Council Meeting: November 28, 1995       Santa Monica, California

TO:       Mayor and City Council

FROM:     City Staff

SUBJECT:  Recommendation to Authorize the City Manager to
          negotiate and execute a contract with Peoplesoft, Inc.
          for a human resources and payroll computer system.


INTRODUCTION
This report recommends that the City Council authorize the City
Manager to negotiate and execute a contract with  Peoplesoft,
Inc. for an automated human resources and payroll computer
system.  This system will replace the city's current automated
payroll system.

BACKGROUND
The city's current payroll system is an outdated collection of
programs written in several different languages. The core of the
system is more than twenty years old. This system is difficult to
maintain because of the outdated programming languages and file
structures that it uses.

Some features requested by the Personnel or Finance Departments
cannot be implemented with the current system.  For example: the
current system limits us to 100 different pay codes; Personnel
would like to have many more than that available to them. It
lacks the flexibility to easily incorporate changes mandated by
the state or federal governments. An example is the inability to
designate a particular pay code subject to certain taxes and not
others.  Some functions must now be performed outside the system,
requiring extra work to transfer and manipulate the data, such as
the reporting for the Fair Labor Standards Act (FLSA), which must
be calculated with a spreadsheet outside the payroll system.

Lastly, the current payroll system programs will not run on our
newer computer equipment, which forces us to keep and maintain
expensive, old computers as long as we are running the current
payroll system.

DISCUSSION
A Payroll RFP Committee of twelve people was formed with staff
from the Information Systems Division and the Personnel and
Finance Departments. The committee began a search for a
replacement for the current payroll system by writing
specifications that were issued in an RFP.  Bids were received
from ten different vendors. Four of these bids were selected for
further consideration. These proposals were examined in detail
and the vendors presented demonstrations of their software.
Customers were contacted and surveyed as to their experiences and
satisfaction with the system. Peoplesoft, Inc. was selected as
the vendor with the system that best fit the specifications and
requirements. Peoplesoft is the industry leader in sales of human
resources and payroll systems utilizing modern computer
techniques and systems.

Peoplesoft will deliver and install the software for the system.
They will configure the system with test data and demonstrate its
operation. Training of city staff will be provided by Peoplesoft
at their training facility. Peoplesoft will assist city staff in
the configuration of the software to meet our processing and
record keeping requirements. They will consult with city staff
regarding the conversion of our existing data to the new system.
They will assist in the testing of the system with our employees'
data.  The new system will be operational by January 1997.

BUDGET/FINANCIAL IMPACT
The cost of the system is $285,000 which is budgeted at account #
01-710-223-20096-8900-99501.

RECOMMENDATION
It is recommended that Council authorize the City Manager to
negotiate and execute a contract with  Peoplesoft, Inc. for the
purchase of an automated human resources and payroll system for 
$285,000.

Prepared by:   Jeff Miller, Systems Development Supervisor,
               Information Systems Division.