Luzerne County Manager C. David Pedri’s request for an additional $150,000 to fund a new employee payroll processing system prompted strong criticism this week from Councilwoman Linda McClosky Houck.
Signed by Pedri, the contract with human resources management company ADP took effect last June and runs through June 1, 2018, according to county records.
A contract “of this magnitude” should have come before council for its approval, particularly because it would require funding in 2018, McClosky Houck told her council colleagues during Tuesday’s work session.
The county’s home rule charter says the manager must obtain council approval for contracts costing $25,000 in any future calendar year for which no budget has been adopted.
When that concern was raised last June, county Chief Solicitor Romilda Crocamo said she was confident the contract complied with the charter because the county was not locked into an obligation to keep ADP if the expenditure was not funded by council in 2018.
A council majority ended up voting to remove a requested ADP project earmark from the 2018 budget while leaving the door open to possible funding from the budget reserve at a later date.
However, the administration already paid the initial $175,000 implementation invoice last year using funds that had been earmarked for a payroll project, the council agenda said.
The administration said the requested $150,000 would cover implementation-related travel and expenses, a charge for each employee added to the payroll system, service costs and assistance with W-2 preparation, the agenda said.
McClosky Houck also argued the contract gives ADP work that is currently handled by county employees and should continue to be performed in-house. No employees will be furloughed because the administration said impacted staffers already are busy and should be freed up to focus on other assignments.
“It is also outsourcing, and the worst kind of outsourcing because it did not result in cost savings. It is an additional cost to do this,” she said, asking Pedri if he will be seeking council approval for the ADP contract renewal.
Pedri, who disagreed with the outsourcing terminology, said he did not start negotiating the next contract but has no issues seeking council approval.
“Well you had an issue with this one coming before council. That’s why I asked,” she replied.
The manager said he thought council would be on board when he signed the initial contract because council had allocated funds in the 2017 budget to “do something with payroll.”
“We talked about doing something with payroll. County management did something with payroll. County council said, ‘I can’t believe you did something with payroll.’ So it was kind of a surprise to me,” he said.
Pedri and county Budget/Finance Division Head Brian Swetz said the ADP contract will provide employees with instant online access to payroll records, including the amount of sick and vacation time they have used and remaining.
The conversion also will correct an out-of-sync payroll schedule that prepays 40 percent of the county’s 1,400 employees for time they have not yet worked. This payroll schedule problem has been identified as an issue that must be corrected for at least a decade, in part because errors for advance-pay employees must be corrected after the fact.
June 30 is the target deadline to shift all employees to one payroll cycle and start using the ADP system, Swetz said.
After verifying the project will increase county spending, Councilwoman Sheila Saidman asked what impacted employees will be doing with the free time.
Swetz said the payroll coordinator will handle other assignments and continue processing payroll data needed to keep the ADP information current. He said he and other budget/finance employees spend more time than warranted on W-2s and related reports because they are not tax specialists.
Pedri said budget/finance staffers routinely stay late and are “never waiting for something to do.”
“There is more than enough work to do in budget and finance,” he said, noting the county relies on outside companies to assist in other areas.
McClosky Houck said county employees are managing to complete the work now. County council may vote on the allocation March 13.
“I’m sure it’s a good company,” she said of ADP. “It’s the fact that it’s an additional cost to the county to do the work that’s already done by the county.”
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.