A demonstration of the mobile app and other convenient features offered by human resources management company ADP didn’t sway Linda McClosky Houck during last week’s Luzerne County Council meeting.
The administration is seeking a $101,000-a-year payroll outsourcing contract, saying it will free up budget/finance staff to concentrate on other work that maximizes their expertise, such as improved financial statements and speedier closeout of prior-year reports.
“I get it. You have the nice bells and whistles that come along with this, but we’re also $300 million in debt,” McClosky Houck, a councilwoman, said in reference to the ADP package.
McClosky Houck said her colleagues must decide if it is prudent to lock in an additional expense that won’t yield savings to perform work currently handled by budget/finance. Council was warned the county is running out of “magic bullet” revenue windfalls during the manager’s “state of the county” address in February, she said.
“What happens when there are no more bullets left in that gun at the end of this year?” she said, questioning if council will be forced to confront a proposed real estate tax increase this fall.
County Budget/Finance Division Head Brian Swetz said he believes a specialist like ADP should be handling payroll processing and W-2 preparation.
“I’m trying to pick the best use of budget and finance staff — myself and the team — and that’s what this submittal is,” he said.
He had proposed three additional payroll staffers if council turns down the contract and opts to keep payroll in-house.
Swetz said he can do without both ADP and more workers if council is fine with his department’s current work output and scraps a project to correct a long out-of-sync payroll schedule that prepays 40 percent of the county’s more than 1,400 employees for time they have not yet worked.
“If you’re going to put this prepay on me, I’m going to need a solution,” he said, referring to the synchronization project.
ADP was paid an initial $175,000 implementation fee last year based on a contract approved by the county manager, officials have said. The company would be paid an estimated $110,000 for subsequent work performed to date if its services are terminated, the council agenda said.
“If we want to pay over $100,000 for the work that we had done up to now but still didn’t address the problem, we can do that too,” Swetz said during the emotionally charged exchange.
McClosky Houck said council never approved the initial hiring of ADP, even though the county’s home rule charter said the manager must obtain council approval for contracts or obligations costing $25,000 in any future calendar year for which no budget has been adopted.
County Manager C. David Pedri has said he proceeded because council members had publicly discussed and supported the plans, allocating $150,000 in the 2017 budget.
McClosky Houck said she listened to the audio recording of the 2017 budget discussion, and Pedri had indicated he was negotiating a contract and would present it to council members to see if they wanted to proceed.
“The next time we heard about this was after it was signed,” she said of the contract, emphasizing that any money spent or owed on the contract to date is “not going to be hung around council’s neck.” A consultant could have been hired for less to handle the prepay payroll project if help was needed, she said.
Pedri believes ADP should be retained to “move the county forward” and allow budget and finance to focus more on other fiscal issues, including reports he requested that were shelved due to other office requirements.
“I’m not re-litigating that over and over and over again,” he said of the question about his contract-signing authority. “It’s a valid contract. It’s a legal contract. Every contract that I’ve approved as county solicitor and every contract I’ve signed as county manager — none of them have ever been challenged in a court of law, so every single one of them stand.”
Councilman Stephen A. Urban agreed with McClosky Houck, saying he does not believe the contract is worth the investment.
Councilman Eugene Kelleher said Swetz has been forced to come in on weekends and holidays to handle payroll matters, which he does not believe is an “efficient use” of Swetz’s time and expertise. The payroll conversion project also should be completed, he said.
“I’m all for finishing up the project,” Kelleher said.
ADP was selected from five companies that submitted proposals in response to the county’s public request, said Swetz.
An ADP representative told council implementation is around 70 percent complete, and the company is preparing to take over the payroll processing by the end of May. The demonstration highlighted payroll and W-2 information, time-off requests and other data employees would be able to instantly access online.