City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 5.D
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To: Mayor and City Council
From: Christopher Smith, Acting Chief Information Officer, Information Services Department, Customer Experience and Support
Gigi Decavalles-Hughes, Director, Finance Department, Danny Alvarez, Fire Chief, Fire Department
Subject: Approval to Amend Agreement with Kronos, Inc. for Software-As-A-Service (SaaS) and Related Licenses
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Authorize the City Manager to combine existing Sales Agreement and Software License Agreement #8417 (CCS) and Software Maintenance and Support Agreement #8434 (CCS) into a single contract for 5 years that would result in a 23-year amended agreement with Kronos Inc. (Kronos), for Software as a Service (SaaS) and related licenses. This will result in a new grand total amount not to exceed $3,425,461 (including 5% in contingency) with future year funding contingent on Council budget approval.
Summary
The City uses Kronos Workforce Central, an electronic time-keeping system and attendance record processing system, for employee timekeeping and payroll processing. The Fire Department uses Kronos TeleStaff, an automated scheduling solution designed for public safety. TeleStaff optimizes the scheduling, communications, and deployment of public safety personnel and other critical resources. Staff would like to take advantage of a one-time $89,900 incentive to upgrade from the City’s current electronic time-keeping system, Kronos Workforce Central, to Kronos Dimensions.
Kronos Dimensions is a modern time-keeping system that would provide a unified 2 of 6
platform for both TeleStaff and Workforce Central. Staff also requests authority to purchase additional software services necessary to enhance custom integrations into Kronos Workforce Central, transition, add additional security protections, and combine the two existing contracts into one contract to streamline contract management.
Discussion
The City has used Kronos Workforce Central since 1998. Significant staff and financial resources have been dedicated to customize, integrate, and configure Kronos Workforce Central to support various work schedules and automate overtime calculations supporting a variety of City work schedules. Integration has been developed with the City’s current Financial and Human Resource Capital management system, Tyler Munis, to import employee information into Kronos Workforce Central and export time detail data from Kronos Workforce Central to Tyler Munis to streamline the payroll process.
The City also uses Kronos TeleStaff in the Fire Department to make scheduling and communication more efficient while ensuring 24x7 staffing, minimizing compliance risks, and controlling labor costs. Since implementing the TeleStaff solution, staff has worked with the vendor to customize Telestaff to implement requirements resulting from labor negotiations lending to a highly customized product that has improved public safety staff scheduling. Kronos will now incorporate both the Kronos Workforce Central and Telestaff modules into one single cloud-hosted solution called Dimensions.
On December 11, 2021, Kronos experienced a ransomware attack and entities all over the world could not process paychecks or access employee records until Kronos could restore their systems in January 2022. This required City staff to manually process all time-keeping functions including recording, approving, calculating, and exports of time data for payroll processing. In the aftermath, Kronos has recommended that all clients migrate to Dimensions and transition from the Kronos Private Cloud (currently utilized by the City) to the Google Cloud. By moving to Google Cloud, employee data is protected by including two-factor authentication and data encryption. The platform also offers a range of security monitoring and detection tools, as well as support for a wide 3 of 6
variety of security protocols and standards. This new secure platform will be more protective of sensitive payroll data.
Kronos has also announced the end-of life for Kronos Workforce Central product as of December 2025. At that time, the product will not be supported by Kronos and the City will not have a supported timekeeping system. The current maintenance and support agreement for Workforce Central also ends in December 2023. The upgrade requires a one-time service cost of $139,900, however Kronos has offered an incentive of $89,900, contingent upon the City approving a new contract by June 30, 2023. The one-time discounted amount to upgrade to Dimensions in FY 2023-24 is $50,000 plus a one-time Telestaff migration fee of $10,000. The City will pay an annual cost for the maintenance and support agreement of $151,634 in FY 2023-24 with no annual increase over the five-year agreement.
Vendor Selection
In 1998, Council authorized the purchase of a timekeeping and attendance system from Kronos, Inc. Kronos was selected after a competitive bidding process, which resulted in the evaluation of five vendors’ systems for their ability to meet the City’s needs. The Kronos system was selected because it offered the most robust database, extensive real-time reporting capabilities, a hardware and software platform that conforms to the City standards to ensure support by existing personnel and compatibility with other City systems and offered a turnkey solution with on-site and telephonic technical support and a local training facility.
In 2004, Council authorized the purchase of TeleStaff, an automated staff scheduling and notification system for the Fire Department. The system was selected after evaluating multiple vendors’ systems for their ability to be customized to fit the Fire Department’s complex call-out requirements, including accommodating for organization specific rules in a decision-making hierarchy to automatically notify staff-via phone and email with the details of their required attendance. In 2014, staff again evaluated employee timekeeping and attendance management systems during the RFP process for the new Enterprise Resource Planning system. However, none of the systems 4 of 6
evaluated had the robust functionality of the Kronos Workforce Central and Kronos TeleStaff systems and did not integrate attendance data and scheduled time worked into the City’s financial management system.
Staff recommends that the City create a new contract with Kronos to continue to provide software licenses and maintenance and support services on a sole source basis for the Workforce Central and TeleStaff products and to migrate to the integrated Dimensions products from Kronos Private Cloud to Google Cloud platform. The current software has undergone years of customization and therefore a proprietary system and Kronos is the only vendor that can provide maintenance and support for its software systems.
During the next 5 years, Staff commits to conducting a Request for Information to determine if other platforms can provide the same level of service and customization and, if so, a Request for Proposal will be issued.
Environmental Review
The contract modification is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The award contract is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The modification will allow the City to continue to utilize its electronic time-keeping and attendance record processing system. Therefore, it can be seen with certainty that the agreement would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Past Council Actions
Meeting Date Description
5/26/2005
(Attachment A)
Authorization to enter into an agreement with Kronos
08/25/2020
(Attachment B)
Sixth Modification to Agreement #8417 (CCS) with Kronos, Inc. 5 of 6
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund and the Resource Recovery and Recycling Fund to increase the total contract amount and consolidate the previous Contracts #8417 and #8434 with Kronos for time-keeping and public safety scheduling services. Funding will be included in the FY 2023-25 Proposed Biennial Budget. Future year funding is contingent on Council budget approval.
Contract Modification Request
Agreement
#
Current
Authorized
Amount
FY23-24
Modified
Request Amount
Future Years Total
Modified Request
Amount
Account Number Total Amount
8417 $642,912 Various $642,912
8434 $1,900,125 Various $1,900,125
New
$7,248 C0105200.689000 $7,248
$40,041 C0106420.689000 $40,041
$2,711 01300001.529230 $2,711
$34,731 $78,088 01190001.529230 $112,819
$112,258 $449,031 01300001.529230 $561,288
$27,345 $109,382 01180001.529230 $136,727
$4,318 $17,272 54500002.529080 $21,590
Total $2,543,037 $228,652 $653,772 $3,425,461
Prepared By: Sreekanth Maddali, Principal Business Process Technology Analyst.
Approved Forwarded to Council
Attachments:
A. Staff Report - 05/26/2005 (Web Link)
B. Staff Report - 12/15/98 (Web Link)
C. 2017 OAKS INITIATIVE FORM
D. 04 Executed Kronos_8434_Mod_5
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E. 04 Executed Kronos_8417_Mod_6