Title
Resolution to Approve a Renewal to the City’s Agreement with UKG, Inc. for UKG Human Resources and Payroll Software for FY2026 - FY2028 ($1,010,607.31)
Memorandum
Attached for your review and action is a resolution approving a Renewal to the City’s current Agreement with UKG, Inc for a term of three years for maintenance and support of the UKG Human Resources and Payroll software for FY2026 - FY2028 in the amount of $918,733.92, plus a 10% contingency ($91,873.39) to account for potential increases in full-time employees, for a total of $1,010,607.31.
Cost Breakdown:
FY2026: $306,244.64
FY2027: $306,244.64
FY2028: $306,244.64
Total: $918,733.92
Budget/Fiscal Impact: This expenditure is planned and budgeted in the FY2026 Information Technology Services Unit budget. The cost of the renewal was anticipated when the FY 2026 Information Technology Services Unit budget was completed. The expenditure is planned to be budgeted in the FY2027 - FY2028 Information Technology Services Unit budget.
The UKG Human Resource and Payroll System has been instrumental in allowing the City to systematically manage and control human resource functions, time keeping and payroll. Using the Time and Attendance module, City personnel can enter their current hours worked, submit requests for personal time off and view current and historic paychecks anytime and anywhere. Using the web-based Human Resource module, employees can elect their benefits and develop their objectives, while managers can perform reviews, manage employee development and recruit new employees.
The proposed renewal is imperative to maintain our relationship with UKG so the City can receive application updates and maintain support.
UKG complies with the requirements of the City’s Non-discrimination and Living Wage ordinances.
Staff
Prepared by: Jake Chase, IT Applications Delivery and Enterprise BI Manager
Reviewed by: Joshua Baron, Director, Information Technologies Service Unit
Reviewed by: Kim Buselmeier, Financial Manager
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The City of Ann Arbor and UKG, Inc. (formerly known as the Ultimate Software Group, Inc.) entered into an Agreement for Hosted Human Resources and Payroll System with an effective date of November 20, 2006, as amended (“Agreement”);
Whereas, The City of Ann Arbor has seen significant improvement in Human Resource and Payroll management since the implementation of UKG Human Resource and Payroll System;
Whereas, The proposed Renewal of the Agreement for an additional three-year term allows the City to lock in a favorable pricing structure for the UKG Human Resource and Payroll System and is necessary for continuing use of the system, receiving application updates, and maintaining support;
Whereas, The annual cost for the proposed Renewal with UKG, Inc. is $306,244.64, with a three-year total cost of $918,733.92;
Whereas, UKG, Inc. complies with the requirements of the City’s Non-discrimination and Living Wage ordinances; and
Whereas, The Information Technologies Services Unit plans to budget sufficient funding for FY2027 and FY2028 in the Information Technology Services Unit budget;
RESOLVED, That City Council approve the attached Renewal to the City’s existing Agreement with UKG, Inc. for a term of three years for maintenance and support of the UKG Human Resources and Payroll System for FY2026 - FY2028 in the amount of $918,733.92;
RESOLVED, That City Council approve a ten percent (10%) contingency in the amount of $91,873.39 over the life of the contract, subject to City Administrator approval;
RESOLVED, That the amounts authorized herein may be used without regard to fiscal year;
RESOLVED, That the Mayor and City Clerk be authorized and directed to execute such Renewal, after approval as to substance by the City Administrator and approval as to form by the City Attorney; and
RESOLVED, That the City Administrator be authorized to take all necessary actions to implement this resolution regardless of fiscal year including execution of any amendments or other contract documentation that does not exceed the amounts authorized herein, and termination of the Agreement per its terms if deemed necessary.