TO:
VIA:
FROM:
DATE:
CITY COUNCIL
CITY ADMINISTRATOR
DIRECTOR OF FINANCE
MAY 2, 2023
Placentia City Council
AGENDA REPORT
SUBJECT: SOFTWARE AGREEMENT WITH KRONOS SAASHR, INC. FOR A
WORKFORCE MANAGEMENT SYSTEM
FISCAL
IMPACT: EXPENSE: $13,387 One-time implementation fee, $63,250 annual software license fee
BUDGETED: Human Resources 101523-6136
SUMMARY:
The City upgraded their legacy Enterprise Resource Planning (ERP) financial system in July 2022 after delays due to staff turnover spanning multiple fiscal years. The City did not implement a new ERP system, instead choosing to upgrade from an outdated, unsupported version to a more recent version of the software with the same vendor, Central Square. The new version was implemented with the understanding that it would modernize the City's processes, including online timekeeping, workflow for accounts payable and purchasing, an online employee benefit portal and help streamline interactions between human resources and payroll. Unfortunately, these functionalities have not worked as planned and as a result, the City has needed to contract with a third -party vendor to manage day-to-day payroll and Human Resources functions and troubleshoot errors within the Central Square software which arise consistently each pay period.
Staff from both the Finance and Human Resources departments have reviewed demonstrations from multiple timekeeping and human capital management systems and are recommending Kronos (aka UKG) software to enable the City to implement an electronic, web -based timekeeping system including leave and overtime requests, payroll, and a human resources module capable of managing various leaves, recruitment, benefits and training programs.
In accordance with the City's purchasing policy section 10D, staff is proposing to utilize a cooperative agreement competitively solicited through Omnia Partners.
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Approve the software agreement with Kronos SaasHR, Inc. for a workforce management system.
1.h.
May 2, 2023
City Council Agenda
May 2, 2023
2. Authorize the City Administrator and/or his designee to execute all the necessary documents in a form approved by the City Attorney.
STRATEGIC PLAN STATEMENT:
This item is consistent with the City Council approved 5 -Year Strategic Goal #8 to Improve City Governance but is not directly related to a specific objective.
DISCUSSION:
The City currently relies on outdated, paper based processes for payroll and human resources functions including employee timecards, overtime and leave requests, employee benefit and leave management, withholding changes as well as coordination of mandated citywide training. These processes are time-consuming, vulnerable to human error and are challenging to coordinate due to the complexity of work schedules, particularly for public safety employees.
The City's current Enterprise Resource Planning (ERP) system, Finance Enterprise, is currently used to process payroll and maintain employee records. However, this system does not have the capability for workflow for approvals of changes, allow employees to enter timecards electronically, make changes to their records such as address or withholding changes or view W2 or past paystubs online. In addition, Finance Enterprise is difficult to extract data from, is not user- friendly and consistently produces errors, particularly in payroll resulting in the need for the City to contract with a third -party consultant to make basic changes to the system such as the creation of new payroll codes or formatting reports to streamline reporting to outside agencies such as CaIPERS. This additional contract cost, in addition to the annual five (5%) increase in license fees for Finance Enterprise plus a one-time "inflation" charge of five (5%) — ten percent total for FY23/24- led to the City exploring options for a cost-effective system that would enable the City to achieve the level of modernity and efficiency the City is striving for.
Over recent months, Finance and Human Resources staff reviewed different software products for online timekeeping, payroll and human resources functions. Both teams agreed that UKG (formerly Kronos) would be the best tool for the City to modernize operations, save significant staff time and reduce the potential for human error. The UKG system offers many valuable features including the capability:
• For employees to submit and approve timecards electronically via app or web -based portal. • For employees to submit and approve leave and overtime requests electronically. • To process payroll in the UKG system with seamless integration of timekeeping data. • Allow employees to review pay stubs and W2 information through an employee portal. • Allow employees to modify personal information such as address changes, W4 adjustments and direct deposit changes directly through an employee portal. • Allow Human Resources to accurately track various leaves such as FMLA, Workers' Comp, long and short-term disability, etc. including ability for employees to upload letters from doctors and other correspondence.
• Allow employees to select benefits during open enrollment. • Allow Human Resources to manage training and recruitment programs more effectively.
City Council Agenda
May 2, 2023
Staff is recommending the procurement of the UKG Ready program through the OMNIA Cooperative Contract for timekeeping, payroll and human resources operations. Implementation of the software can take up to 120 days, with UKG providing technical support and expertise to implement the system and train City staff.
Once implementation is complete, Staff is also recommending the City issue an RFP for a new ERP system for financials only that would enable the city to modernize, implement workflows, reduce reliance on paper processes and take advantage of improved technology. Once a vendor is selected, it will take up to one-two years to implement the new system which would include cleaning data, migrating 2-3 years of historical data from the old system to the new, possibly rewriting the chart of accounts and training Staff on the new system. The schedule will be determined by availability of funding as well as the availability of Staff dedicated to the project and will be presented to City Council once funding is identified and a vendor has been selected.
Prepared by: Reviewed and approved:
Jenn(fer Lampman
Director of Finance
Reviewed 7d -op -proved:
Darin X rrula
City Administrator
Sek.tik
Ia Burnett
Director of Human Re urces
Attachments:
1. Software agreement with Kronos SaasHR, Inc.
2. Master Agreement with Cobb County Board of Commissioners