Hays County discusses outsourcing payroll, requests vendor demos but tables formal action

The Hays County Commissioners Court discussed whether to explore outsourcing county payroll functions but did not authorize immediate contracting. Tre asurer Kathleen Tenorio and other officials described potential benefits of outsourcing; purchasing staff recommended a stepwise review using cooperative purchasing contracts. After extended discussion the court tabled formal action and directed staff to continue information-gathering and demonstrations rather than issue a full request for proposals immediately.

Treasurer Kathleen Tenorio told the court she had contacted peers in other Texas counties and said outsourcing can reduce costs and limit some payroll liabilities. She estimated vendor savings discussed with other treasurers at roughly 30% and described vendor capabilities including employee self-service portals, year-end W-2 processing, tax filings and garnishment handling. Tenorio said outsourcing could provide technology investments the county has not made and could shift front-line processing off county staff.

County Auditor Marisol Gabriel Alonso and others cautioned that outsourcing does not eliminate the need for internal reconciliation and audit work. Alonso said New World entries still must be reconciled, that timesheets and payroll change notices (PCNs) would still require county review, and that an outsourced vendor would still need to integrate with the county general ledger. Alonso noted the county would still need staff with SQL or data analyst skills to ensure vendor data hits the correct GL accounts and to perform reconciliations. She emphasized the county’s existing issues—such as payments posted to the wrong reporting quarter when checks were backdated—stem from input and process practices that outsourcing alone would not fix.

Purchasing Agent Stephanie Hunt recommended first seeking demonstrations from vendors available through purchasing cooperative contracts rather than issuing a formal RFP immediately. She said demos and vendor conversations would clarify integration capabilities and costs without the time and expense of a full RFP; an RFP could follow if the court decides to pursue contracting.

Other commissioners raised concerns about staff morale after recent payroll reorganizations, and several urged that the county auditor lead any internal process review before outsourcing. Deputy/staff who work on payroll noted UKG (formerly Kronos) has not been fully implemented despite roughly $125,280 spent on the system, and that ongoing UKG–New World integration work remains necessary.

Outcome: the court discussed a motion related to purchasing developing specifications in conjunction with the auditor and treasurer for an RFP on third-party payroll processing but elected not to take immediate contracting action. Judge Becerra stated the item would be tabled; purchasing and the auditor will pursue demos and further analysis and return to the court with findings.