City Council
Report
City Council Meeting: March 14, 2023
Agenda Item: 5.J
1 of 3
To: Mayor and City Council
From: Lori Gentles, Chief People Officer, Human Resources Department Subject: Approval of Revised Contract Amount for Benefit Administration Software with PlanSource for Human Resources Department
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect on the environment pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Authorize the Procurement Manager to increase the contract amount for the Human Resources Department with PlanSource for benefit administration software in an amount not to exceed $336,000, which covers an overage on the previous Council budget authorization and covers future services until the anticipated end of the contract on July 1, 2023.
Summary
To provide streamlined, automated, and easily accessible employee benefit-related transactions and to remain compliant with the reporting regulations of the Affordable Care Act (“ACA”), the City utilizes a benefits administration system, currently provided by PlanSource Benefits Administration, Inc. (“PlanSource”). On September 28, 2021, Alight-Hodges-Mace, LLC (“Alight”) was awarded a City Council approved contract to provide the City a new benefit administration system with a not-to-exceed amount of $846,375 over five years. The implementation of this system has been delayed due to staffing shortages and technical challenges. No expenses have been incurred with Alight to date. Due to an under projection of costs and the delayed transition from PlanSource to Alight, City staff anticipates the City Council-approved spending authority 2 of 3
with PlanSource will be exceeded by $229,000 over the originally approved amount of $107,000 and are requesting a new not-to-exceed amount of $336,000.
Discussion
On November 24, 2020, City Council approved contract #11111 (CCS) with PlanSource for an amount not to exceed amount of $107,000 for a term of two years for Employee Benefit Administration Software. In 2021, staff completed a competitive request for proposal (RFP) process to identify a new long-term strategic partner to provide the City with a more robust, efficient, and integrated benefits administration system. On September 28, 2021, City Council approved contract #11190 (CCS) with a new vendor, Alight, to replace PlanSource, with a not to exceed amount of $846,375 over a five-year term. The City has not yet spent any of the $846,375 City Council authorized funds with Alight. However, the transition to the new vendor has been delayed due to staffing shortages and technical challenges and is anticipated to be completed by July 1, 2023.
Upon review of the City’s contract with PlanSource, staff identified the amount paid exceeded Council authorization caused by the delayed implementation and an under projection of the amount needed to cover the initial contract term. To ensure continuity of this vital service, staff seeks City Council authority to cover the overage on the previous Council budget authorization for PlanSource under contract #11111 (CCS) and to cover future services during this transition until the City provides advance notice to PlanSource to end the contract, with an anticipated end date of July 1, 2023.
Past Council Actions
Meeting Date Description
November 24, 2020
(attachment A)
Original bid and award of agreement with PlanSource for Benefit Administration Software
Environmental Review
The revised contract for benefit administration software would have no possibility of significant effect on the environment, and therefore, is exempt pursuant to Section 3 of 3
15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
Financial Impacts and Budget Actions
Staff seeks authority to approve an increase to the contract over the originally approved amount of $107,000 for PlanSource Benefits Administration, Inc. for benefit administration software. Staff will return to Council if specific budget actions are required in the future.
Contract
Request Amount FY 2022-23 Budget
Department/CIP Account #
Total Contract Amount
$229,000 01130004.529230 $336,000
Prepared By: Mark Brower, Deputy Director
Approved Forwarded to Council
Attachments:
A. 11/24/2020 PlanSource Staff Report
B. OAKS