An additional $20.5 million will be added to 2025 budget to cover costs. Pictured: Hamilton City Hall. Photo Credit: City of Hamilton/X.
City of Hamilton staff presented a report at the Nov. 20 General Issues Committee that costs incurred so far in response to the municipality’s cyberattack recovery have now increased to $9.6 million.
The report states that the costs only represent those incurred as of Oct. 11, meaning that the city could see the total spend increase even more before the end of the year.
Staff also note that there may be additional invoices still to be received for some items and that those will be included in future reports.
The last report to Council regarding costs related to the cyberattack recovery was provided on Aug. 16 and covered costs incurred up to July 24.
At the time, the city said that $7.4 million had been spent on recovery.
That means an additional $2.2 million was spent over three months, from July to October.
Staff emphasize that the city is in the “Recovery, Restore and Rebuild / Transform Phase” in regards to their response and that the city is “building back stronger” with a “focus on the customer and employee experience, enterprise solutions, efficiency, and increasing resilience to protect against future incidents.”
A breakdown of costs incurred estimates that $2.45 million has been spent on the Response Phase which reportedly “related to the City’s efforts to protect systems and to provide services with as little disruption as possible in the initial period following the cybersecurity incident.”
Examples of costs incurred include the purchasing of additional storage server capacity and new uncompromised equipment such as printers and cell phones.
Next, the report says that about $2.84 million has been spent on the Recovery Phase and $2.02 million on the Restore Phase which include “activities related to the testing, restoration, and recovery of the various systems impacted.”
Staff note that future financial impacts are expected for those phases.
Finally, approximately $2.32 million has been spent on the Rebuild / Transform Phase which includes “rebuilding applications and data, redesigning to meet the needs of business areas and migration to future state infrastructure.”
Future financial impacts for that phase are also expected.
Broken down by cost category, staff say that about $7.01 million has been spent on external experts, $1.14 million on infrastructure, $1.10 million on staffing, and $361,551 on “other related costs.”
The city says that the costs incurred throughout the past year will be absorbed in the 2024 budget and reported to Council in future budget variance reports.
In addition to the $9.6 million spent by the city so far on the cyberattack response, The Hamilton Spectator broke the story that a $20.5 million budget “placeholder” for cybersecurity costs will be added to the 2025 budget forecast.
The city’s initial budget report, which was released a couple of weeks ago, already projected a preliminary increase for the 2025 net levy of $102.9 million, which would result in an average property tax increase of 6.9 per cent next year.
However, that budget report did not include cybersecurity-related costs.
It is unclear if the additional costs will result in an even higher tax increase next year.
Based in Hamilton, he reaches hundreds of thousands of people monthly on Facebook, Instagram, TikTok, and Twitter. He has been published in The Hamilton Spectator, Stoney Creek News, and Bay Observer. He has also been a segment host with Cable 14 Hamilton. In 2017, he received the Chancellor Full Tuition Scholarship from the University of Ottawa (BA, 2022). He has also received the Governor General’s Academic Medal. He formerly worked in a non-partisan role on Parliament Hill in Ottawa.
