City Council Meeting - FINAL


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  7.E.       
Meeting Date: 09/15/2020  
From: Brandi Suda, Finance Director

Information
TITLE:
Consideration and Approval of Contract:  Cooperative Purchase Contract with Kronos Incorporated 
STAFF RECOMMENDED ACTION:

Approve a Cooperative Purchase Contract with Kronos Incorporated (Kronos) and the City of Flagstaff as procured through a cooperative purchase contract with Cobb County through Omnia Partners - Public Sector for payroll time entry software and implementation for an amount not to exceed $181,200.

Executive Summary:

The City currently administers payroll services for over between 800 and 1000 full-time and part-time employees per pay period. Automating the time entry associated with payroll administration simplifies labor-intensive timesheet tracking, data entry and approval processes. An automated time entry system also aids labor law compliance.

The proposed Cooperative Purchase Contract with Kronos will provide the City with payroll time entry software and implementation services. The contract is implementation services plus three years of annual service. It also includes no billing for service for first six months.

A payroll time entry software and system provides the City the following benefits:

  1. Provide employees the ability to enter their daily time worked electronically (and includes supervisor approval),
  2. Tracks accruals of paid time off leave,
  3. Ensures time entry compliance with federal and state laws as well as City policy,
  4. Assist supervisors schedule staff and managing time off requests
Financial Impact:
The total FY 2020-21 budget for this contract is $146,000 in the General Fund, Information Technology Division.  This funding should cover FY 2020-21, FY 2021-22 and FY 2022-23 expenses.  Additional funding in year 3 of the contract will need to be budgeted ongoing.
Policy Impact:
None.
Connection to PBB Key Community Priorities/Objectives & Regional Plan:
Priority Based Budget Key Community Priorities and Objectives
High Performing Governance
  • Enhance the organization's fiscal stability and increase efficiency and effectiveness
Has There Been Previous Council Decision on This:
In October 2016, City Council approved a contract with Krono's for time entry software. Unfortunately due to unforeseen circumstances, the City was not able to implement the software at that time.
Options and Alternatives:
  1. The City Council may approve this Cooperative Purchase Contract for time entry software and implementation.
  2. The City Council may decline to enter into this Cooperative Purchase Contract and direct staff to conduct a formal competitive solicitation.
  3. The City Council may decline to enter into this Cooperative Purchase Contract and continue with the city's current process.
Background/History:

The City of Flagstaff has a workforce of approximately 800 to 1,000 employees per pay period. One of the key requirements in managing the workforce is to accurately account for employees' time on and off of the job. This information is used for several purposes:
 

  1. Payroll – to ensure each employee is paid a fair and accurate pay.
  2. Time management – supervisors have to make sure staffing levels are consistent with job requirements and ensure over-time hours are kept to a minimum.
  3. Leave time management – employee leave time used must be accurately deducted.
  4. Compliance – the City has to adhere to City policy and federal and state laws.
  5. Cost accounting – labor costs have to be accurately distributed to the appropriate accounting units.
  6. Grant accounting – labor costs related to grants have to be accurately recorded and reported.

The City started automated time entry system implementation back in 2016.  Unfortunately, due to other more pressing software implementations and staff turnover, the City did not have the staff time and hours to implement the time entry software.  This new software we are now looking for Council approval for is the next generation of time entry software with Krono's.

The City of Flagstaff currently relies on a very manual and paper intensive process for time reporting. While some departments use Excel spreadsheets, many still record their time on paper timesheets with supporting over-time and leave approval forms. In response to the current inability to close the time-reporting process quickly enough to meet payroll deadlines, some departments are estimating time worked by employees and any estimates have to be reconciled the following pay period creating a duplication of effort. These paper forms are then passed to administrative staff for entry into the City's Naviline system for payroll processing. If forms are incomplete or appear inaccurate the appropriate supervisor is contacted to resolve the issue. Administrative staff then print and/or email the payroll reports to section heads and/or division directors for review and approval. Finally, the payroll reports are given to the payroll staff for final review of adherence to City policy. A major benefit of an automation of time entry is that the added efficiencies will allow staff to be more productive in their other duties. An automated system also makes the process consistent and limits the possibility of error that a manual system has.

Key Considerations:

This proposed contract includes Kronos providing implementation services to design and configure the system to match City policy and federal and state regulations. Kronos estimates that the implementation of the payroll time entry software will take 6 months to complete.

With this proposed payroll time entry software, employee will report hours electronically via a computer, cell phones and/or electronic timeclocks. Supervisors will then also review and approve hours electronically and the employee hours data will upload into the City's HR/Payroll system. In addition, employee vacation, sick, floating holiday, personal time, and paid time off accruals will be managed within the system and interface with City's Payroll system.

Kronos is compatible with existing City systems. The City's Fire Department currently utilizes TeleStaff for scheduling which is a Krono's product. As part of this implementation, we will be working to implement a full integration between these two systems.

Community Benefits and Considerations:

The community benefits include the reduction of the risk of payroll related liabilities and errors which can have penalties or other consequence.

Community Involvement:
Not applicable
Attachments
Agreement
Cooperative Contract
Exhibit A - Kronos Order Form
Exhibit B Agency Cooperative Agreement Contract
Exhibit B - Agency Amendment 1


    

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