12-17-2002 Council Agenda - Laserfiche WebLink

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MAYOR Michael I. Fahey COUNCIL Beverly Scalze Jim LaValle Matt Anderson Rick Montour 515 Little Canada Road, Little Canada, MN 55117 -1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson www. ci.little- canada. mn. us MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator Shelly Rueckert, Accounting Supervisor DATE: December 12, 2002 RE: Payroll Processing for 2003 As you may recall, the City has reviewed the cost of implementing direct deposit for payroll on previous occasions Each time the cost of the processing was deemed prohibitive. Recently, ADP developed a package aimed at smaller sized employers. This package includes direct deposit, filing of federal and state payroll tax forms, depositing of taxes, Human Resources help desk, (see attached) etc. Also attached is a cost comparison of this package to our current processing cost. As you can see from this comparison, the overall ADP processing cost is estimated $2,555.45 less than the internal processing cost. We would also be adding the direct deposit benefit and a Human Resources help desk feature not currently available. Even without considering the internal costs the ADP processing cost of $2,522 vs. the Springbrook software fee of $2,000 results in a cost of $522 to add direct deposit for staff and council. The internal costs were computed using $32.15 an hour, which is the 2002 hourly payroll cost for the Accounting Supervisor. That figure includes hourly wages plus benefit costs. The lowest staff cost that could be reasonably assumed for payroll processing is $25.00 an hour. Had this figure been used the savings would be reduced from $2,555.45 to $1,819.00. There is a one time license fee from ADP of $500 and set up cost of $100. Given the annual savings projected, staff is recommending that the City contract with ADP for payroll processing. H :Uessica]\CorrespondenceUessica 2002 \Payroll Processing Memo.doc 1