SR 12-18-2018 3N
City Council
Report
City Council Meeting: December 18, 2018
Agenda Item: 3.N
1 of 4
To: Mayor and City Council
From: Joseph Cevetello, Chief Information Officer, Information Services Department
Gigi Decavalles-Hughes, Director, Finance Department
Subject: Modifications to Agreements with Kronos, the City's Payroll System
Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to negotiate and execute a fifth modification to Sales
Agreement and Software License Agreement #8417 (CCS) in the amount of
$143,505 with Kronos, Inc., a Massachusetts-based company, for upgrade
services, training, and hardware for Kronos, the City’s electronic timekeeping
system. This would result in an 18-year amended agreement with a new total
amount not to exceed $608,684, with future year funding contingent on Council
budget approval;
2. Authorize the City Manager to negotiate and execute a fourth modification to
Software Maintenance and Support Agreement #8434 (CCS) in the amount of
$647,791 (including $50,000 in contingency) over five-years with Kronos, Inc., for
Software as a Service (SaaS) licenses. This would result in an 18-year amended
agreement with a new total amount is not to exceed $1,850,445 with future year
funding contingent on Council budget approval; and,
3. Authorize budget changes as outlined in the Financial Impacts & Budget Actions
section of this report.
Summary
The City uses a payroll system, including software and hardware, from Kronos, Inc.
(Kronos) for electronic timekeeping and attendance record processing. On January 26,
2018, Council approved a fourth modification to agreement #8417 (CCS) to upgrade the
system to integrate and maintain functionally with Tyler Munis (Tyler), the City’s new
financial system. There are several configuration changes still required to automate the
transferring of employee time worked into Tyler. In order to accomplish these changes,
an upgrade to the latest version of Kronos is necessary as it contains enhanced
features, which will automate and simplify the unique labor laws and rules around
processing of specialized work schedules, such as the 9/80 work schedule. Without
these advanced features, which are available in the most recent version of Kronos,
2 of 4
some employee time data will need to be calculated manually, which is not cost
effective and is significantly prone to data entry errors. In addition to upgrading to the
latest version of Kronos, the City is purchasing new hardware, training services, and
also taking the opportunity to move the current City-hosted, on-premise, software
solution to a Vendor-hosted, “cloud” software solution model.
Discussion
Many cities employ a 9/80 workforce in order to meet AQMD requirements. The
department of labor overtime rules make the 9/80 work schedule very cumbersome to
manage from the payroll perspective. Kronos now has many clients that utilize a 9/80
work schedule and have responded by building in additional functionality that will help to
automate the overtime calculations surrounding these schedules. To leverage this new
functionality, an upgrade of Kronos and related training services are required. In
addition, in order to allow Tyler to automate the calculations required for compliance
with Fair Labor Standards Act (FLSA) overtime regulations, there are additional rule
configurations needed in Kronos so that data can be transferred in a manner which is
easily consumable by Tyler.
As part of the upgrade, the City will also transition our City-hosted, on-premise Kronos
system to a Vendor-hosted, cloud-based, or Software as a Service (SaaS) solution
model. By moving to this model, Kronos will become responsible for performing all
future upgrades to the software -- the City will no longer need to pay for upgrade
services; Kronos will be responsible for maintaining and upgrading the infrastructure
that hosts the software; the City will stay more up-to-date on the software and leverage
new functionality as it becomes available; and, this model will enable for a more robust,
redundant, and full software feature set, as well as streamline and improve the City’s
upgrade process for this tool. Staff also recommends purchasing new hardware to
ensure that the entire system is remains current.
In 2014, staff evaluated alternatives for payroll systems during the RFP process for
Tyler. However, none of the systems that were evaluated had the robust functionality of
Kronos and did not integrate to allow for attendance data and scheduled time worked to
be transferred into the City’s financial system. Staff recommends moving forward with
3 of 4
the upgrade services and to convert the City’s current annual maintenance and support
services model with Kronos to a Software as a Service (SaaS) model.
Past Council Actions
Meeting Date Description
12/15/98 (Attachment A) Recommendation to Authorize the City Manager to
Negotiate and Execute a Contract to Purchase a Police
Timekeeping and Attendance System from Kronos, Inc.
01/26/16 (Attachment B) Fourth Modification to Agreement #8417 (CCS) with
Kronos, Inc. for software licensing and upgrade services
and Third Modification to Agreement #8434 (CCS) with
Kronos, Inc., for software maintenance and support
services
Financial Impacts and Budget Actions
Staff seeks authority to increase the amount of contracts #8417 and #8434 with Kronos
for upgrade and training services, and hardware purchases to the City’s time and
attendance keeping system.
FY 2018-2019 Budget Changes
Release Funds Appropriate Funds
Account Number(s) Amount Account Number(s) Amount
01.380246 $143,505 C0106420.689000 $143,505
Modification Requests
Agreement #
Current
Authorized
Amount
Modified
Request
Amount
FY 2018-19
CIP Account #
Total Revised
Contract Amount
8417 (CCS) $465,179 $143,505 C0106420.689000 $608,684
4 of 4
Agreement #
Current
Authorized
Amount
Modified
Request
Amount
Total
Revised
Contract
Amount
FY 2018-19 CIP
Account #
FY 2018-19
Amount
8434 (CCS) $1,202,653 $116,217 01180001.529230 $23,244
$18,339 54500002.529080 $3,668
$463,236 01300001.529230 $92,648
$1,850,445
Future year funding is contingent on Council budget approval.
Prepared By: Oscar Santiago, Administrative Services Officer
Approved
Forwarded to Council
Attachments:
A. December 15, 1998 Staff Report (Web Link)
B. January 26, 2016 Staff Report (Web Link)
C. OAKS INITIATIVE FORM - Kronos
REFERENCE:
Modified Agreement
No. 8417
(CCS)
&
Modified Agreement
No. 8434
(CCS)