City Council

MURFREESBORO CITY COUNCIL AGENDA January 19, 2017 7:00 p.m. Council Chambers PRAYER MR. RICK LALANCE PLEDGE OF ALLEGIANCE CEREMONIAL ITEMS Consent Agenda 1. Consider recommendations of the Community Development Director: Housing Rehab for 1507 River Rock Boulevard. Minutes 2. A. December 5, 2016 - Special Joint Meeting of City Council/Parks & Recreation Commission (West Park). B. December 15, 2016 - Regular Meeting. C. January 5, 2017 - Special Meeting (Legislative Priorities). Second Readings 3. Consider for passage on second and final reading ORDINANCE 16-OZ-61 to zone an area along Asbury Road and Asbury Lane as Planned Residential Development (PRD) District (Kingsbury Development), simultaneous with annexation [2016-455]. 4. Consider for passage on second and final reading ORDINANCE 16-OZ-63 to zone an area located along Osborne Lane as Single-Family Residential Twelve (RS-12) District and Single- Family Residential Ten (RS-10) District, simultaneous with annexation [2016-454]. First Readings 5. Consider for passage on first reading ORDINANCE 16-O-26 amending Murfreesboro City Code, Chapter 11-Electricity, Sections 11-1, 11-2, and 11-3, dealing with the Murfreesboro Electric Department. New Business 6. Hear from Jobe, Hastings & Associates with regards to Comprehensive Annual Financial Report for Fiscal Year June 30, 2016. 7. A. Consider recommendations of the Human Resources Director: Transition to Arrears Payroll for City of Murfreesboro employees. B. Consider for adoption RESOLUTION 17-R-05 authorizing the adjustment of employee payroll from a current payroll cycle to a two-week arrears payroll cycle. Beer Permits Board & Commission Appointments Payment of Statements Other Business from Staff or City Council Adjourn  . . . creating a better quality of life CONSENT AGENDA January 19, 2017 Honorable Mayor and Members of the City Council: As an item for consideration under the Consent Agenda, it is recommended that the City Council approve the following item: Housing Rehab – 1507 River Rock Boulevard Background The homeowner at the subject address has applied for and is eligible for assistance through the City’s Housing Rehabilitation Program. Three contractors attended the Contractor Walkthrough on December 28, 2016. Two bids were received and opened on January 10, 2017. Bowen Glass & Construction $10,523.00 James I. Brown $ 8,579.76 Fiscal Impact The Community Development Budget as amended allocates $298,332 for housing rehab projects. Accepting the low bid of $8,579.76 from James I. Brown would leave a balance of approximately $164,000 available and uncommitted. Concurrences The homeowner has accepted the low bid and met with the contractor Thursday, January 12, 2017, to sign the contract. Recommendation We recommend approving the project and authorizing the Mayor to sign the construction contract on behalf of the City. Sincerely, John Callow Community Development Director Community Development 211 Bridge Avenue * P. O. Box 1139 * Murfreesboro, Tennessee 37133-1139 * Phone 615 890 4660 * Fax 615 217 2260 TDD 615 849 2689 www.murfreesborotn.gov  ORDINANCE 16-OZ-61 amending the Zoning Ordinance and the Zoning Map of the City of Murfreesboro, Tennessee, as heretofore amended and as now in force and effect to zone approximately 36.9 acres along Asbury Road and Asbury Lane as Planned Residential Development (PRD) District (Kingsbury Development) simultaneous with annexation; Land Management Group, applicant. [2016-455] BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MURFREESBORO, TENNESSEE, AS FOLLOWS: SECTION 1. That the same having been heretofore recommended to the City Council by the City Planning Commission, the Zoning Ordinance and the Zoning Map of the City of Murfreesboro, Tennessee, as herein referred to, adopted and made a part of this Ordinance as heretofore amended and as now in force and effect, be and the same are hereby amended so as to zone the territory indicated on the attached map. SECTION 2. That, from and after the effective date hereof, the area depicted on the attached map be zoned and approved as Planned Residential Development (PRD) District, as indicated thereon, and shall be subject to all the terms and provisions of said Ordinance applicable to such districts, the plans and specifications filed by the applicant, and the conditions and stipulations referenced in the minutes of the Planning Commission and City Council relating to this zoning request. The City Planning Commission be and it is hereby authorized and directed to make such changes in and additions to said Zoning Map as may be necessary to show thereon that said area of the City is zoned as indicated on the attached map. This zoning change shall not affect the applicability of any overlay zone to the area. SECTION 3. That this Ordinance shall take effect fifteen (15) days after its passage upon second and final reading, the public welfare and the welfare of the City requiring it. Passed: Shane McFarland, Mayor 1st reading 2nd reading ATTEST: APPROVED AS TO FORM: Melissa B. Wright Craig D. Tindall City Recorder City Attorney SEAL mjp \\puckett\legal\files\council\ordinances & annexation, pos resolutions\2016\61 - 16-oz-61.doc 11/18/2016 12:04:47 PM #1  K C REE HORD RD BRUCE D Ê RA L R L O V E AS BU RY RD Area Zoned PRD ASBUR DIX IE LN Y LN PRD Murfreesboro O Ordinance 16-OZ-61 City Limits RA VE LL RIDGEFIE EK CT LD DR Y DR EK CRE CROSS C RE DA LI HO  ORDINANCE 16-OZ-63 amending the Zoning Ordinance and the Zoning Map of the City of Murfreesboro, Tennessee, as heretofore amended and as now in force and effect to zone approximately 34.3 acres Osborne Lane as Single-Family Residential Twelve (RS-12) District (16.4 acres) and Single- Family Residential Ten (RS-10) District (17.9 acres), simultaneous with annexation; Conrad Camp, applicant. [2016-454] BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MURFREESBORO, TENNESSEE, AS FOLLOWS: SECTION 1. That the same having been heretofore recommended to the City Council by the City Planning Commission, the Zoning Ordinance and the Zoning Map of the City of Murfreesboro, Tennessee, as herein referred to, adopted and made a part of this Ordinance as heretofore amended and as now in force and effect, be and the same are hereby amended so as to zone the territory indicated on the attached map. SECTION 2. That from and after the effective date hereof the area depicted on the attached map be zoned and approved as Single-Family Residential Twelve (RS-12) District and Single-Family Residential Ten (RS-10) District, as indicated thereon, and shall be subject to all the terms and provisions of said Ordinance applicable to such districts. The City Planning Commission be and it is hereby authorized and directed to make such changes in and additions to said Zoning Map as may be necessary to show thereon that said area of the City is zoned as indicated on the attached map. This zoning change shall not affect the applicability of any overlay zone to the area. SECTION 3. That this Ordinance shall take effect fifteen (15) days after its passage upon second and final reading, the public welfare and the welfare of the City requiring it. Passed: Shane McFarland, Mayor 1st reading 2nd reading ATTEST: APPROVED AS TO FORM: Melissa B. Wright Craig D. Tindall City Recorder City Attorney SEAL mjp \\puckett\legal\files\council\ordinances & annexation, pos resolutions\2016\63 - 16-oz-63.doc 11/18/2016 12:13:27 PM #1  Ê STONE M ILL RIFT Murfreesboro City Limits 10' Strip ESQ UIRE DR ESQ UIRE RS-15 CIR DR CT PRD MA 10' Strip RY BETH CT YAKIMA WAY MEADOWHILL DR Area Zoned RS-10 RS-12 AR BE RS-10 FITZGER LN BR ALD DR AN PE NN Area CH Y Zoned RS-12 BL AC K N CT LIO RS- ST AL RS-12 Osborn RS- 12 e Lane 15 BLAKE CT RS- CARBON C OPY CT Ordinance 16-OZ-63 15 RS-12 RS- 10  ORDINANCE 16-O-26 amending the Murfreesboro City Code, Chapter 11 – Electricity, Sections 11-1, 11-2, and 11-3, dealing with the Murfreesboro Electric Department. WHEREAS, the City is authorized by its Charter to acquire by purchase, condemnation or in other lawful manner; construct, own, operate, maintain; or sell, lease, mortgage, pledge or otherwise dispose of, among other utility services, electric generating plants, electric distribution systems, and street lighting systems; WHEREAS, on May 12, 1939, the City, within the authority granted by its Charter, Chapter 429, Private Acts, 1935, purchased the existing electric system serving the City; created an electric department; and under that department, began operating the electric generating plant, purchasing electricity from the Tennessee Valley Authority, operating the electric distribution system, and operating the City’s street lighting system; WHEREAS, since creating the electric department, the City has financed the improvement, operation, and maintenance of the electric system through the collection of rate payments and the issuance of revenue bonds to meet demand for electric power and to provide a high level of electric service to the City’s electric customers; WHEREAS, on May 16, 1946 the Murfreesboro City Council (“Council”) resolved to create the Board of Public Utilities, the name of which on January 9, 1986 was changed to the “Murfreesboro Electric Department,” and to appoint a governing Board, commonly known as the “Power Board,” consistent with the Municipal Electric Plant Law of 1935, Chapter 32, Public Acts, 1935, for the general supervision and control of the improvement, operations, and maintenance of the electric system; the Power Board, with modifications, has served the City continually since its creation; WHEREAS, in light of the growth of the electric department, the expansion of the electric system, and the current and projected demand for additional service, the Council deems it in the best interest of the rate payers and the citizens of Murfreesboro, within and solely with respect to the authority granted by its Charter, to dissolve the Power Board as constituted and to reconstitute the Power Board under authority of the Charter in order to further integrate the electric department into the City’s management structure and assure continued effective and efficient improvement, operation, and maintenance of the electric system. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MURFREESBORO, TENNESSEE, AS FOLLOWS: SECTION 1. The Murfreesboro Electric Power Board, created by Resolution of the Council on May 16, 1946, and formerly known as the Board of Public Utilities, is hereby dissolved and re-established as set forth herein. SECTION 2. Section 11-1 of the Murfreesboro City Code is hereby amended by deleting the section in its entirety and substituting in lieu thereof the following: SECTION 11-1 DEPARTMENT CREATED. (A) Consistent with the City’s Charter, in 1939 the City purchased the electric generating plant and distribution system serving the City and created the City’s electric department as a department of the City government having jurisdiction mjp \\puckett\legal\files\council\ordinances & annexation, pos resolutions\2016\26 - 16-o-26.docx 12/9/2016 3:33:46 PM #1  over the electric generating plant, electric distribution system, and street lighting system (collectively, the “electric system”) within and outside the City. (B) Notwithstanding anything to the contrary that may be expressed or implied in this article, it is hereby expressly provided as follows: (1) the Council reserves full and complete power and authority to adopt the budget for the electric department and the electric system in such amounts as it determines upon consideration to the recommendations of the Power Board as to any proposed budget and in adherence to the City’s agreement with the Tennessee Valley Authority; (2) with the exception of safety policy and procedures related to specialized work on the electric system, all City employment policy and procedures will be adopted and implemented by the electric department unless variances are approved by Power Board. SECTION 3. Section 11-2 of the Murfreesboro City Code is hereby amended by deleting the section in its entirety and substituting in lieu thereof the following: SECTION 11-2 POWER BOARD CREATED. (A) Manner of creation. The Council, having purchased the electric system within the authority of its Charter, elects not to appoint a board of public utilities under T.C.A. § 7-52-107, and alternatively appoints a board for the electric system consistent with the Charter and this section. (B) Board creation. There is hereby created a “Power Board” of the City, to have and to exercise general supervision and control of the operation, maintenance, improvement, and extension of the electric system of the City including, without limitation by reason of enumeration, to exercise the powers and the performance of the duties hereinafter conferred upon the Power Board by the Council. The Power Board’s authority and responsibilities are subject to the terms and provisions of this article. (C) Board; term of office. The Power Board shall be composed of five members, four citizen members and one Council member. (1) The four citizen members shall be residents of the City appointed by the Mayor with the approval of the Council and serve four-year, staggered terms. For the initial appointment upon adoption of this Ordinance, the Mayor shall designate two citizen members to serve two years and two members to serve four years. Thereafter, each appointment will be for four years. Appointments made to fill vacancies will fill only the uncompleted term of the member vacating the Power Board. (2) The fifth member shall be a Council Member appointed by the Mayor and whose term shall be coterminous with that Council member’s current term of office at the time of appointment. (3) Members of the Power Board serve at the will of the Council and may be removed from the Power Board by the Council without cause. (D) Oath; bond. Each member of the Power Board shall qualify by taking the same oath of office as prescribed for Council members, and give such bond, if any, as may be required by resolution of the Council. (E) Vacancies. Vacancies in the membership of the Power Board occur upon the death or resignation or removal of a member, or upon a member ceasing to be a resident of the City. Vacancies shall be filled in the same manner as appointments and the new member so appointed shall fulfill the remainder of the term of the vacating member. (F) Organization. After the initial appointment of the Power Board members and at the first meeting after July 1st of each subsequent year, as its first order of business, the Power Board shall elect its chair, its vice-chair, and a secretary. Upon election, the chair shall preside for the remainder of the meeting and for thereafter during the elected member’s term. The Power Board may elect to designate an employee of the electric department to serve as secretary of the Power Board. In the event the chair is unavailable for any reason, the vice-chair shall preside at the meeting, and in the event the chair and vice-chair are both unavailable for any reason, the longest serving member of the Power Board shall preside at the meeting. mjp \\puckett\legal\files\council\ordinances & annexation, pos resolutions\2016\26 - 16-o-26.docx 12/9/2016 3:33:46 PM #2  (G) Quorum. A majority of the required members of the Power Board constitutes a quorum for that meeting and the Power Board shall act by majority vote of the members present at any meeting attended by a quorum. Vacancies in the Power Board shall not affect its powers and authority so long as a quorum remains. (H) Meetings. (1) Regular Meetings. The Power Board shall hold public meetings as often as may be necessary, but at least once per month, at such regular time and place as the Power Board may determine. All Power Board regular meetings and notice thereof shall comply with T.C.A. § 8-44-101 et seq. Changes in the time and place of regular meetings shall be made known to the public as far in advance as practicable. Any regular meeting may be adjourned from time to time by appropriate entry upon the minutes of the Power Board. (2) Special Meetings. The Power Board may hold special meetings at such regular place of meeting at such times and as often as may be deemed necessary upon the call of the chair, the vice-chair, or a majority of the Power Board at a duly noticed meeting, the General Manager, the Council member serving on the Power Board, or Council. All Power Board special meetings and notices thereof shall comply with T.C.A. § 8-44-101 et seq. Such call for a special meeting shall designate with specificity the reason for the meeting and shall be posted, at least twelve hours prior to the time fixed for the holding of such meeting, at the principal office of the department and City Hall, and, when practicable, upon giving oral or written notice thereof to the members not calling or participating in the call of the particular special meeting. (I) Compensation. All members of the Power Board shall serve as such without compensation or benefit but they shall be allowed necessary traveling and other expenses while engaged in the business of the Power Board, including an allowance not exceeding three hundred dollars ($300) per month for attendance at meetings, such expenses to constitute a cost of operation and maintenance of the City's electric system. SECTION 4. Section 11-3 of the Murfreesboro City Code is hereby amended by deleting the section in its entirety and substituting in lieu thereof the following: SECTION 11-3 POWER BOARD POWERS AND DUTIES. (A) Generally. In addition to and incidental to the powers and duties conferred upon or vested in the Power Board by the provisions of this Section, the Power Board shall have and perform the following powers and duties, to wit: (1) study and analyze the operations of the electric department and of the electric system and direct the General Manager to make improvements for a more efficient and economical operation thereof, including the development and implementation of rules and regulations pertaining to the provision of electric service to customers and as approved by the Tennessee Valley Authority; (2) consider the need for and direct the General Manager with reference to the maintenance, improvement, and extension of the electric system and the method or methods of financing same; (3) study and analyze the financial requirements of the electric system, including funds required (i) to pay all operating costs and expenses necessary to pay the principal of and interest on the bonds payable solely from the revenues and income of the electric system or payable from such revenues and income; (ii) to pay, in the event of a deficiency of such revenues and income, from unlimited ad valorem taxes levied on all the taxable property within the City necessary to pay the principal of and interest on any other bonds issued by the City for electric system purposes which are not expressly payable from such revenues and income, but by the terms thereof are payable solely from the levy of such taxes necessary to provide the sinking funds required to be set aside for the payment of any such bonds by the resolution or resolutions authorizing such bonds; (iii) to mjp \\puckett\legal\files\council\ordinances & annexation, pos resolutions\2016\26 - 16-o-26.docx 12/9/2016 3:33:46 PM #3  provide for the necessary and appropriate maintenance, improvement, and extension of the electric system; (4) study the financial requirements of the electric system and create the necessary schedule of rates and charges which the Power Board considers necessary to meet such financial requirements; (5) study and secure the necessary insurance to protect the assets of the electric department and the electric system and to protect the City against any reasonable liability related to operation of the electric department and the electric system; (6) study and make recommendations to the General Manager as to the personnel required for the economical and efficient operation, maintenance, improvement, and extension of the electric system, including recommendations on the salary, other compensation, and the terms and conditions under which such personnel shall be employed or work, provided such personnel are provided for in the budget for the electric department and electric system for the current fiscal year; or, if not so provided for, when the employment of such person or persons is specifically authorized by the Council through a budget amendment; (7) subject to Council approval of funds budgeted therefore, authorize the General Manager to contract for all services, supplies, equipment, and machinery required in the operation, maintenance, improvement, and extension of the electric system, provided, however, (i) that the General Manager shall have the authority to let contracts obligating the electric plant on purchase orders without prior approval by the Power Board in an amount set by resolution of the Power Board; and (ii) all emergency purchases by the General Manager shall be subject to procedures set forth in Section 2-10 of the Code, substituting therein the General Manager for the City Manager; (8) subject to Council approval of funds budgeted therefore, make any expenditure for the current fiscal year for the operation, maintenance, improvement, and extension of the electric system; (9) subject to Council budget approval and consistent with the City’s contract with the Tennessee Valley Authority, lower, raise, or otherwise change any rate or charge for electric service or other services furnished by the electric department and the electric system; and (10) appoint and, subject to the budget of the electric department, fix the salary of the General Manager of the electric department, who shall (i) be qualified by training and experience for the general superintendence of the acquisition, improvement, and operation of the electric plant; (ii) have the authority and responsibility for the general superintendence of the acquisition, improvement, and operation of the electric plant; (iii) commit to regularly communicating, collaborating, and conferring with the City Manager regarding the operation of electric department and electric system to assure the citizens and businesses of the City are best served; and (iv) in the event of a declared emergency and with the consent of Council shall be subject to the direct authority of the Mayor. (B) Limitations. Notwithstanding anything to the contrary in this article that may be expressly or impliedly provided, nothing in this article shall be held or construed to: (1) empower the Power Board to borrow money on the faith and credit of the City or on the faith and credit of the electric system or the income and revenues therefrom or the properties thereof or otherwise, or to give and execute any evidence(s) of any such indebtedness; provided that nothing in this clause hereof shall be held or construed to prevent the Power Board from authorizing or making any expenditure (not previously authorized and made), provision for which is made in the budget for the current fiscal year adopted by the Council for the electric department and for the operation, maintenance, improvement, and extension of the electric system; (2) authorize the Power Board in its own name to purchase, hold, or encumber any real property; (3) prevent the Council from reducing or eliminating any item(s) of expenditures provided for in said budget to the extent not theretofore mjp \\puckett\legal\files\council\ordinances & annexation, pos resolutions\2016\26 - 16-o-26.docx 12/9/2016 3:33:46 PM #4  already encumbered or made; or (4) affect in any manner or way any contract or obligation of the City with respect to the electric system or the income or revenues therefrom or the properties thereof, nor with respect to any bonds issued in connection with the electric system or obligations assumed with respect to such bonds. (C) Budget. On or before May 15th of each year, unless such time be extended by the Council, the Power Board shall submit to the City Manager, for submission to and consideration by the Council, the budget for the electric department for the operation, maintenance, improvement, and extension of the electric system for the ensuing fiscal year, which shall be prepared in cooperation with the City Manager and which shall set forth under appropriate headings: (1) the recommended itemized expenditures required for the operation, maintenance, improvement, and extension of the electric system during such ensuing year; (2) the amounts to pay principal of and interest on bonds payable in whole or in part from the revenues and income from the electric system and maturing during such ensuing year and the amount or amounts required by the resolution or resolutions authorizing such bonds to be set aside in reserve or sinking funds for such bonds during such ensuing year and including any recommended expenditures to be made from the proceeds of bonds which the Power Board may recommend to be issued by the City or from tax or other funds which the Council may be requested to provide; (3) set forth a detailed estimate of the income and revenues to be derived from the electric system during such ensuing year, supported by a detailed summary of the actual income and revenues from the electric system during the current and the preceding fiscal years and of the actual expenditures made from such income and revenues during such current and preceding fiscal years for the operation, maintenance, improvement, and extension of the electric system; and (4) a detailed statement of the proceeds from bonds and of other funds made available by the Council or otherwise to, and actually expended for, the operation, maintenance, improvement, and extension of the electric system during the current and preceding fiscal years. Nothing herein contained shall be held or construed to prevent the City Manager from commenting upon or providing additional information for consideration by the Council with respect to the budget for the electric department and for the operation, maintenance, improvement, and extension of the electric system during such ensuing fiscal year. (D) Reports to Council. The Power Board shall make an annual report for each fiscal year of the operations, receipts, and expenditures of the electric department and of the electric system to the Council and, if and so long as requested by the Council, quarterly reports of such operations, receipts, and expenditures, reflecting total income and revenues of the electric department and of the electric system and, under headings corresponding with the items in the budget for the current fiscal year of the electric department and electric system, the expenditures authorized and made during the period covered by such reports. SECTION 5. That this Ordinance shall take effect fifteen (15) days after its passage upon second and final reading, the public welfare and the welfare of the City requiring it. Passed: Shane McFarland, Mayor 1st reading 2nd reading ATTEST: APPROVED AS TO FORM: mjp \\puckett\legal\files\council\ordinances & annexation, pos resolutions\2016\26 - 16-o-26.docx 12/9/2016 3:33:46 PM #5 Melissa B. Wright Craig D. Tindall City Recorder City Attorney SEAL mjp \\puckett\legal\files\council\ordinances & annexation, pos resolutions\2016\26 - 16-o-26.docx 12/9/2016 3:33:46 PM #6 No Digital Copy “creating a better quality of life” GLEN GODWIN, SPHR, IPMA-CP 111 West Vine Street HUMAN RESOURCES DIRECTOR P.O. Box 1139 Murfreesboro, TN 37133-1139 Phone 615-848-2553 FAX 615-904-6506 E-mail: ggodwin@murfreesborotn.gov Regular Agenda January 19, 2017 Honorable Mayor Shane McFarland and Members of Murfreesboro City Council Re: Transition to Arrears Payroll for City of Murfreesboro employees As an item for the regular agenda of January 19, 2017, City Council will consider a resolution regarding transitioning payroll to arrears. Background  Project Summary The MUNIS ERP (Enterprise Resource System) system was implemented in conjunction with the City of Murfreesboro IT Strategic Plan which included implementation of the MUNIS Payroll module and Kronos time and attendance system software in February 2016. This software implementation replaced the former COBOL Legacy system used to generate City and Murfreesboro Water and Sewer employee Payroll and is strategically congruent with the Finance department MUNIS implementation. Since the design of time and attendance systems are not ideally configured to work with a “current” payroll schedule, the Kronos system used by the City required customized configuration and customized interface, which has resulted in the need to reconcile employee and supervisor time card entries and approvals during a short payroll processing window, this, in turn, creates an ongoing possibility of employee overpayment and underpayment (from scheduled work hours) scenarios for employees. Some employees are unable to understand how the Kronos system reconciliations (that work with actual time entries, schedules, benefits accruals/usage and projections) represent actual time worked when receiving and comparing their payroll advice statements to their time cards. All such system reconciliations have been found to be in compliance with the existing requirements of the Fair Labor Standards Act (FLSA). The Payroll Department has worked hard to provide training and support to Subject Matter Experts (SME’s) and has provided tools including a Kronos Payroll Preparation report for the purpose of detailing how hours are tracked and recorded from time card entries to pay advice statements. Departmental Subject Matter Experts have thus been able to better explain hours’ reconciliations with these tools and training to employees. Even though this particular reconciliation issue affects only full‐time non‐exempt (hourly) employees, a transition to arrears payroll allows for payroll processing to be smoother, easier to understand by employees and supervisors, and is considered an industry best practice by professional payroll organizations and other businesses. Arrears payroll also provides for more synchronization between employee time card entries and payroll advice statements; especially with those employees who serve on a tour of duty in either the Murfreesboro Police Department or Murfreesboro Fire and Rescue Department. There have been a number of employees who have expressed concern that their payroll advice statements are not easy to follow, understand or verify with their time card entries. Payroll has met individually with a number of employees to explain the reconciliation and “true up” effect on the next payroll cycle. These meetings have resulted in employees understanding that they were paid for every hour worked. However, these types of employee concerns cannot be addressed without moving to arrears payroll.  Project Team A project team including City Administration, Finance, Human Resources, Legal, and Information Technology has analyzed the various advantages and disadvantages of continuing to pay “current” versus transitioning to “arrears” payroll. The analysis included benchmarking of other public and private sector entities who have transitioned to arrears payroll and a review of applicable Federal, State, and Local laws. The team has concluded that moving to arrears payroll is beneficial for City employees, supervisors, payroll processing and integration within existing Kronos and MUNIS software, given the project transition options.  Employee Focus Group meetings An employee focus group of ten employees and supervisors from MPD, MF&R, MW&S, and Parks and Recreation was held in August and October of 2016. The purpose of the focus group has been to be a sounding board as the project team analyzed options and employee communication information. Employees in attendance included employees who are scheduled to work on respective tours of duty. Employees were provided with project details and draft communication for the transition and options, were asked for their feedback, and informational materials and options were changed based on the feedback received from the focus group. All Employee Communication and Leadership team feedback to City Administration  The leadership team was provided with communication tools including an eleven minute transition project overview video and a payroll cycle‐specific power‐point slide deck to communicate transition highlights to their respective employees.  Employees were asked to provide questions and feedback to their respective Department head(s) during the last week of December.  A large majority of employee feedback concerns specific questions about how deductions and withdrawals would be affected by the various hardship avoidance options. 2|Page   Human Resources presentation to City Council at Human Resources and Finance City Council Retreats City Council was provided with in depth project information at its September 12, 2016, HR Retreat and was also provided with follow up information at its January 11, 2017, Finance retreat. Information concerning the project background, current policy and practice, hardship avoidance options, and fiscal impact were provided. City Manager Rob Lyons and HR Director Glen Godwin provided City Council with informational options taken from benchmarking, the project team analysis, and employee focus group feedback regarding how a financial hardship may be avoided for City employees. After reviewing the information provided by City Administration and Human Resources, City Council has expressed financial support for the City to assume the entire cost to transition to arrears payroll.  Employee eligibility and projected effective date of transition All full‐time employees engaged in continuing employment activities during the two weeks immediately preceding the arrears transition date and are anticipated to continue thereafter are proposed to be eligible for two weeks regular wages, less normal withholdings, and deductions, as arrears transition pay. The one exception is for the retirement related deduction for the (ICMA) 401(a) and (ICMA) 457 plans, contributions will not be made as they are required, since they are computed on base wages. Part‐time employees who are currently paid one week in arrears will transition to two weeks in arrears but are not eligible for arrears transition pay. Employees running out benefits hours (pending their retirement status) are not eligible for arrears transition pay, however, will continue to receive available benefits hours payments as scheduled. The projected arrears transition date is April 2, 2017; however, this date is subject to change due to software configuration design, testing results, and unforeseen project delays. Fiscal Impact  Kronos programming changes‐Kronos requires approximately 100 hours of software configuration and testing for $19,800. Funding for this purchase will come from the FY17 Human Resources Budget; consulting services.  Human Resources must test the configurations in‐house prior to implementing the arrears settings, requiring department overtime. It is estimated that 100 hours of HR Department project work are required to test the new configuration.  Payroll operational processing‐ It is unknown how many hours of savings may be identified by this transition but savings are plausible.  The cost of providing employees with two weeks’ pay for this transition is approximately (gross) pay of $1.9 million based upon current Payroll. This payment will not affect cash flow for the City as the payout to the employees will not change for the fiscal year. However, a 3|Page  budget amendment will be done, if needed, in the Spring once we have better estimates of our actual spending anticipated through June 30. The change to arrears will increase our accrual at June 30, as there will be at least 2 weeks of pay that will be due, but not paid at year end. Gross pay estimate for arrears transition cost to City Payroll cycle Base Wages* FICA Medicare Total Cost Bi‐Weekly $1,362,898 $78,916 $18,456 $1,460,270 (75, 80, or 108 hours) Water & Sewer $290,946 $16,884 $3,948 $311,778 (75 or 80 hours) Weekly $118,776 $6,810 $1,592 $127,178 (80 hours) *Represents two weeks regularly scheduled hours $1,899,226 Concurrences City Manager Rob Lyons, City Attorney Craig Tindall, and IT Director Chris Lilly concur with this recommendation. Recommendation It is recommended that City Council approve the transition to arrears payroll which provides for Kronos to begin work on reconfiguration of arrears payroll on January 20, 2017 with an effective transition date of no sooner than April 2, 2017; however, the effective date will be determined by the progress made during configuration and testing portion of the project between Kronos and the City Human Resources Department. This transition includes funding the cost of providing two weeks’ regular wages, and the matching of Social Security and Medicare taxes which is approximately $1.9 million (gross), for the eligible Full‐time City of Murfreesboro and Murfreesboro Water and Sewer department employees who are currently paid on a “current” payroll cycle. Attachments Kronos‐ Work Order Respectfully submitted, Glen Godwin, SHRM‐SCP, IPMA‐SCP 4|Page  RESOLUTION 17-R-05 authorizing the adjustment of employee payroll from a current payroll cycle to a two-week arrears payroll cycle. WHEREAS, the City pays its employees on a current payroll cycle, which entails paying employees for the immediate prior two weeks and such payroll cycle requires substantial administrative expenses, increases the risk of errors, requires continual payroll adjustments on later issued paychecks, and makes it difficult for employees to monitor their pay; and, WHEREAS, adjusting the method by which employees are paid to a two weeks in arrears payroll cycle, which is widely recognized as best practice for virtually all public and private employers of any size, will allow the City to better utilize modern payroll software systems, substantially reduce administrative expenses, reduce the risk of errors, and eliminate the need to frequently adjust paychecks to accommodate changes in work schedules; and, WHEREAS, in light of the significant benefits that a transition to payroll in arrears provides to the City, the use of funds currently budgeted for salary payments is justified. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MURFREESBORO, TENNESSEE, AS FOLLOWS: SECTION 1. That the City Manager implement as soon as practicable the transition of the City employee payroll schedule for the payment of employees two weeks in arrears and that employee policies and procedures be modified as necessary to reflect this transition. SECTION 2. That funds currently budgeted for salary be used to pay regular wages during the transition period, consistent with any applicable legal requirements, for those full-time employees engaged in continuing employment activities during the two weeks immediately preceding the transition date and anticipated to continue thereafter. SECTION 3. That this Resolution be effective immediately upon its passage and adoption, the public welfare and the welfare of the City requiring it. Passed: Shane McFarland, Mayor ATTEST: APPROVED AS TO FORM: Melissa B. Wright Craig D. Tindall, City Recorder City Attorney mjp \\puckett\legal\files\council\resolutions\2017\05 - 17-r-05 - payroll to arrears.docx 1/17/2017 1:47:11 PM #1