 available for us. 19 MADAM COMMISSIONER: Okay. I think it was the 20 witness who had said yesterday that he thought there had been 21 a report that went to Council before the July one in which 22 leasing was recommended. I think that's the context -- 23 MR. GORDON CAPERN: Hmm hmm. 24 MADAM COMMISSIONER: -- of Mr. Berrill's 25 question. I think.

1 MR. FRASER BERRILL: That's correct. I'm -- 2 MADAM COMMISSIONER: Yeah. 3 MR. FRASER BERRILL: -- just trying to chase 4 it down. 5 MADAM COMMISSIONER: Mr. Capern, it would be 6 useful in any event, if you could find this at the break. 7 That would assist Mr. -- Mr. Berrill or maybe it could be put 8 to Mr. Power to see if that refreshes his memory at all. 9 MR. GORDON CAPERN: I will. 10 MADAM COMMISSIONER: Thank you very much. I 11 appreciate it. 12 13 CONTINUED BY MR. FRASER BERRILL: 14 Q: I just want to introduce briefly the 15 concept of business case because I think -- I think it was 16 referred to yesterday, especially in reference to your 17 discussions with Mr. Fecenko about whether or not he saw the 18 business case for leasing. 19 And as I understand it, the Steering Committee 20 worked on the basis of business cases in that there were a 21 myriad of business cases that came before Steering Committee 22 for determination by them as to whether or not inter alia or 23 among other things there was a need for computer hardware or 24 software and that all of these business cases rolled up into 25 a need, if you will, for hardware and software. Does that

1 fairly represent -- 2 A: Yes, I think so. Yes. 3 Q: -- what was going on? 4 A: Yeah. 5 Q: So if you were to read all of those 6 business cases or read a report that referred to all those 7 business cases, you would have a pretty good idea, wouldn't 8 you, of what the demand for hardware and software -- software 9 was coming down the road? 10 A: I think so, yes. 11 Q: And if you wanted to know and were 12 interested to know or needed to know, any of the recipients 13 of the Steering Committee minutes or reports would have that 14 information? 15 A: Yes. 16 Q: And -- and it wasn't being hidden from 17 anyone? 18 A: Not to my knowledge, no. 19 Q: No. But at the end of the day there was 20 no -- there was no business case for leasing, per se? 21 A: Not that I saw. I have seen again, making 22 reference to a document I can't describe in detail, but there 23 was a report in a Council report format written by a previous 24 Commissioner of Corporate Services regarding the advantages 25 of leasing. I guess --

1 MADAM COMMISSIONER: Margaret Rodrigues? 2 THE WITNESS: Margaret Rodrigues? 3 THE WITNESS: Margaret Rodrigues. I think 4 I've seen this report somewhere in the documents I've seen, 5 but I don't recall seeing about it at the City. 6 7 CONTINUED BY MR. FRASER BERRILL: 8 Q: Okay. Well, tell me if I'm over- 9 simplifying the situation here, but as I understand it there 10 might not logically be a business case for leasing in the 11 concept that I've been referring to, in so far as the 12 workings of the Y2K Committee are concerned because leasing 13 wasn't an acquisition, leasing was just a method of paying 14 for what had been decided needed to be bought by virtue of 15 all of these business cases rolled up, is that correct? 16 A: That's correct. 17 Q: And that's not really an over- 18 simplification? I -- I'd like you to expand, if you want to. 19 Is that captured fairly accurate -- 20 A: That -- that captures it, yeah. 21 Q: I'm going to move then to a couple of the 22 Steering Committee meetings, and -- and I think it's been 23 inserted into Volume 3, it's Tab 59, in Volume 3. 24 The first one is the Steering Committee 25 minutes of its meeting October 7, and it's found at 15210.

1 A: Tab 50... 2 MADAM COMMISSIONER: Nine (9) 3 MR. FRASER BERRILL: 59. 4 5 CONTINUED BY MR. FRASER BERRILL: 6 Q: As I correct -- I'm working from a 7 different set here that's marked up, so. And I want to refer 8 you -- this is the first time you -- you've seen it, I guess, 9 in sometime, if ever. 10 I just want to refer you to paragraph -- well, 11 first of all, pointing out that a member of Counsel was -- 12 MADAM COMMISSIONER: Maybe -- maybe, sorry, 13 just before you go on then, Mr. Berrill. 14 Mr. Power, I just want to make sure you've had 15 an opportunity to read these new documents then. Have you 16 had that opportunity? 17 THE WITNESS: I've had the opportunity to look 18 at them, I don't -- I haven't read them in a lot of detail. 19 MADAM COMMISSIONER: But you've seen them 20 since -- was it since yesterday then? 21 MR. BRYAN McPHADDEN: No, they were just 22 delivered this morning. 23 MR. FRASER BERRILL: Oh, these -- 24 MR. BRYAN McPHADDEN: This morning, yes. 25 MADAM COMMISSIONER: Okay. Do you --

1 THE WITNESS: There were others that were that 2 were distributed yesterday. 3 MR. FRASER BERRILL: Well, there are only a 4 couple of sections that I really want to refer to in the 5 minutes, so I think it might be a waste of time to read the 6 whole document, but just if you generally familiarize 7 yourself with what occurred then I will point out the 8 specific items and then perhaps give you an opportunity to 9 study them. 10 MADAM COMMISSIONER: Mr. Powers, I have said 11 before, if you need any time to read something, and something 12 just comes up, we're not here to surprise you or ambush you 13 on anything, so if you need any time to read something, you 14 just let me know. 15 THE WITNESS: Okay. I will. Thank you. 16 MADAM COMMISSIONER: Okay. All right. 17 18 CONTINUED BY MR. FRASER BERRILL: 19 Q: There's just three (3) things in these 20 minutes I want to refer you to Mr. Power. The first one is, 21 Item 2, sub 1 , Oracle Licenses. 22 And I'm going to read that into the record 23 while you read it. Starting at the second sentence. 24 MADAM COMMISSIONER: Good Luck. Oh, the 25 second sentence, okay.

1 MR. FRASER BERRILL: Yes. 2 3 CONTINUED BY MR. FRASER BERRILL: 4 Q: "This has been looked at, and will be part 5 of the capital budget for next year. Now 6 that the City is leasing, the possibility 7 of getting multi-use licenses is being 8 investigated. Generic platform prices are 9 being obtained. Using schedule with the 10 master contract agreement is also being 11 looked at." 12 All right. This was October 7. And I just 13 ask if that helps you remember what was being talked about at 14 the time with respect to the possibility of leasing Oracle 15 Licenses at or about that time, if you have any recollection? 16 A: Well, I don't recall the specific 17 document, but I -- I do recall conversations about leasing, 18 making leasing arrangements for software licenses, yes. 19 Q: I'll just refer you again to the last 20 sentence: 21 "Using the schedule with the master 22 contract agreement is being looked at." 23 Now, I don't know if you -- you didn't write 24 this, but whether or not you have an understanding as to 25 whether or not that refers to the Oracle Master Contract, or

1 the Leasing Master Contract, or Master Lease, if you will? 2 A: I couldn't say. It couldn't -- you could 3 read it either way. 4 Q: I see. 5 A: You could read it as creating a master 6 contract agreement with Oracle with individual schedules, or 7 leasing a current lot under the master contract for leasing. 8 Q: Just adding it as a schedule to the master 9 lease? 10 A: Yeah. 11 Q: Yes. All right. Well, again I'm asking 12 you to go back but it may be that a study of Y2K minutes and 13 its reports would -- would help us a little bit with the 14 background as to what was being talked about. Is that 15 correct? 16 A: That's correct. 17 Q: All right. The next one I want to refer 18 you to is sub 2. That's 2, sub 2. 19 A: Hmm hmm. 20 Q: Now, it appears as -- from my perusal of 21 the minutes that Policy and Finance Committee report is an 22 item that appears quite often in these minutes and that there 23 were regular reports, sometimes weekly, to P&F and that -- 24 she was mentioning in that -- this is Wanda, indicated that a 25 Y2K report should be submitted for the October 14th meeting

1 and presumably, Ms. Liczyk was sensitive to making sure that 2 reports from the Y2K Committee -- Steering Committee would be 3 reported to P&F on a regular basis when they met. Is that 4 your recollection of it? 5 A: That was my understanding, yes. 6 Q: And does that help you at all to know 7 whether or not there were reports with respect to leasing 8 that went back to Policy and Finance from time to time? 9 Whether they'd be verbal or written or -- or however. 10 A: No, it doesn't. 11 Q: Okay and it's sub 3 is the next one -- 2, 12 sub 3 that I want to refer you to, is obsolete and 13 decommissioned computers. 14 A: All right. 15 Q: And I just want to point out here 16 obliquely through you whether or not this was an issue that 17 doesn't necessarily have to arise if you lease computer 18 equipment. You don't have to worry about decommissioning and 19 the cost associated with -- with that? 20 A: That's -- as regards to the equipment 21 that's on lease, yes. 22 Q: Yes. You can just really send it back 23 whatever -- whether you've negotiated a cost of returning 24 that equipment or not, at least it's not the $2 million 25 that's referred to here that's needed to recycle the

1 equipment? 2 A: That's correct. 3 Q: And I want to move to -- to the next 4 meeting and unfortunately, Commissioner, this wasn't 5 reproduced. It's the October 14 minutes and that's Begdoc 6 194, but what I propose to do, with your indulgence, is read 7 one short paragraph into the record from those October 14 8 minutes. 9 MADAM COMMISSIONER: What's the Begdoc number 10 again? 11 MR. FRASER BERRILL: Hmm hmm. 12 MADAM COMMISSIONER: You just gave it to me. 13 MR. FRASER BERRILL: Yes, I did. 14 MR. DAVID MOORE: 194. 15 MADAM COMMISSIONER: 194. Okay. 16 MR. FRASER BERRILL: Sorry, I have a 17 correction to make. I think it's -- it's actually 15225. I 18 apologize. 19 MADAM COMMISSIONER: All right and that's not 20 in the materials? 21 MR. FRASER BERRILL: And that's not in the 22 materials. 23 MADAM COMMISSIONER: So just read the 24 paragraph slowly and then we'll see whether we need it -- 25 MR. FRASER BERRILL: I shall.

1 MADAM COMMISSIONER: -- added to it. 2 3 CONTINUED BY MR. FRASER BERRILL: 4 Q: The particular paragraph is found at 15228 5 and it states: 6 "The Steering Committee requested that the 7 impact of all Priority 1 business functions 8 on next year's operating budget be provided 9 at the October 28 meeting. This should 10 include cost of licenses, application, 11 hardware, server maintenance, and what was 12 included in the 1999 budget and what should 13 be added for 2000." 14 So my question to you arising out of that, Mr. 15 Power, quite simply is the Steering Committee was one of the 16 sources, if you will -- one of the primary sources for 17 determining from a budgetary point of view what was going to 18 be needed down the road with respect to hardware and 19 software? 20 A: Yes, it would appear that way. 21 Q: And they were quite conscious of -- of 22 that responsibility? 23 A: Yes. 24 Q: The next tab is the October 28 meeting. 25 MADAM COMMISSIONER: At Tab 60?

1 MR. FRASER BERRILL: Tab 60. Thank you. 2 MADAM COMMISSIONER: And that's Begdoc 00187. 3 4 (BRIEF PAUSE) 5 6 CONTINUED BY MR. FRASER BERRILL: 7 Q: And I want to refer you to Item 5, which 8 is the update on the PCs for Councillors and election 9 management project. I understand that -- that the 10 Councillors wanted new computers and the suggestion was that 11 they'd be leased. Do you recall anything about that at the 12 time? 13 A: Not particularly, no. 14 Q: Okay. Well, unfortunately there's a 15 specific reference into the October 14 minutes that didn't 16 get reproduced that might have assisted you but my -- my 17 question is, in the event the Councillors decided after the 18 RFP that they wanted -- 19 MADAM COMMISSIONER: RFQ? 20 MR. FRASER BERRILL: RFQ. Excuse me. 21 22 CONTINUED BY MR. FRASER BERRILL: 23 Q: That they wanted new computers, would 24 those computers be included in the amounts that you had 25 anticipated would be leased in the future or would they be

1 added, if you will, to the $43 million? 2 A: To my knowledge, they would not have been 3 included in the original number. Councillors equipment was 4 considered different and outside, for the lack of a better 5 term, administration equipment. 6 Q: But if a decision was made and I think you 7 testified yesterday that all new equipment, in your 8 understanding, would be leased during the 1999/2000 period. 9 By definition, if you will, any request for new equipment 10 that arose after the RFQ would be in addition to what was 11 contemplated in the RFQ? 12 A: That's correct. 13 Q: All right and that would be a small 14 addition to the items that we've -- we've talked about, that 15 being the four thousand (4,000) additional desktops and the 16 additional major software, that kind of thing? 17 A: Yes. 18 19 (BRIEF PAUSE) 20 21 Q: The last meeting I want to refer you to is 22 November 4 which ... 23 MADAM COMMISSIONER: Tab 61. 24 MR. FRASER BERRILL: Is Tab 61. 25

1 (BRIEF PAUSE) 2 3 MR. FRASER BERRILL: And I just -- I would 4 like to refer you to -- 5 MADAM COMMISSIONER: Begdoc? 6 MR. FRASER BERRILL: -- and that's at 39673. 7 MADAM COMMISSIONER: Begdoc number, please? 8 MR. FRASER BERRILL: 39673. I apologize. 9 MADAM COMMISSIONER: Oh, okay. That's not the 10 one we have. We have 00222. 11 MR. FRASER BERRILL: Perhaps mine comes from a 12 different location in the database, but I assure you -- 13 MADAM COMMISSIONER: Okay. 14 MR. FRASER BERRILL: -- that's what it is. 15 MADAM COMMISSIONER: It's the November 18th, 16 1999 Steering Committee? 17 MR. FRASER BERRILL: No, I'm sorry. November 18 4. 19 MADAM COMMISSIONER: All right. That one is 20 at -- are these ones that you gave to -- to the Commission 21 that were to have been photocopied and they're not here. Is 22 that -- 23 MR. FRASER BERRILL: I believe so, yes. 24 MR. GORDON CAPERN: It's not in. 25 MR. FRASER BERRILL: It's not in?

1 MR. GORDON CAPERN: No. 2 MR. FRASER BERRILL: All right. Then I 3 propose just to -- because there's only one section, I just 4 propose to read that and then we can pass from -- from this 5 exercise. 6 MADAM COMMISSIONER: All right and what did 7 you say the Begdoc number for that was? 8 MR. FRASER BERRILL: It's 39673. 9 MR. DAVID MOORE: I happen to have an extra 10 copy here. I can put it before the witness if that might 11 assist. I think the passage Mr. Berrill is going to refer to 12 is quite short but nonetheless it might be helpful. 13 MADAM COMMISSIONER: That would be helpful. 14 MR. DAVID MOORE: Yes. 15 MR. BRYAN McPHADDEN: Can I have a quick 16 glance at that too? 17 MR. GORDON CAPERN: 39673. 18 MR. BRYAN McPHADDEN: Thanks. 19 20 (BRIEF PAUSE) 21 22 MADAM COMMISSIONER: Mr. Pat Moore, are you in 23 the position to assist me as to why these aren't in our 24 documents? 25 MR. PATRICK MOORE: I'm afraid not,

1 Commissioner but I will find out at the first opportunity. 2 MADAM COMMISSIONER: Thank you. 3 4 (BRIEF PAUSE) 5 6 THE WITNESS: Thank you. 7 8 CONTINUED BY MR. FRASER BERRILL: 9 Q: And it's Item 2(a), Mr. Power, that I want 10 to refer you to. And this seems to be the regular section in 11 these minutes regarding a report to the Policy and Finance 12 Committee, and the prior report that was written was 13 submitted. 14 And then it goes on to say at 2(a) -- 15 MADAM COMMISSIONER: The rest of us don't have 16 it, so -- 17 MR. FRASER BERRILL: So, I'm going to read it 18 very slowly. 19 MADAM COMMISSIONER: Thank you. 20 21 CONTINUED BY MR. FRASER BERRILL: 22 Q: "It was requested that in the next report 23 the following might be covered:" 24 Bullet point: 25 "- Good rate for acquisition received; and"

1 Next bullet point: 2 "- Leasing program." 3 Then it goes on to say: 4 "A breakdown by Department Divisions will 5 be provided to Finance and Departments on 6 leasing cost and impact for the year 2000 7 budget." 8 Now, I'm wondering if that refreshes your 9 memory at all as to whether or not at that point in time 10 there was a contemplation that the budget requirements for 11 2000 would be going to Policy and Finance, and whether or not 12 you were involved in that process? 13 A: It would be just peripheral knowledge, I 14 wouldn't have been involved in that. 15 Q: All right. There's one (1) final and very 16 brief reference in that minute or those minutes that I want 17 to refer to. And that's found at Item 3(b). 18 And it's under a recurring topic called, 19 Financial Expenditure, and that's found at Begdoc 39675. And 20 that's three (3) pages in, Mr. Power? 21 A: Yes, I have it. 22 Q: Financial Expenditure: 23 "109 million is committed at this point, 24 Wanda requested that an additional column 25 be added showing the "Projected to Project

1 End."" 2 MR. FRASER BERRILL: And projected to project 3 end, Commissioner, is in quotes and initial capitalizations. 4 5 CONTINUED BY MR. FRASER BERRILL: 6 Q: So, there was an effort at that point in 7 time, it seems to me, the time of the minutes anyway, to 8 determine what it would cost to finish the Y2K program. And 9 my question to you is whether or not that included the 10 leasing component? 11 A: It may, but that would be speculation by 12 me, I couldn't answer it properly. 13 Q: My final general question in referring to 14 this area -- 15 A: In the same document? 16 Q: No, no, no, there's no reference to a 17 document now, we're -- we're finished with that. Is -- is 18 that anyone reading the deliberations, and I may have asked 19 you this before, but I -- after we've gone through it I would 20 -- I would like to ask you this question again. 21 Anyone that really wanted to know what was 22 going on with respect to expenditures from a budget point of 23 view, could find the information, if you will, from reading 24 these reports and these minutes from time to time? 25 A: That would be correct, yes.

1 Q: Now, I want to pass to an entirely 2 different area, and that's the -- and I hope to be fairly 3 brief with it, but that's the -- the sixty (60) month issue, 4 the -- the movement from thirty-six (36) to sixty (60) 5 months. 6 And what we have in -- in evidence is the fact 7 that you may have received a copy of Ms. Viinamae's report of 8 October 1, which my reference is Volume 3, Tab 18. And maybe 9 if you just turn that up, if you want, just to refresh your 10 memory while we get into this topic. 11 12 (BRIEF PAUSE) 13 14 MADAM COMMISSIONER: Just give us -- the 15 Begdoc number is 13087. 16 MR. FRASER BERRILL: Thank you, Commissioner. 17 18 CONTINUED BY MR. FRASER BERRILL: 19 Q: So, you were aware through Ms. Viinamae at 20 that point in time, that Finance had decided to go with 21 leasing, at -- at their request, at least the decision had 22 been made? 23 A: Yes. 24 Q: Can you tell me who you would have thought 25 at the time had made that decision? I mean presumably

1 there's some body or some individual who makes the decision 2 at Finance request? 3 A: I'm not sure, I would guess it would be a 4 combination of Lana and Wanda trying to work out how to pay 5 for the expenditures of the year 2000 Project, but that's 6 again speculation, I wasn't party to that -- those kind of 7 conversations. 8 Q: So, from your point of view, from a -- 9 just putting your leasing hat on, if you will. These were 10 relatively crucial elements in the process that you weren't 11 asked in real terms to comment on or deliberate? 12 A: That's correct. 13 Q: And that's why the draft P&F Report that 14 we talk about so often, would get changed from time to time, 15 and you wouldn't necessarily know where that change occurred? 16 A: No. 17 Q: Or from whence it came? Did Finance ever 18 ask you for your input on the effect of changing to sixty 19 (60) months from other RFQ considerations, or the -- the 20 effect on maintenance or the return policy or any other item? 21 A: Not to my knowledge. 22 Q: Would it be fair -- 23 MADAM COMMISSIONER: The question was did 24 Finance ever ask you about any of these things, and you say 25 not to your knowledge. I'm not sure, are you saying that,

1 no, or you don't remember if -- you're the only one (1) who 2 would have knowledge of whether they asked you? 3 THE WITNESS: Yeah -- I'd have to -- I would 4 say no. 5 MADAM COMMISSIONER: Okay. 6 7 (BRIEF PAUSE) 8 9 CONTINUED BY MR. FRASER BERRILL: 10 Q: We've heard much about the letter, what I 11 call the Commissioner's letter, that's the letter that was to 12 go to the Commissioners rolling out the -- the program, if 13 you will. 14 And I think variously it seems to be dated 15 September 30th, I don't -- if you recall what I'm talking to 16 you -- talking about, I don't propose to turn it up, but it's 17 at Tab 83, or in Volume 3, Tab 20 -- Tab 20. 18 It was scheduled to go to a variety of -- 19 variety of people. It was never signed, and in your view, at 20 least there's no copy in the database that I've found, in any 21 event that was ever signed and in your view, it was never 22 circulated? 23 A: That's my understanding, yes. 24 Q: Can you tell me why that was the case? 25 A: No, I can't.

1 Q: Was there a decision made not to send it 2 because we weren't ready to -- at the City, to deal with -- 3 with that, at that point in time? In other words, the system 4 wasn't far enough advanced that we could deal with leasing 5 requests? 6 A: I -- I don't know why it was closed or not 7 sent. 8 Q: I note just in passing, that -- that the 9 -- that you were asked to find lease rate factors for the 10 sixty (60) month period, and that Connie Johns at MFP, and 11 this is Volume 3, Tab 21, is the -- is the reference, and I 12 -- I think you -- it's just the -- the note -- the e-mail 13 from her with respect to lease rate factors for sixty (60) 14 months for hardware and software. 15 MADAM COMMISSIONER: Mr. Berrill, could you 16 give us the Begdoc numbers please? 17 MR. FRASER BERRILL: Yeah, I'll have to turn 18 it up then. 19 MADAM COMMISSIONER: All right, 36609. 20 MR. FRASER BERRILL: Thank you very much. I 21 wasn't going to turn it up, Commissioner. 22 23 CONTINUED BY MR. FRASER BERRILL: 24 Q: I just am wondering, this -- this seems to 25 be dated October 6th, whereas the announcement from Ms.

1 Viinamae seems to be October 1. 2 So, it's -- in looking at those two (2) 3 documents, I -- I'm drawn to the conclusion that the decision 4 to go financing was done before lease rate factors were even, 5 if you will, promulgated, or at least issued by MFP, at least 6 by Ms. Johns anyway; is that correct? 7 A: That's the way it looks, yes. 8 Q: So, the move to six (6) month leasing was 9 -- was a fait accompli, insofar as you were concerned? 10 A: Yes. 11 Q: Whether or not Finance, by other means, 12 knew the lease rate factors in order to make a decision is 13 something we don't know? 14 A: That's correct. 15 Q: Or something you don't know? 16 A: Something I don't know. 17 Q: Do you know if it was MFP's suggestion to 18 go to sixty (60) months? 19 A: I don't know. 20 Q: Any light you could shed on that? 21 A: I don't know that. 22 Q: Now, the Commissioner's been very 23 interested, quite properly in -- in whether or not when the 24 decision was made to go with sixty (60) months if the issue 25 should have been re-tendered -- the whole project at that

1 point should have been re-tendered and I've done for my own 2 mind, maybe we'll just put in at one place for the record. 3 There were four (4) basic reasons that have been tendered 4 thus far as to why it wouldn't have been a good idea or why 5 it wasn't necessary. 6 The first one, as I understand it, is that you 7 thought there was flexibility in the Council resolution, 8 enough to allow the move to sixty (60) months? 9 A: Yes. 10 Q: The second one suggested yesterday by Mr. 11 Moore was -- Mr. Pat Moore that -- that MFP, at that point in 12 time, was the vendor of record and that therefore wasn't 13 appropriate to change and you, as I understand it, vacillated 14 as to whether or not that was a reason that was -- was, in 15 your mind at the point in time, as to whether or not it 16 should not be re-tendered. 17 My -- my question is is that a reason why it 18 shouldn't have been re-tendered or not? 19 A: I think that would be a reason for 20 consideration, yes. 21 Q: Okay. And then suggested by Mr. MacKenzie 22 yesterday and I was going to ask you these questions. 23 Basically, at that point in time you were running out of 24 time. I mean, this project had been going since May and you 25 still didn't have a lease deal --

1 A: Yes. 2 Q: -- and you wanted to be seen to be getting 3 on with it and that was one reason. 4 An important reason, as well, is the concern 5 that the equipment would be getting -- was getting stale and 6 that it would -- you wouldn't get full value for it when you 7 put it on a lease if you waited any longer? 8 A: That's correct. 9 Q: And that probably, among all of the 10 reasons, is the most important one? Would you say? 11 A: I would say so, yes. 12 Q: And then I'm going to suggest to you a 13 fifth reason. That if you were re-tendering for sixty (60) 14 months, chances are good from the various -- from the six (6) 15 people that had chosen to tender the first time, you would 16 have a lot less variation in prices or lease rate factors 17 being suggested by those six (6) bidders, because at that 18 point in time it was a sixty (60) month deal, which is very 19 close to what we have termed in the Inquiry thus far, a full 20 payout deal. 21 In other words, there's less residual, less 22 equity that a bidder would want to put in so that the prices 23 are probably going to come in very much closer. 24 A: Yes. 25 Q: Is that correct? So that the exercise

1 you'd be going through and the benefit that might be gained 2 from the City for re-tendering would be marginal or at least 3 potentially marginal? Would you agree with that? 4 A: Yeah, I would agree to a certain extent. 5 There is a lot of other analysis that would be need to be 6 done, as well. 7 MADAM COMMISSIONER: There's a what? Sorry. 8 THE WITNESS: There would be other analysis -- 9 I think other analysis factors that would have to go into a 10 decision to re-tender. 11 12 CONTINUED BY MR. FRASER BERRILL: 13 Q: But would you agree that that would be a 14 valid reason for you not to re-tender? 15 A: That would be a valid reason, yes. 16 Q: Now, I'm going to move to the sale and 17 leaseback topic and I hope to be fairly brief with it but at 18 the end of the day, Mr. Power, is there any doubt in your 19 mind that that was what was contemplated by the RFQ at the 20 time? 21 A: There's no doubt in my mind, no. 22 Q: And at least all of the bidders would 23 reasonably anticipate that if one reads Section 3 of the RFQ 24 because that refers -- and I won't take the time to turn it 25 up, but that refers to a section of equipment that was

1 already purchased by the City? 2 A: Yes. 3 Q: And, in fact, a few -- as My Friend, Mr. 4 MacKenzie pointed out, a few -- there were a fe -- a few 5 bidders refused to quote on that equipment and would only 6 quote on new equipment except for the captive lessors that 7 would quote on their own equipment, if it would ha -- had 8 already been purchased. Is that correct? 9 A: That's as I recall, yes. 10 Q: All right. So, if you were to have thrown 11 out the quotes, if you will, for the people that weren't 12 prepared to bid on -- on the sale and leaseback basis and you 13 were to throw out quotes based on an incomplete mechanism 14 given with respect to 1.1.17, as has been the argument 15 because it wasn't tied to a bond rate. You -- you might have 16 only a couple bidders left? 17 If you really held all the bidders to the 18 technical interpretation, if you will, or an argumentative 19 interpretation, to the lease documents the RFQ? 20 A: I believe that's correct, yes. 21 Q: Did anyone within the City, to your 22 knowledge, when it was finally determined that, if ever, that 23 it was, in fact, a sale and lease back transaction; anybody 24 from Legal, or the Clerks office come to you and say, Hey 25 wait a minute this is not -- this is not kosher, if you will,

1 this is not the way we do business here, we have to have 2 specific authority for a sale of assets? 3 And I ask you this before the issue seemed to 4 come into the public form and later in 2001. 5 A: No, they did not. 6 Q: I want to refer you to Volume 3, Tab 8. 7 And that's Begdoc 35869. And this is on this issue as well, 8 and I don't know if you received a copy of this eventually, 9 but it has some relevance to some of the testimony that 10 you've given already on the issue of sale and lease back. 11 And my point is I -- this, as I understand it, 12 is a memo from an outside vendor of equipment, Mr. Stunell, 13 who is a collections consultant and it's from one of the 14 suppliers. 15 And as I understand what Mr. Stunell, acting 16 on behalf of Sun Microsystems as I understand it, is saying 17 he's -- he's concerned generally, I would think, about the 18 fact that -- that payments to his principal are not being 19 made by MFP or by the City. 20 And Ms. Viinamae is coming back, and I refer 21 you to the paragraph about 2/3 of the way down, she says: 22 "As the City is required to follow due 23 process and obtain approval from Council, 24 the establishment of a leasing arrangement 25 took longer than planned. The City plans

1 to sell all goods acquired in '99 from all 2 of you..." 3 Meaning the equipment suppliers, I imagine. 4 "...to MFP and lease it back." 5 So, would you say that, at least, was the 6 contemplation of the outside vendors that there would be a 7 sale of their equipment and a lease back? 8 A: Yes. 9 Q: Then I want to go on to sub-paragraph B, 10 or rather -- no, I just want to keep reading, I'm sorry, from 11 there, in order: 12 "In order to facilitate this process..." 13 And that's the sale and lease back process, 14 I'm assuming? 15 "...I am requesting each of you to, a) 16 issue a credit invoice to the City of 17 Toronto for the cost of all hardware, 18 software licenses and maintenance, 19 including tax, issued in 1999." 20 And then: 21 "b) Issue an invoice to MFP for the same 22 items outlined above excluding tax." 23 My point there being, I think you were asked 24 yesterday, or -- or perhaps the day before, whether or not 25 anyone was paying attention to the sales tax issue.

1 And what was contemplated under this scheme at 2 this point in time anyway, was a refund, if you will, of the 3 tax because she was asking -- or, Ms. Viinamae was asking 4 that the vendors deduct the tax from the invoice to MFP so 5 that the City wouldn't have to pay the tax. 6 A: That's right. 7 Q: Now, you said that you weren't 8 specifically involved in that at the time, but I assume that 9 from this, Ms. Lana -- Ms. Viinamae was looking after that 10 issue? 11 A: Yes, I think so. 12 Q: Yes. Did she discuss that with you at any 13 time, or I'm just wondering if this helps refresh your 14 memory? 15 A: Not that I recall specifically, no. 16 Q: Okay. 17 A: Not at this stage anyway. 18 Q: To be fair, as I understand the evidence, 19 this is, in fact, not what occurred, that there was in fact a 20 Bill of Sale, and that the City would have to apply for a 21 rebate. 22 But I just point that out for the record, and 23 -- and not -- not to mislead you or -- or the Inquiry, but I 24 just point out that it appears that Ms. Viinamae or the CMO 25 was alive to the issue at that point in time.

1 (BRIEF PAUSE) 2 3 Q: Now, I plan to move onto the issue of 4 1.1.17, and we've talked about this ad nauseam. 5 I just want to make this -- this one (1) 6 point, to add to the -- to the fire. If one is to lock lease 7 rate factors to a bond rate in the future, theoretically at 8 least, the City doesn't take advantage of any decreases in 9 costs due to market factors or competition or changes in 10 technology, because sure, the City might be covering the 11 downside with respect to future price increases, but it 12 neglects the savings that it might gain through the other 13 factors that would affect lease rates from time to time; is 14 that fair? 15 A: That's fair. 16 Q: And that to ignore those factors in citing 17 a mechanism under 1.17, is not a complete, if you will, 18 addressing of the -- of the issue of all of the components 19 that go into future lease prices; is that fair? 20 A: That's fair. 21 Q: And is that why you would say that MFP's 22 response therefore, was acceptable, because it did address, 23 if you will, and say that it would address all of the 24 relevant factors in providing lease rate factors in the 25 future?

1 A: Yes, as I stated yesterday, it was 2 acceptable. 3 Q: And I think you also agreed yesterday with 4 Mr. Pessione's conceptualization of -- of what was going on, 5 that it was 90 percent price and 10 percent subjective at the 6 end. And that the responses to these issues would be looked 7 at, but they would be more subjective than -- than -- than 8 objective, if you will? 9 A: The subjectivity in these kinds of 10 requests for quotes is probably more around the -- the vendor 11 itself. If -- if you come across one (1) you haven't heard 12 about before or you're not familiar with, then the percentage 13 of the evaluation would go into determining whether this 14 person is a reasonable -- or this company is a reasonable 15 person to do business with or not. 16 So, the most of it is to do with the cost. 17 Q: And at the end of the day what we had here 18 were six (6) bidders that were quite reputable, in -- in your 19 terminology, would that be fair? 20 A: That would be fair. 21 Q: And there wasn't a whole lot to choose 22 from among them, from an objective or even a subjective point 23 of view? 24 A: That's correct. 25 Q: All right.

1 (BRIEF PAUSE) 2 3 Q: Now, as I understand it, there were lots 4 of people involved and it's a bit Byzantine, as I understand 5 it, various constituencies at the City, involved in making 6 decisions with respect to leasing from time to time, and I'm 7 just referring to the leasing issue alone. 8 And -- and you were, as I understand it, a 9 consultant that was basically parachuted into that situation. 10 Is that a correct sort of characterization of the challenges 11 you were faced with? 12 A: I'm not sure if I'd use the word 13 parachuted. I think the activity would naturally fall to the 14 -- the group that I was leading, either myself or Mr. Batten, 15 to lead such a project. 16 I was the one (1) who did it, and again, some 17 knowledge of putting those things in place before, I guess. 18 So, I don't know if parachute is a good word for it. 19 Q: Yeah, you were -- you came to the City and 20 were asked to somehow fit into the structure, I guess? Find 21 your niche? 22 A: No, I -- I came to the City first, as I 23 say, on a very specific project for implementing a human 24 resources system with the then Metro organization and was 25 asked to stay on when the Year 2000 Project, or activities

1 started getting under way. 2 Q: But eventually you find your -- yourself 3 being involved, as I understand it, with sales tax issues, 4 authority issues -- 5 A: Yes. 6 Q: -- signing issues, sale and leaseback 7 issues, all kinds of issues involving all kinds of different 8 departments, and -- and you didn't quite know where you fit 9 into that structure; is that -- is that fair to say, or 10 how -- 11 A: I think it would be fair to say, but we 12 had other people like that as well, with the -- the Year 2000 13 Project, we couldn't -- we had it described as best we can, 14 in the scientific terms, but there were things that turned up 15 we weren't expecting and we had to deal with them. 16 Q: Was your sense at the -- at the time, the 17 operative time, that there -- there was a feeling of pressure 18 on -- on the group that you reported to, and maybe some of 19 the other Departments that were brought about -- about by 20 budgetary constraints and the zero (0) taxation requirements, 21 and the Y2K coming around -- you at the corner? 22 A: I don't know about the zero (0) taxation 23 issue, but the Project itself had tremendous pressure on it, 24 just from the deadlines we had set, the amount of work that 25 had to be done, and the -- I should say the late start we had

1 in relation to any other organization of that size. 2 Q: Was there a sense of frustration that 3 decisions had to be made, and maybe were made, but that the 4 process was getting in the way? 5 A: At -- at times. I think that as the 6 project evolved with amalgamation, moved along, I think the 7 processes were invented to meet the requirements. 8 Q: But it took time to get those processes 9 roll -- processes rolled out and -- and up and running? 10 A: Yeah, it took some time, yes. 11 Q: And there was frustration with that, the 12 number of people that had to be consulted before that would 13 occur? 14 A: Yes. 15 Q: Can you comment, if -- if you will, on -- 16 on MFP's posture in -- in all of this, all of these issues 17 that were swirling around. Were they sensitive to it, were 18 they cooperative? 19 A: Well, to my knowledge, yes, I had no 20 difficulty dealing with them. 21 Q: And -- and helpful, professional 22 throughout the piece? 23 A: Yes. 24 25 (BRIEF PAUSE)

1 Q: I just want to briefly touch on -- on the 2 issue again of Councillor computers. And I want to refer you 3 to Tab 2 in Volume 3, would you turn that up please? 4 5 (BRIEF PAUSE) 6 7 Q: That's Begdoc 29769. 8 9 (BRIEF PAUSE) 10 11 Q: And this is a division, what I've been 12 calling an ITLA, an I-T-L-A, and this is the form that is 13 required to be filled out when you want to lease a piece of 14 software or hardware? 15 A: Yes, that's correct. 16 Q: And this happened with respect to 17 computers leases, it happened to come from the Clerk's 18 office, Ms. Wong, who was the Clerk. And it would be a 19 request, so that at least at the Clerk's office, they knew 20 that items were being leased, computer -- computers were 21 being leased, whether or not it was in excess of the $43 22 million or not, is -- is something that we'll have to one (1) 23 day try to trace back. 24 But I -- I note first of all, that the -- 25 finally the -- the vernacular that you had been pumping for

1 -- gets added to the box at the top and I refer now to the -- 2 the drafted list as we've had it before -- seen before 3 referring to the approval for acquisition coming under the 4 business continuity plan, the approval for leasing coming 5 through Policy and Finance to Council on July and then has 6 added MFP Financial Services as vendor of record for leasing. 7 8 Do you know anything about how that got added? 9 That part of it? 10 A: When we sent these documents up to be 11 completed by the departments that needed computer equipment 12 and it was essentially the document was designed to go 13 forward through the whole process and eventually end up at 14 Purchasing is that's what was -- that's the path it was going 15 to be taken. 16 MADAM COMMISSIONER: I didn't take that to be 17 Mr. Berrill's question. I thought -- 18 THE WITNESS: Oh. 19 MADAM COMMISSIONER: -- the question was how 20 did the last sentence get to be added? The last sentence at 21 the top in the box, MFP Financial Services is the vendor of 22 record for leasing, that in earlier drafts that part had not 23 been included? 24 MR. FRASER BERRILL: That's my understanding. 25 THE WITNESS: Okay.

1 MADAM COMMISSIONER: Do you know how that came 2 to be added in there? 3 THE WITNESS: Not specifically those words, 4 no. Just -- other than to explain as best we can the terms 5 and conditions under which this equipment would be acquired, 6 under whose authority that as specifically who added it 7 there, I don't know. 8 9 CONTINUED BY MR. FRASER BERRILL: 10 Q: I wanted to ask him that and very quickly, 11 I hope, move to the topic of entertainment and it hasn't been 12 a topic that you've been asked questions about but I just 13 want to cover it off briefly. 14 Were you ever by MFP offered seats to the Air 15 Canada Centre or entertainment at the Sky Dome or 16 entertainment of that nature? 17 A: No. 18 Q: I understand your testimony to be that you 19 might have attended business lunches from time to time but 20 you have no specific recollection of that? 21 A: I -- I don't recall a business lunch at 22 the City. I think one reference earlier I had at least one 23 working lunch with Irene Payne when I was with the province 24 but I don't recall any such things at the City. 25 Q: Were you, Mr. Power, ever -- and I'll use

1 this term importuned or pressured to take any offer of 2 entertainment on the scale that we've been talking about -- 3 A: No. 4 Q: -- by MFP? 5 A: No. 6 Q: And it was -- I assume, was it known by 7 all of the bidders that you were instrumental in -- in 8 issuing the RFQ? 9 A: I suspect it became known after the 10 document was on the street, perhaps, yeah. 11 Q: Were you offered any entertainment by 12 other bidders prior or subsequent to this? 13 A: No, no. 14 Q: Was the amount of entertaining that was 15 done by MFP different, in your perception, from what was 16 occurring in the industry as a whole? Did it stand out to 17 you as being profligate or untoward? 18 MADAM COMMISSIONER: Are you asking him about 19 what he's heard since the Inquiry started or what he knew -- 20 MR. FRASER BERRILL: What -- 21 MADAM COMMISSIONER: -- at that time? 22 MR. FRASER BERRILL: Sorry, Commissioner. 23 What he -- what you knew at the time. 24 MADAM COMMISSIONER: Did you know of any 25 entertaining that was going on at the time?

1 THE WITNESS: Oh, I knew of some people being 2 entertained. I don't know if I could comment on -- on that. 3 4 CONTINUED BY MR. FRASER BERRILL: 5 Q: Really what I want to ask you, Mr. Power, 6 is whether or not at the time MFP was known in the industry, 7 insofar as your perception was, as a big time spender if you 8 will? 9 A: I wouldn't -- I don't know. 10 Q: I'm asking if it stood out to you? 11 A: I don't think so. It wouldn't stand out 12 any than any other large organization, no. 13 Q: Very good. 14 15 (BRIEF PAUSE) 16 17 Q: Now, I just want to go through the 18 blackout period with you, and -- and -- 19 MADAM COMMISSIONER: Just before we leave this 20 area -- 21 MR. FRASER BERRILL: Thank you. 22 MADAM COMMISSIONER: -- when you were with the 23 Province, you were involved in some pretty large RFPs, and 24 did bidders on the street know that you were the person that 25 they might need to talk to?

1 THE WITNESS: Yes. 2 MADAM COMMISSIONER: And did you get calls 3 from them then, at work, for example? 4 THE WITNESS: Occasionally, yes. 5 MADAM COMMISSIONER: Okay. And would you ever 6 get calls from any of them at home? 7 THE WITNESS: No. 8 MADAM COMMISSIONER: Did you ever get calls 9 from any sort of bidder calling you at your home, when you 10 were with the Province? 11 THE WITNESS: No. 12 MADAM COMMISSIONER: Okay, thanks. 13 14 CONTINUED BY MR. FRASER BERRILL: 15 Q: Now, there's a convention that appears to 16 have been adopted, and I -- I don't know if it's taken more 17 literally in this Inquiry than it was in the industry, but 18 it's known as the blackout period, and that's the period from 19 the RFQ, in this case, June 11th, to the announcement by 20 Council of an award of the contract, which was variously 21 described at June -- July 27th. 22 MADAM COMMISSIONER: Is the -- are we using 23 the date June 11th, then, or May, when the RFQ is issued, or 24 when the RFQ deadline occurred? 25 MR. FRASER BERRILL: Excuse me, Commissioner,

1 you're absolutely right, it's May 11th, from the time that 2 it's issued. 3 MR. DAVID MOORE: Well, my recollection is 4 that different people have said different things -- 5 MADAM COMMISSIONER: Right. 6 MR. DAVID MOORE: -- about what the operative 7 date is, so it probably depends upon which piece of testimony 8 one picks, that may be ultimately something that -- 9 MADAM COMMISSIONER: Well, it might -- let's 10 find out what the question is, and it might be that the 11 question is a generic general question, and it might not make 12 any difference to the actual time line. 13 MR. FRASER BERRILL: It is, Commissioner, and 14 -- and that's why I -- I prefaced the question that way, 15 because it didn't seem to be a very hard and fast concept, 16 and that's -- that's what I -- I want to try to draw from 17 you, Mr. Power. 18 19 CONTINUED BY MR. FRASER BERRILL: 20 Q: Were -- were you aware that, hey, from 21 this date, I'm not supposed to talk to anybody until this 22 date, when I'm allowed to talk to someone. Was that brought 23 home to you, or...? 24 A: Well, the general rule is sometimes 25 written, and sometimes written well, that when an RFP or some

1 sort of competitive activity is on the street, there are 2 rules around who can be contacted and under what conditions 3 and how answers can be supplied to those asking questions. 4 When the bids close, it goes into a different 5 phase. The people who are evaluating the documents are 6 advised not to contact or have contact with suppliers unless 7 it's done in some kind of controlled method, where if we -- 8 MADAM COMMISSIONER: As long as it's done, 9 what? 10 THE WITNESS: In a controlled method, if we 11 have -- 12 MADAM COMMISSIONER: Oh, yes, okay. 13 THE WITNESS: -- situations where we can't 14 understand what's being proposed, we have the opportunity to 15 go back out and ask some questions of a particular vendor. 16 But the -- the general rules of thumb are we 17 don't contact the vendors and we don't accept contact from 18 them during this period. 19 20 CONTINUED BY MR. FRASER BERRILL: 21 Q: And by this period do you mean -- which 22 period do you mean? 23 A: The period when the evaluation begins 24 until the recommendation has been approved. 25 Q: Right. So, that would be from the time

1 the bids are opened? 2 A: Yes. 3 Q: Thank you. Now, however you describe a 4 period, whether it's from the time of the issue until award, 5 or from the time of -- of bid, the bids being opened, you 6 received a call from Mr. Domi, and it was a thirty (30) 7 second call, but you don't recall having received it at all? 8 A: No, I don't. 9 Q: And I'm assuming from that, that there was 10 -- was no message, phone message that you ever got from Mr. 11 Domi, saying I'm calling you, return my call, I want to 12 contact you? 13 A: Not that I recall. 14 Q: All right. Did you hear from anyone else 15 at MFP during the blackout period? 16 A: I don't believe I did, no. 17 Q: No. Did you receive any influence, and I 18 use that in the -- in the broadest possible sense, at all, 19 during what might be termed the blackout period, from -- and 20 I'll go through a -- a very brief list here, from Mr. 21 Jakobek -- 22 A: No. 23 Q: -- did he call you at all during -- 24 A: No. 25 Q: -- any lobbyist whatsoever, on behalf of

1 any party? 2 A: No. 3 Q: Did you hear from Vince Nigro? 4 A: No. 5 Q: Or anyone at the Mayor's office or the 6 Mayor himself? 7 A: No. 8 Q: Did you come to know whether or not there 9 had any -- been any influence, if you will, brought to bear 10 on anyone in any of the other departments during the 11 evaluation period? Whether it be Finance or Purchasing or 12 whatever? 13 A: No, I wasn't aware. 14 Q: Now, we -- we've talked about the April 30 15 draft report and you can turn it up if you want. It's found 16 at Volume 1, Tab 104 but I think you know the report that I'm 17 talking about. 18 A: Yes. 19 Q: I think we've -- we've -- and therefore, 20 Commissioner, I'm not going to give you the Begdoc number. 21 MADAM COMMISSIONER: You can still give me the 22 Begdoc number for my records here. 23 MR. FRASER BERRILL: I just don't have -- 24 MADAM COMMISSIONER: Oh, you don't have it? 25 Okay. I called your bluff.

1 (BRIEF PAUSE) 2 3 CONTINUED BY MR. FRASER BERRILL: 4 Q: Now, you were asked a number of questions 5 about that, most of which had to do with the fact that you 6 did draft it and I just want to ask you a couple of very 7 brief questions. 8 You, as I understand it, used prefer -- 9 precedents or templates from the province in doing your 10 draft? 11 A: Yeah. 12 MADAM COMMISSIONER: Okay. 13 MR. FRASER BERRILL: I think you have to say 14 yes. 15 THE WITNESS: Yes, yes. 16 17 CONTINUED BY MR. FRASER BERRILL: 18 Q: Therefore you didn't use the draft of 19 April 30 in any RFQ that you drafted? In fact, you hadn't 20 seen it until lately? 21 A: Well, when I was advised that the document 22 to go out would be an RFQ as opposed to an RFP then we really 23 had to manufacture something because I had no templates. I 24 hadn't done that before. 25 Q: And my final question in this area is that

1 this document, this -- the Kassam document or the April 30th 2 draft. If it's found in anyone's possession, it wouldn't 3 give them a running start or any leg up or advantage 4 whatsoever insofar as responding to your RFQ is concerned? 5 A: I wouldn't think so, no. 6 Q: Okay and I'm going to move on to your 7 dealings with Mr. Fecenko. 8 MR. PATRICK MOORE: Commissioner, sorry to 9 interrupt but -- 10 MADAM COMMISSIONER: Yes? 11 MR. PATRICK MOORE: -- would you like the 12 Begdoc number for that -- 13 MADAM COMMISSIONER: Sure. 14 MR. PATRICK MOORE: -- document 104. 15 MADAM COMMISSIONER: May as well. 16 MR. PATRICK MOORE: It's COT0-29280. 17 MADAM COMMISSIONER: I should probably have 18 that one memorized by now. Thank you. Okay, with respect to 19 Mr. Fecenko? 20 21 CONTINUED BY MR. FRASER BERRILL: 22 Q: I think your testimony is thus far, just 23 to set the stage, you didn't send him the RFQ or the response 24 in order to do his work? You just sent him the draft of the 25 master lease, as I understand it.

1 A: To the best as I -- I understand it, as 2 well, I don't believe he asked for it. 3 Q: All right and Council authority, you 4 wouldn't have sent that to him because that really had 5 nothing to do with -- with what you were asking him to 6 comment on and that being the commercial reasonableness of 7 the -- of the document? 8 A: I'm sorry. What do you mean by Council 9 authority? 10 Q: The authority to enter into the master 11 lease. I think that was put to you by Mr. Moore as to 12 whether or not that was sent to Mr. Fecenko. 13 A: I don't think so, no. 14 Q: Yeah, yeah and you would have no reason to 15 send that to him? 16 A: No. 17 Q: No. Then the question, I think, was that 18 was the business case sent to him and I think your testimony 19 thus far, as I understand it, was there really was no 20 business case released? 21 A: That's correct. 22 Q: All right and you just said that he didn't 23 ask for the RFQ or response? 24 A: That's right. 25 Q: That's your recollection? But he doesn't

1 seem to restrict his opinion or qualify it by not having 2 received an RFQ or response? 3 A: That's correct. 4 Q: Now, I'm going to refer you briefly to his 5 bill which is found at Book 3 -- Volume 3 at Tab 16. 6 7 (BRIEF PAUSE) 8 9 Q: And that's at Begdoc 10628 and that's the 10 -- the bill of Fasken Campbell Godfrey, as it then was, dated 11 September 30, covering the period during which you had 12 engaged Mr. Fecenko to review the master lease. 13 And I want to refer you to Page 3, 10630 is 14 the Begdoc, which in my reading of this document is -- 15 appears to be the operative billings for the period and 16 efforts related to the review of the master lease and that's 17 on the 18th of August. That's 3.6 hours. The 19th of 18 August, 2.3 hours. The 19th of August again, 1.7 and the 19 20th of August which is a letter to the City, which I'm 20 assuming is the opinion letter, of 1.3 hours. 21 Am I correct in assuming in your review of 22 this, Mr. Power, that those appear to be the time allocations 23 toward the efforts given to the master lease? 24 A: Yes. 25 Q: And I just point out for the record that

1 that appears to add up on my rapid calculation to 8.9 hours. 2 Do you see these bills, Mr. Power, when they come in or does 3 someone else approve them for payment? 4 A: No, they would come to me and other people 5 in the -- on the project and we would initial them before 6 they went to the solicitor's office for payment processing. 7 Q: And, in fact, the City of Toronto was 8 already working with a form of master lease with MFP, being 9 the Councillor lease, and would have some kind of passing 10 understanding of the concept of a master lease and that one 11 in particular, in any event. 12 A: Yes. 13 Q: I want to turn, Mr. Power, to a question 14 Mr. Moore asked you, I believe on Tuesday, with respect to 15 the return equipment aspect of the -- of the RFQ and the RFQ 16 I'm going to refer you to is found at Tab 103. 17 A: Of Book 1? 18 Q: I'm sorry. That's Volume 1, your -- of 19 your documents. 20 21 (BRIEF PAUSE) 22 23 Q: And I imagine the Commissioner has that 24 number memorized but it's 23413 and it's Page 24 that I want 25 to refer you to and that's 23439. Mr. Moore referred you to

64
  1  the costs associated with pickup and delivery and then zero
  2  (0) -- zero dollars ($0).
  3                 A:  Yes.
  4                 Q:  Now, I just -- I ask you to maybe put a
  5  pencil in that in case you have to come back to it and then
  6  I'm going to refer you to the master lease which is just one
  7  tab before, 102 and the return of equipment, Section 116 --
  8  or rather 16 which is found at 20601.
  9                 Now, the -- the response -- the RFP response
 10  refers to pickup and delivery and not to return of equipment. 
 11  My question is the pickup and delivery --
 12                 MADAM COMMISSIONER:  I --
 13                 MR. FRASER BERRILL:  -- isn't very --
 14                 MADAM COMMISSIONER:  I'm sorry.  Can you tell
 15  me, 2060 -- oh, I have it.  Okay.
 16  
 17  CONTINUED BY MR. FRASER BERRILL: 
 18                 Q:  Refers to pickup and delivery and I don't
 19  want to -- to quibble here but it doesn't talk about whether
 20  or not that refers to at the time of the return of the
 21  equipment or the time of delivery of equipment or the time,
 22  in the very next section, of relocation of equipment.
 23                 MADAM COMMISSIONER:  You know what, I'm not
 24  actually where you are.
 25                 MR. FRASER BERRILL:  All right.

65
  1                 MADAM COMMISSIONER:  20601.  Is it Number 16?
  2                 MR. FRASER BERRILL:  16 is the return of the
  3  equipment and then I'm referring back to Page 24.  So it's
  4  Page 24 and the return of equipment --
  5                 MADAM COMMISSIONER:  Right.
  6                 MR. FRASER BERRILL:  -- section that I am
  7  referring to, both.
  8                 MADAM COMMISSIONER:  Okay.
  9  
 10  CONTINUED BY MR. FRASER BERRILL:
 11                 Q:  And I'm -- I'm pointing out a couple of
 12  things to the witness and asking for his comments.  And my
 13  first observation is that the pick up and delivery doesn't
 14  refer to, necessarily, if you will, return of the equipment,
 15  which was negotiated in the master lease, which are the two
 16  (2) clauses that Mr. Moore tried to put to you yesterday?
 17                 And my question to you is, can the costs
 18  associated with pick up and delivery perhaps be interpreted
 19  by a reader to relate to pick up and delivery at the outset
 20  of the lease, or pick up and delivery at relocation, which is
 21  the -- the issue delineated immediately above it, or is it
 22  perhaps at the end of the lease?
 23                 MR. GORDON CAPERN:  Commissioner, if I might.
 24                 MADAM COMMISSIONER:  Yes.
 25                 MR. GORDON CAPERN:  I have to take some

1 exception to that question. If the question is what did Mr. 2 Power understand it to mean, that's fine. But as to whether 3 or not there's a broader -- Mr. Power has the ability to 4 understand more generally how people might read that, I think 5 that's a matter of argument, completely. 6 MR. FRASER BERRILL: Well, it's a matter of 7 argument, but -- but I'm asking the witness simply to 8 indicate -- 9 MADAM COMMISSIONER: Well, I guess I don't 10 want Mr. Power to be put in the position of having to feel 11 like he has to provide some kind of a legal opinion. 12 So, maybe what would be useful to find out is 13 first of all, what -- given Mr. Power wrote the RFQ, is what 14 he meant by costs associated with pick up and delivery and 15 what he was anticipating would come out of that, in terms of 16 what bidders might say -- 17 MR. FRASER BERRILL: Fair enough, 18 Commissioner. 19 THE WITNESS: Well, I think what we're asking 20 for here is any -- any costs that are not associated with 21 leasing, and some of the ones we have to think of are moving 22 the equipment around, whether it's to move it from one (1) 23 location to the other, or delivering it in the first place, 24 or shipping it back. That I believe was the intent of what 25 we were trying to get there.

67
  1  CONTINUED BY MR. FRASER BERRILL:
  2                 Q:  So, pick up and delivery was designed in
  3  your mind, to cover pick up and delivery at any time -- 
  4                 A:  Yes.
  5                 Q:  -- during the lease?  If, as was
  6  negotiated, and I'm going back to 102, and 16, what was
  7  negotiated was an obligation on the part of the City to
  8  return the equipment, and this is -- well, I'm talking about
  9  at the end of the lease.
 10                 And I think if you read the first two (2)
 11  lines, that that seems to have been the negotiated term
 12  between the City and MFP.  And I'll just read it into the
 13  record.
 14                   "The lessee shall, at the termination of an
 15                   equipment schedule, at its sole expense,
 16                   return the equipment to the lessor at such
 17                   location as shall be designated by the
 18                   lessor within Canada, in the same operating
 19                   order of repair and condition ..."
 20                 Et cetera.  
 21                 So that the response of MFP in not charging
 22  anything for pick up and delivery, in other words, the
 23  insertion of zero (0) dollars, is technically correct, would
 24  you say, because it was the obligation of the City to return
 25  the equipment and MFP wasn't going to charge the City

1 anything for that? 2 MADAM COMMISSIONER: I'm not quite 3 understanding. But it may be that what you're actually going 4 to is something that maybe Mr. Fecenko could answer, or maybe 5 it's argument, as opposed to putting it to this witness. I'm 6 not sure -- 7 MR. FRASER BERRILL: Well, perhaps it's 8 argument. My Friend, Mr. Moore, I think impliedly at least, 9 indicated or -- or tried to indicate that the obligation in 10 the return section was in fact a charge to the City, which 11 was different, if you will, from what the response to the RFQ 12 stated, and I'm merely -- 13 MADAM COMMISSIONER: Okay. 14 MR. FRASER BERRILL: -- trying through this 15 witness to make the point that -- 16 MADAM COMMISSIONER: Okay, maybe you could 17 just break down your question's a little. I'm having trouble 18 understanding the question myself. So, maybe I'm just 19 particular obtuse today, but -- 20 MR. FRASER BERRILL: Let me put it to you 21 then -- 22 MADAM COMMISSIONER: Mr. Power is smiling with 23 me, so I'm thinking he's responding the same way I am. 24 MR. FRASER BERRILL: I have -- I have perhaps 25 entered into this issue --

1 MADAM COMMISSIONER: Okay. 2 MR. FRASER BERRILL: -- awkwardly. 3 4 CONTINUED BY MR. FRASER BERRILL: 5 Q: But when one reads Section 16, the return 6 of equipment, Mr. Power, is MFP in a position at that point 7 in time to charge anything for the return of equipment, on 8 your understanding of that clause? 9 MADAM COMMISSIONER: Do you mean at the time 10 that the master lease is signed, are they in a -- 11 MR. FRASER BERRILL: No, at the time the 12 equipment is returned. 13 MADAM COMMISSIONER: Oh, okay, so will they, 14 being MFP -- 15 16 CONTINUED BY MR. FRASER BERRILL: 17 Q: Will they be in a position to charge 18 anything, if the City of Toronto returns the equipment as is 19 the obligation in paragraph 16, is MFP in a position to 20 charge anything for it? 21 A: No. 22 Q: Now, I just want to move to one (1) other 23 section in the master lease, and -- and that's something Mr. 24 Moore took you to with respect to supercede versus precede, 25 as I understand it. And that's at Tab 1, in your book of

1 documents, Volume 1. 2 3 (BRIEF PAUSE) 4 5 Q: And I should have, before you closed the 6 book, asked you to keep your finger on Tab 102, which is in 7 fact the master lease, as -- as signed, as I understand it. 8 And Tab 1 is Begdoc 3675. 9 10 (BRIEF PAUSE) 11 12 Q: And -- and I just wanted to clear up one 13 (1) point, I'm not sure that it's particularly relevant, but 14 as I understand it what Mr. Fecenko was advising you to do at 15 that point in time was to make sure that Exhibits 1 and 2, 16 which I understand were the RFQ and the response, were not 17 superceded by the rest of the agreements. 18 And I think the point that Mr. Moore brought 19 across was that in fact it worked the other way, that the RFQ 20 and the response to the RFQ were in precedents, if you will, 21 to the contractual documents. 22 Was -- was that your understanding or am I -- 23 MADAM COMMISSIONER: If you don't understand 24 the question, Mr. Power, just let -- 25 THE WITNESS: Yeah, I'm just --

1 MADAM COMMISSIONER: -- us know. 2 THE WITNESS: -- I'm just trying to go through 3 it again. 4 I have to go back and see how it read back 5 here. What page in the master document does this refer to? 6 7 CONTINUED BY MR. FRASER BERRILL: 8 Q: In the master document it's -- 9 MR. GORDON CAPERN: It's paragraph 26, page -- 10 MR. FRASER BERRILL: Paragraph -- thank you, 11 Mr. Capern. 12 13 CONTINUED BY MR. FRASER BERRILL: 14 Q: Let me, for the sake of time, and because 15 I'm not sure a great deal turns on the interpretation of the 16 contract, and which has precedence, and which does not. But, 17 as I understand it, Mr. Power, and -- and perhaps you can 18 just confirm that it accords with your understanding or not, 19 or whether or not you don't understand the issue, because it 20 is a somewhat arcane and legal one (1), but I think it's on 21 the record incorrectly. 22 That what Mr. Fecenko was trying to say was 23 that the contract documents should not supercede the RFQ and 24 response, but should be read -- where there's an 25 inconsistency among the documents, should be read in priority

1 to the RFQ and response. 2 A: Right. 3 Q: And as I understand it, Mr. Moore might 4 have put it to you the other way yesterday. But the point is 5 that the advice that Mr. Fecenko gave you, in fact found its 6 way into the master lease, and that what we have is a 7 precedence clause, if you will? 8 A: Yes. 9 Q: All right. Now, I -- I just want to point 10 out for the record, and I -- I don't want to mislead the -- 11 the Commission here, there appears to have been some error 12 perhaps, because the language, Madam Commissioner, with 13 respect to superceding didn't appear to get deleted, so 14 there's a conflict. 15 We have Mr. Fecenko's wording, and then we 16 have a clause following -- a sentence following, which refers 17 to a superceding, if you will, of Exhibit 1 and 2, by the 18 program agreement. 19 So, I'm just pointing that out for the record. 20 MR. PATRICK MOORE: Just so the record's 21 clear, I don't mean to interrupt My Friend, but it may be 22 well to look at the draft of the master lease in this 23 connection, and not at the final form. 24 And you'll recall that the draft is found at 25 Tab 27 of Book 1, Document 11126, and the operative page for

1 this purpose would be at 11132, and you'll see at the top of 2 the page a header saying, from Fasken Martin -- I can't make 3 it all out. 4 So, it appears that that page and that draft 5 may have come from Mr. Fecenko, and he'll come and we'll have 6 an opportunity to talk to him. 7 MADAM COMMISSIONER: Okay. All right. 8 9 CONTINUED BY MR. FRASER BERRILL: 10 Q: I want to move from that to a discussion 11 at the -- 12 MR. FRASER BERRILL: Well, it's 11:30, 13 Commissioner, I -- I expect -- 14 MADAM COMMISSIONER: You have worn me out 15 already, Mr. Berrill. 16 MR. FRASER BERRILL: I'm sorry, I'm trying to 17 move as fast as I possibly can. 18 MADAM COMMISSIONER: Okay. 19 MR. FRASER BERRILL: I do expect that -- that 20 but for the break, I would have finished by twelve o'clock, I 21 meant two (2) hours when I said twelve o'clock, I didn't work 22 into my calculations, the break. 23 MADAM COMMISSIONER: Okay. 24 MR. FRASER BERRILL: So, I would say twenty 25 (20) after 12:00 I should be finished.

1 MADAM COMMISSIONER: All right, thank you, 2 we'll break until ten (10) to. 3 THE REGISTRAR: Order. The Inquiry will 4 recess until ten (10) to 12:00. 5 6 --- Upon recessing at 11:30 a.m. 7 --- Upon resuming at 11:50 a.m. 8 9 THE REGISTRAR: The Inquiry will resume. 10 Please be seated. 11 12 (BRIEF PAUSE) 13 14 MADAM COMMISSIONER: Okay. 15 16 CONTINUED BY MR. FRASER BERRILL: 17 Q: I want to turn, Mr. Power, to the issue of 18 the Contract Management Office, and I really just want to 19 focus in my questions really on what I understand to be the 20 central issue of the Inquiry, and that is how, apparently, 21 Counsel thought that we were only leasing $43 million and how 22 it became much more than that, 85. And my questions are 23 solely directed to that. 24 You drew on, and -- and the people setting up 25 the Contract Management Office, drew on expertise from

1 purchasing and finance, and the areas that they would be 2 responsible for, insofar as running your program was 3 concerned? 4 A: Yes. 5 Q: Was there anyone else that they suggested 6 during the piece, or that anyone suggested, should be 7 consulted in how you set up this Contract Management Office? 8 Were the bases covered when you included that group? 9 A: No, I -- I think we included, while the 10 process was being designed, we worked with MFP administration 11 people on -- on that as well to try and get the whole group 12 created right from the acquisition of the goods through the 13 final invoices from MFP. 14 I cant think of anybody else. 15 Q: Okay. Was there a process, that you 16 understand, that would tie back the amount that the Contract 17 Management Office had to administer from time to time, or was 18 in your view, the Contract Management Office just a vehicle 19 for processing purchases for -- from where ever they came 20 from and for whatever amount? 21 A: It would be the latter, provided the 22 incoming information was appropriately approved. 23 Q: Who would have been responsible for 24 monitoring the amount that was spent by the Contract 25 Management Office; and I'm talking either by way of

1 acquisition, or by way of leasing? 2 A: I guess Kathryn Bulko had the 3 responsibility for it, I guess. I'm not sure who actually 4 collected the information. 5 Q: Was that in her capacity as a Contract 6 Management Office person, if you will, or -- 7 A: Yes, yes. 8 Q: And how much was being managed by the 9 Contract Management Office at any given time? In other 10 words, did you have a concept of what the maximum amount was 11 that you had authority to spend or put on lease? 12 A: Not that I recall. 13 Q: You say not that you recall. You knew at 14 one point in time or you've never known? 15 A: I might have known at some point in time 16 but it wasn't something that I was monitoring or particularly 17 interested in. 18 Q: Did you ever tell MFP that amount or was 19 MFP ever brought into that loop, from your understanding, 20 about how much was there to be spent? 21 A: No, I don't -- I don't think it worked 22 that way. I think the involvement with MFP was -- was 23 advising of the dollar value of the acquisitions coming 24 through the pipe and what it would look like at the end 25 since, you know, transaction by transaction basis.

1 MR. BRYAN McPHADDEN: I think there may have 2 been a difficulty with the phrasing of the question. Mr. 3 Power was asked what the maximum amount was and as though 4 there was a set limit as opposed to what was the maximum 5 amount it ever processed. I think that may not be clear. 6 MADAM COMMISSIONER: Did you have trouble 7 understanding the question, Mr. Power? 8 9 CONTINUED BY MR. FRASER BERRILL: 10 Q: What was -- what the question was designed 11 to get at was whether or not there was ever a consciousness 12 on the part of you or anyone at the CMO, and whether or not 13 that was communicated to MFP about an upper-side limit that 14 the CMO was monitoring. 15 A: Yeah, that's the way I understood the 16 question. No, there wasn't to my knowledge. 17 Q: I'm going to refer you to two (2) tabs 18 that seem to relate to the issue about how much was being 19 monitored -- or rather, spent by the CMO. The first one is 20 Tab 11. 21 MADAM COMMISSIONER: Is that Volume 1? 22 MR. FRASER BERRILL: That's Volume 1. Oh, 23 sorry. Volume -- hmm. It's Tab 3, Volume 1, yes. 24 MADAM COMMISSIONER: Tab 3. 25

1 (BRIEF PAUSE) 2 3 MADAM COMMISSIONER: About a power unit? 4 MR. FRASER BERRILL: No. No, it's not. 5 6 (BRIEF PAUSE) 7 8 MR. FRASER BERRILL: I'm looking for -- well, 9 I'm first going to refer you to ... 10 11 (BRIEF PAUSE) 12 13 MR. FRASER BERRILL: Tab 86, Page 2. I'm 14 sorry. 15 MADAM COMMISSIONER: That's 15643. Is that -- 16 MR. FRASER BERRILL: That's correct. 17 18 CONTINUED BY MR. FRASER BERRILL: 19 Q: Now, this was your action plan and it 20 involved -- and I really only want to refer to the fact or 21 the assumption -- the last of the assumptions that in March 22 of every year I&T will provide a projected estimate and that 23 in November, I&T will provide the actual and my question is 24 whether or not that was ever done for the Contract Management 25 Office so that they would know at any point in time what was,

1 in fact, spent? 2 A: I don't know if it had been done or not. 3 Q: In any event, that was your recommendation 4 and we'll find out from other witnesses whether or not that 5 happened. 6 A: Yes. 7 Q: Was it your general understanding that 8 Purchasing was to monitor from time to time, the amount that 9 was spent in conjunction, and that Kathryn Bulko would let 10 them know or what was their role in the process? 11 A: Well, they were part of the -- of the 12 cycle of getting it done and I was assuming they would keep 13 their own records as to what they would be acquiring. 14 Q: Okay, I want to refer you to Tab 111 and 15 the chart that's indicated there at -- sorry, Tab 11 is 16 Begdoc 31625 and I want you to go into Page 4 at 31628. 17 And this was one (1) of the November 4 drafts 18 of the CMO charter, if you will, I like to call it, at least 19 the way in which they wanted to set themselves up and 20 organize their operation systems. 21 And I see the role of purchasing or the 22 responsibility, and I assume, that's what RSP in column two 23 (2), the top of column two (2) refers to, responsibility? 24 A: Yes. 25 Q: And the ITPR forms under one (1), the ITPR

1 forms and the ITLA forms, which is the leasing authority 2 forms, were to be sent to both the CMO and to purchasing? 3 A: Yes. 4 Q: Now, what was purchasing supposed to do 5 with them? Do you recall under this scenario? Were they 6 just to file them or were they to add them up from time to 7 time or make sure that they were completed correctly, or what 8 was their responsibility? 9 A: Well, purchasing from time to time, was 10 expected to purchase or make the purchasing arrangements for 11 these transactions. And through their purchase order system, 12 as I understood it, would determine whether or not the 13 funding was available -- available for the requesting 14 department before the transactions went ahead. 15 Q: But, it also refers to the leasing 16 authority form, the ITLA, they were supposed to get a copy of 17 that. And that was with respect to an item that, instead of 18 being purchased, would go on a lease? 19 And I wonder what their responsibility with 20 respect to that was? 21 A: Well, it was still purchased before it 22 went on a lease. It was acquired through some vendor, 23 whether IBM or Dell or somebody else. 24 Q: I'm just going to interrupt you there 25 briefly. I thought the understanding was that it was to be

1 purchased by MFP and then put on a lease? That the invoices 2 were, in fact, sent to MFP and then MFP would send a 3 certificate of acceptance, asking the City to acknowledge 4 that the equipment had been received in good working order? 5 A: Yes, but, the vendor was engaged prior to 6 that. Like the selection of equipment and pricing, those 7 kinds of things had been arranged in advance prior to the 8 final aspect of it being -- the invoice going to MFP and then 9 we accepting that MFP had done that, and then the vendor had 10 been paid, would close out the loop. 11 Q: Was purchasing responsible to match up 12 then the ITPR with the ITLA and make sure that they jived, 13 was that then their responsibility? 14 A: I think so. It's a long ways back for my 15 memory -- 16 Q: Yes -- 17 A: -- I can't recall exactly the process -- 18 Q: Well, then I -- I don't want to dig down 19 into it too far, but I want to refer you to item 2(a) where 20 it talks about specific responsibility of purchasing, that is 21 to approve the funding and authorize the vendor and selection 22 process. 23 A: Yes. 24 Q: Now, what I understand approved the 25 funding, that would -- that would be to make sure that there

1 were funds available in the budget and that there was 2 authority to make the purchase or in this case, the lease. 3 Was that your understanding of what the system 4 was supposed to do? 5 A: Yes. 6 Q: Was that your understanding of the way, in 7 fact, it worked? That purchasing would add up from time to 8 time, the amounts that were put on lease and would know at 9 any given time, what the amount was? 10 A: Well, at this stage, it wasn't on lease. 11 You know, if a department wanted twenty (20) desktops, it 12 would go through this process, purchasing, in its part of the 13 cycle would determine whether the funding was there and 14 whether the acquisition method was in accordance with the 15 City's policies. And at that point they would sign off on 16 it. 17 Q: I think I understand your answer, but I'm 18 not exactly certain that that pins down in your mind, at 19 least, where the responsibility was for monitoring at any 20 point in time, how much was on lease? 21 A: I think the monitoring for how much was on 22 lease would be CMO's office. 23 Q: And was it the CMO's responsibility to 24 determine whether or not the amount on lease was up to any 25 given cap or amount or that was somebody else's

1 responsibility? Or did that just fall through the cracks? 2 A: I don't -- you might have to ask somebody 3 else who is more familiar with the operation of that, than I. 4 I don't believe they were working with a cap. I think the 5 departments were working with their budget caps. 6 Q: I understand that the budget caps were for 7 the acquisition of items, but not necessarily a budget cap 8 for the amount that would go on a lease? 9 A: Well, they were told at the outset they 10 were given a calculation of what the lease for that 11 acquisition would be over the term of the lease. So, they -- 12 they would have that number. 13 Q: So, they would then translate that, if you 14 will, into the amount of equipment that was, in fact, 15 acquired, like the total cost of the equipment that was 16 acquired? Or they would be only responsible for budgeting 17 the amount of the operating lease? 18 A: They would be accountable for the 19 operating lease. 20 Q: Only, and not the value of the equipment 21 being leased? 22 A: That's right. 23 Q: And it's the amount of the value of the 24 equipment being leased that seems to be the issue in this 25 Inquiry? And I'm just --

1 A: Well I -- 2 Q: -- wondering who was monitoring that 3 figure? 4 A: Well the department would have to be. 5 They'd be responsible for the operating dollar value of the 6 lease and also for the full value of the lease. Like it 7 would be their responsibility -- budget responsibility for 8 the term of the lease, which could equate to the total value 9 of the purchase. 10 Q: Very good. 11 12 (BRIEF PAUSE) 13 14 Q: During the time that the CMO was being set 15 up, I suggest to you that there was some pressure that people 16 were under to get things running -- up and running quickly? 17 And in that context, I just want to refer you 18 briefly to Tab 25 in Volume 3. 19 20 (BRIEF PAUSE) 21 22 Q: And this is a memo at the end of October, 23 just about the time that we're talking about the settling the 24 terms of the CMO and how it will operate -- 25 MADAM COMMISSIONER: And --

1 MR. FRASER BERRILL: Begdoc 14237. It's Tab 2 27 in Volume 3. 3 MADAM COMMISSIONER: Okay. 4 MR. FRASER BERRILL: Sorry, Tab 25 in Volume 5 3. I apologize. 6 MADAM COMMISSIONER: Volume 3, okay. I didn't 7 get the Volume 3 part. 8 9 (BRIEF PAUSE) 10 11 MADAM COMMISSIONER: Okay. 12 13 CONTINUED BY MR. FRASER BERRILL: 14 Q: And I just want to refer you to Marg 15 Doner, who I understand was a -- was she a Commissioner, or 16 was she a department head, or do you recall? 17 A: Marg Doner was one (1) of the project 18 managers within the IT Department. 19 Q: And she says at the bottom: 20 "I know that the computer monitors for the 21 AOCC are now going through the leasing 22 company, which is fine. We have the 23 dollars from the business case to pay. 24 Line has been handling the trans questions 25 -- transfer. My main question is [and then

1 in caps] WHERE'S THE EQUIPMENT ESPECIALLY 2 THE MEDIA EQUIPMENT -- 3 MADAM COMMISSIONER: It -- it doesn't say 4 equipment. 5 MR. FRASER BERRILL: Sorry -- 6 MADAM COMMISSIONER: It just says media. 7 8 CONTINUED BY MR. FRASER BERRILL: 9 Q: "-- MEDIA WE ORDERED. Jerry needs this 10 stuff. We will have three (3) consultants 11 with nothing to do. Line knows about the 12 payment transfers ..." 13 Et cetera. And the rest speaks for itself. 14 My suggestion to you, at about that time there was some 15 pressure on the CMO to -- to get up and running and get -- 16 get producing? 17 A: I would think so, yes. 18 Q: And there was pressure as well, not only 19 from the purchasers of this equipment, but from the vendors. 20 And I'm referring you to Tab 29, in Volume 3, and that's 21 Begdoc 23257. 22 And it talks about the vendors: 23 "...are very confused and frustrating at 24 the billing process, unsure of what is 25 being leased and what is purchased.

1 Therefore, invoices are not being paid 2 timely. MFP can't risk being put on credit 3 hold, how can the vendors qualify who to 4 bill." 5 And: 6 "The lease reconciliation process is 7 extremely slow, the administration to 8 review and qualify all invoices is 9 extensive." 10 So, I assume that -- that this was all not 11 happening as quickly as had been hoped. And I'm wondering if 12 that had anything to do with why this September 30, 13 Commissioners letter was not rolled out because you weren't 14 ready to embrace all of this business, or the CMO was not, 15 rather? 16 A: It -- it could be. I wouldn't ... 17 Q: But you -- you will tell us that there was 18 some pressure to -- 19 A: Oh, very definitely. It's -- it didn't 20 get onto the books quite as smoothly as we'd anticipated, 21 yeah. 22 Q: And as a result, the CMO might not have 23 been set up quite as ideally as it might be in a perfect 24 world had there not been this pressure? 25 A: That's fair.

1 Q: I just want to touch briefly on the 2 Solicitor Opinion issue, and ask you, Mr. Power, from your 3 experience in leasing, is it normal to get solicitor's 4 opinions to support the payment, or rather, the assignment of 5 these leases downstream to financial institutions or 6 securitization vehicles? 7 A: Well, I hadn't seen one before. 8 MADAM COMMISSIONER: Had not? 9 THE WITNESS: I had not seen one. 10 MADAM COMMISSIONER: Okay. 11