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HomeMy WebLinkAboutTR-64-89 TOWN OF NEWCASTLE �JjY l i REPORT File Res. # By-Law # MEETING: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE DATE: JULY 3, 1989 REPORT #: TR-64-89 FILE #: SUB,ECT: EMPLOYEE PURCHASE PROGRAM - MICROCOMPUTER EQUIPMENT (Computerland Canada Inc. Proposal) RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That report TR-64-89 be received; and 2. That the proposal to initiate an employee microcomputer purchase program to provide hardware and software in the estimated amount of $80,000. be approved; and 3. That the funds required be drawn from the Working Funds Reserve Account (#2900-00001-0000) to be repaid through a 28 month employee payroll deduction program commencing September 1, 1989 and ending December 31, 1991. BACKGROUND AND COMMENTS i With the ever increasing use of computers in the workplace most of the cost and responsibility of training employees in the use of computers has been placed on the employer. The immense costs of training are most noticeable in periods of growth or when new computer enhancements are added. Unfortunately the Town is not an exception. With the increased staff_ and addition of new systems, the administration is left with the task of training and retraining the employees in the latest technologies. i 723 i -- Page 2 -- TR-64-89 EMPLOYEE PURCHASE PROGRAM - MICROCOMPUTER EQUIPMENT In recent years many progressive private and public corporations have reacted to this situation by introducing employee purchase programs for microcomputers. These programs expand the skill base of a company's employees without the company bearing the full load of training. Because the employees see the program as the company helping them to advance themselves, the program builds motivation. Also, as employees grow more comfortable with their computer systems, they become more productive and innovative. Employees see this program as an easy way to gain access to a computer for the education of the whole family. It is a benefit of highly perceived value at minimal cost to the organization. At this point in time this type of program would be exceptionally valuable to the Town, given the current proposal for installation of a personal computer network. The group purchase in conjunction with the Town's purchase from Computerland would allow the Town's discounts to be applied to an employee purchase program. This would provide the employees with similar equipment to the mutual benefit of both the Town and staff. For councils information'lattached is an article from Background, a Ministry of Municipal Affairs publication (Attachment A) . It discusses a very successful program that was put in place by the City of Peterborough. They were able to provide us with the details of their program to assist in the preparation of the attached Microcomputer Purchase Agreement (Attachment B) . This contract would provide for a repayment schedule and define the terms and obligations of the employee and the municipality. 724 -- Page 3 -- TR-I�f-89 EMPLOYEE PURCHASE PROGRAM - MICROCOMPUTER EQUIPMENT The expense of this program is minimal when compared to the cost of training. To emphasize this point, the approximate cost per employee for the duration of the program would be equal to the cost of providing one two-day training seminar. These amounts are based on the Town's cost of carrying the employee's interest free loan compared to the cost of the seminar and the unproductive time spent by an employee attending the course. The interest costs to the Town would be more than offset over the two year period by the direct reduction of long term training costs. The staff have considered the merits of this program carefully and are certain the benefits will greatly exceed the costs. If approved, the available options would be presented to staff and council members. It is anticipated that the average unit, consisting of a PC and printer, would cost approximately $2,200. This would equate to approximately $40.00 per pay by the employee. With no anticipated delays these units would be available by September 1, 1989. The equipment becomes property of the employee but there will be a signed agreement authorizing the Town to deduct any amounts owing upon resignation or termination of an employee. Respectfully submitted, Recommended for presentation to the Committee 14w�� J,�(w I rie Marano, H.B.Sc. Lawrence E Kotseff Treasurer Chief Admi istrative Officer MAM/TP/ges 7 25 ATTACHMENT A The national unemployment rate fell 0.1 per- The details of the plan are straightforward. centage point to 7.5 per cent in March. Employees were given the opportunity to buy a Seasonally-adjusted employment in Canada PC through the city and pay for it over a one, two increased by 25,000 in March. or three-year period without any interest char- ges. The city is willing to pay the interest because Economic Conditions - Consumer Prices in the long run, the charges are actually less than the money usually spent on training. Employees - The Ontario CPI inflation rate was 5.9 per had the option of purchasing their PC's through cent in March, compared to 5.8 per cent in payroll deduction or by paying the total purchase February. Between February and March, the price up front. Participating employees also paid index increased by 0.5 per cent in both On- a $100 non-refundable enrollment fee to help tario and Canada. offset interest charges and administrative costs. The plan's only condition was that all equipment - The Canadian CPI inflation rate was 4.6 per purchases had to be compatible with the city's cent in March, unchanged from the rate own computer systems. recorded in February. Of the city's 650 employees, eighty-five pur- chased a PC through the plan. One..member of council also participated. So far, the plan has yielded enormous benefits for everyone in- ; !'(111Qt( 111QlV 5 volved. The city reduced staff training costs and the time away from work that employees normal- PC's at Home - Computer Skills With Lower ly need to undergo training. . In addition, Training Costs employee computer skills developed in a much shorter time resulting in improved job perfor- Almost everyone agrees,.that learning a new manse. i skill'is easier if you can have fun while doing it - For their part, employees were able take ad- especially in the comfort of your own home. The vantage of.reduced computer prices made pos- City of Peterborough has capitalized on this idea sible by the city's volume purchase. And with their Employee Personal Computer Pur- although not all employees that purchased chase Plan. By allowing employees to purchase through the plan actually use a computer on the PC's through the city, costs for staff computer job, their overall level of knowledge has been training were significantly reduced and computer enhanced by their new computer skills. The city skills were acquired more quickly. All because believes that those kinds of personal improve- employees learned the 'ropes' at home, on their ments play an important part in employee morale own time. and well-being. In approving the Employee Personal Com- Although the city has no plans for another puter Purchase Plan in late 1987, Peterborough employee PC purchase in the near future, it in- City Council reaffirmed its commitment to staff tends to review staff turnover in the coming years training and development. It viewed the plan as and will put the plan into action again if employee . an alternative training method that would not interest is high. Judging by the success of the only be cost effective, but would make learning city's first PC venture, the chances are good much easier. After the plan was approved, the they'll be doing just that. Finance and Administrative Services Depart- For more information on the City of ment selected a vendor which provided the best Peterborough's Employee Personal Computer combination of price, quality and after sales ser- Purchase Plan, please contact Brian Horton, vice. By July 1988, city employees were hacking Manager of Financial Services, Financial and. on their new PC's at home. Administrative Services Department, City of 1 Page 3 BACKGROUND- May 15, 1989 ATTACHMENT B THE CORPORATION OF THE TOWN OF NEWCASTLE EMPLOYEE MICROCOMPUTER PURCHASE PLAN General Terms and Conditions Purpose The Employee Micro-Computer Purchase Plan was proposed to allow employees to purchase micro-computers at a volume discounted price and provide an interest free loan for the purchase of the equipment to be repaid through a payroll deduction. Eligibility The plan will be available to full-time Town of Newcastle Employees and Town Council. Part-time Employees will be able to take advantage of the Town's discounts but not the financing. Limits per employee Participants are limited to the purchase of one single system and the Town will provide financing up to a maximum of $2200 per employee. Delivery and Title All equipment will be picked up by employees at the vendors location. Computerland will provide home delivery installation and basic hardware training at an additional cost. (Employee Purchase Plan Care Package - see Schedule A) . Title to the equipment will be given to the participant upon delivery. Participants must complete the Employee Purchase Agreement and the appropriate payroll forms for payment through payroll deduction. (Schedule C) . Taxable Benefit The interest costs absorbed by the Town will appear as a taxable benefit on each participant's pay cheque and T-4 slips. Software: A library of standard software packages used with the Town will be maintained by Computer Services staff, with software available on an over-night or weekend basis to participants. Participants may purchase software packages with the group purchase to take advantage of volume/corporate discounts. Each participant will acknowledge that some software available under this plan, purchased or on loan, is protected by Copyright laws and may not be copied. 727 (Page 2) Accessories Accessories such as tables, chairs, desks, printer stands, lights, etc. are not eligible to be purchased through the plan. Education and Training Computerland will provide only limited "set up" and installation for the hardware and software offerings. Computerland can provide additional training and support at an addtional cost as outlined in Schedule A. Each participant in the plan is encouraged to further their own education regarding micro computers by taking appropriate training courses offered by the Community College, Boards of Education, Computerland and other private groups. The Town encourages the formation of user groups among Town employees to discuss and resolve common problems. Changes after equipment delivered once the equipment has been delivered, employees wishing to change or add to their system must do so independently from the Town at their own expense. Payment options Participants may choose one of the following payment options: 1. Full payment at time of delivery. 2. Total cost to be paid through payroll deduction over 28 months. 3. Partial payment at time of purchase, balance paid through payroll deduction over 28 months. If a participant terminates employment or is terminated by the Town, the outstanding principal will be deducted from his/her final pay with any remainder payable by cheque before the last day of work. Hardware The only hardware eligible for financing is the equipment specified in Schedule A. The cost of maintenance and/or repairs will be the sole responsibility of the participant - not the Town. In the event of breakdowns, the participants must transport their equipment to and from the service location. 728 (Page 3) All equipment will carry a minimum of one year parts and labour warranty. It should be stressed that employees wishing to purchase further maintenance contracts must do so at their own expense independently from the employee purchase plan. Upgrades to hardware and software, after the initial delivery, are the sole responsibility of the individual participant. The attached Schedule A provides pricing on systems, components and typical configurations and options. 729