Human Resources Director Rosemary Rivas and Deputy Director Maya Reft presented the latest on the city’s ongoing payroll system overhaul in a detailed update at the Council Audit Committee meeting, acknowledging significant progress while highlighting continued system challenges and procedural inefficiencies.
Since the payroll function officially transitioned to the Human Resources Department on March 10, 2025, the team has been addressing longstanding system errors, CalPERS reporting inaccuracies and procedural bottlenecks that have impacted employees citywide, particularly those in field-based departments like the Municipal Utilities Department (MUD).
Error reduction and system fixes
“Prior to the transition, we were seeing anywhere from 700 to 900 CalPERS-related errors per pay period,” Rivas reported. “We’re now down to around 207.” She attributed the improvement to focused coordination between HR, payroll, consultants, and vendors.
“We have a biweekly meeting where it’s all vendors, it’s the payroll team, it’s the ERP team helping with Tyler (Munis),” she explained. “Just getting together to keep track of nothing falling through the cracks.”
Despite the progress, challenges persist due to how the Munis system was originally configured.
“You can’t just delete a transaction because it would delete historical records,” Rivas said. Instead, the team must “export, clean, and re-import the data,” followed by repeated testing to ensure the system functions correctly across all platforms.
A significant source of ongoing confusion stems from outdated or incorrect pay codes, project codes, and general ledger (GL) errors. Rivas noted that some departments were unknowingly using invalid project codes, resulting in cascading payroll and budget reporting issues.
Departmental disparities
MUD employees remain one of the most affected groups, largely because they still use paper timecards. Councilmember Michelle Padilla raised concerns based on staff feedback, asking, “Why are they still doing paper time cards, and can that be changed?”
Rivas explained the decision dates back to when MUD lacked sufficient technology infrastructure and HR oversight.
“At the time, the department chose to keep it paper because most of the employees were out in the field,” she said. “It is a management right to continue that process if that’s what’s working.”
Still, Rivas acknowledged the issues. “The goal is to go paperless,” she said. “But we have to take appropriate steps. Not every employee has access to a city-provided phone or tablet.”
In one instance, the payroll team was directed to change overtime rules shortly before a system update. “We reached out to the attorney’s office with concerns because that’s a change in how we pay employees,” Rivas said. “Ultimately, the rules were removed, and now everything is calculated manually.”
Council reaction and oversight
Councilmember Jason Lee praised staff efforts while urging continued diligence. “I just want to commend you, Ms. Rivas, and the whole team. Please make sure they understand how happy and satisfied we are,” he said. But he also asked, “How do we know we’re working to correct this and get this down to zero?”
Rivas responded that while zero errors may be idealistic, the focus remains on minimizing issues with accurate setup and better testing. “We’re hoping to become experts soon,” she said. “The team is definitely getting there.”
Councilmember Michael Blower echoed that sentiment, expressing surprise at the earlier volume of errors. “I’m still shocked when I see the number of errors, 700 to 900, it’s appalling that we, as council, weren’t made aware at the time,” he said.
He asked if a future with zero errors was realistic. Rivas replied that while minor human errors may continue, such as a personnel action form accidentally omitting a recurring allowance, there are no current monetary impacts to employees.
“Those 207 CalPERS errors do not affect employee compensation,” she clarified. “They are issues with how data is reported to the system.”
Structural fixes and future planning
In addition to resolving technical issues, the team is building tools to ensure accountability and prevent recurring mistakes. A new annual calendar will track all state and federal payroll deadlines, and the city is investing in training manuals, cross-training, and internal checklists.
Meanwhile, weekly meetings focus on resolving GL errors, often caused by missing deduction codes or invalid accounting segments. “Small fixes often resolve multiple errors,” according to the HR report.
Efforts are also underway to reconfigure the system to support mid-pay period pay changes and ensure accurate calculation of the 7/1 cost-of-living adjustment (COLA).
Broader administrative updates
Beyond payroll, the Administrative Services Division (ASD) is tackling staffing and procedural gaps across procurement, accounting and revenue departments. Multiple recruitments are underway, including positions for chief financial officer, assistant chief financial officer, and budget officer.
An efficiency study is also in progress, with 33 one-on-one interviews conducted and building walk-throughs planned for July. Preliminary themes include concerns about software functionality, staff turnover, and a need for greater appreciation and communication.
Additionally, a forensic audit led by Ryland Consulting will examine fiscal years 2021 through 2025, with a special focus on the use of Measure A funds and the purchase of the new city hall buildings.
“We are committed to transparency and accuracy,” Rivas said, “and we’re taking every step possible to ensure the payroll system reflects that.”