11 Staff Report.TM Agreement Amendment with attachments
Reviewed by: Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 05/07/2024
DATE: April 26, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Approve an Amendment to the Town Manager’s Employment Agreement
RECOMMENDATION:
Approve an Amendment (Attachment 2) to the Town Manager’s Employment Agreement.
REMARKS:
In September 2015, the Town Council approved an employment agreement with Laurel Prevetti
as Town Manager (Attachment 1). The agreement includes language in Sections 3 through 6
that indicates that the intent was to provide the Town Manager the same benefits as other
employees, including cash out provisions (Section 3). Cash out of an employee’s unused
vacation and unused sick leave is paid to all other Town employees at the time that an
employee separates from the Town. The rate of pay for the unused vacation leave is 100% of
the employee’s hourly rate. The maximum rate of pay for the unused sick leave is 50% of the
employee’s hourly rate and is based on the employees hire date and length of service.
The current language in the Town Manager’s agreement in Section 7 is inconsistent with the
other Sections and could be interpreted to prevent the typical cash out. Attachment 2 contains
the proposed Amendment which would clean up the discrepancy and clearly provide for cash
out of earned vacation and sick leave, while continuing to prohibit severance pay upon
voluntary resignation.
The Town Manager reached the Town’s accrual cap in 2021 during the COVID-19 pandemic and
no longer accrues vacation time. She is not expected to reach the sick leave cap.
COORDINATION:
The preparation of the proposed amendment was coordinated with the Town Attorney. The
Finance Department prepared the estimated cash out value.
PAGE 2 OF 2 SUBJECT: Town Manager Employment Agreement Amendment DATE: April 26, 2024
FISCAL IMPACT:
If the Town Council approves the Amendment and the Town Manager leaves Town service on
June 28, 2024, the estimated value of unused vacation (592 hours) and sick time (813 hours) is
approximately $140,000 (pre-tax). The Department of the departing employee pays cash outs
and is typically absorbed in the Town’s budget.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Original Employment Agreement
2. Proposed Amendment
Page 1 of 2 Ninth Amendment to the Town Manager Employment Agreement
ATTACHMENT 2
NINTH AMENDMENT TO THE TOWN MANAGER EMPLOYMENT AGREEMENT
This Amendment to Town Agreement AGR 15-172 is entered into this 16th day of April, 2024, by and between the Town of Los Gatos, a municipal corporation (“TOWN”), and Laurel Prevetti (“EMPLOYEE”).
RECITALS
WHEREAS, Town and Laurel Prevetti executed an Agreement effective September 2, 2015 to provide Town Manager services to the Town;
WHEREAS, a First Amendment to the Agreement was executed on April 4, 2017 to
amend the employment agreement to award a 4.43% wage increase to the annual base salary, effective on April 4, 2017 and a lump sum performance bonus of $3,000; and WHEREAS, a Second Amendment to the Agreement was executed on January 16, 2018
to amend the employment agreement to award a $8,000 wage increase to the annual base salary,
effective on January 16, 2018; and WHEREAS, a Third Amendment to the Agreement was executed on December 18, 2018, to amend the employment agreement to award a $16,250 wage increase to the annual base salary,
effective on September 2, 2018 and a lump sum performance bonus of $3,300; and WHEREAS, a Fourth Amendment to the Agreement was executed on December 3, 2019 to amend the employment agreement to award a $13,750 wage increase to the annual base salary, effective on September 2, 2019 and a lump sum performance bonus of $5,000; and
WHEREAS, a Fifth Amendment to the Agreement was executed on November 3, 2020 to amend the employment agreement to award a $12,500 wage increase to the annual base salary, effective on September 2, 2020 and a lump sum performance bonus of $5,000; and WHEREAS, a Sixth Amendment to the Agreement was executed on November 16, 2021 to amend the employment agreement to award a $5,250 wage increase to the annual base salary, effective on September 2, 2021; and
WHEREAS, a Seventh Amendment to the Agreement was executed on December 6, 2022
to amend the employment agreement to award a $8,033 wage increase (3%) to the annual base salary, effective on September 2, 2022, and a lump sum pandemic-related bonus of $2,500; and WHEREAS, an Eighth Amendment to the Agreement was executed on December 5, 2023
to amend the employment agreement to award a $13,789 wage increase (5%) to the annual base
salary, retroactive to the anniversary date of September 2, 2023; and WHEREAS, the intent of the original Agreement intended for the Town Manager to enjoy the same benefits as other Town mangement employees regarding holidays, vacation, sick leave,
other leaves, and other benefits, including the accrual, use, and redemption of vacation time,
personal leave, administrative leave, and sick leave as stated in Sections 3 through 6 of the Agreement.
Page 2 of 2 Ninth Amendment to the Town Manager Employment Agreement
ATTACHMENT 2
IT IS THEREFORE AGREED by the parties as follows: Section 7(E) of the Agreement is amended to read as follows:
E. Voluntary Resignation. MANAGER may voluntarily resign her position with TOWN before expiration of the term of this Agreement by giving TOWN sixty (60) days prior written notice. No severance pay shall be due MANAGER upon any voluntary resignation. All other terms of the original Employment Agreement remain in effect. IN WITNESS WHEREOF, the parties have executed this Amendment to the Town Manager Agreement on the date written above.
TOWN OF LOS GATOS ________________________________
Mary Badame, Mayor ____________________________ Laurel Prevetti , Town Manager
ATTEST: _______________________________ Wendy Wood, Town Clerk
APPROVED AS TO FORM:
______________________________ Gabrielle Whelan, Town Attorney