Staff Report
PREPARED BY: LISA VELASCO
Human Resources Director
Reviewed by: Town Manager, Assistant 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: 08/21/2018
ITEM NO: 12
DATE: AUGUST 17, 2018
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS
AND THE TOWN EMPLOYEES’ ASSOCIATION AND AUTHORIZE THE TOWN
MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING
B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE
AMOUNT OF $440,106 FROM ESTIMATED AVAILABLE FY 2018/19
OPERATING REVENUES
RECOMMENDATION:
Staff recommends that the Town Council:
A. Approve a labor agreement between the Town of Los Gatos and the Town Employees’
Association (TEA) and authorize the Town Manager to execute the Memorandum of
Understanding (Attachment 1);
B. Authorize salary and benefits budget adjustments in the amount of $ 440,106 from
estimated available FY 2018/19 operating revenues.
BACKGROUND:
In accordance with the Town’s Employer-Employee Relations Resolution No. 1974-41,
representatives of the Town and TEA have met and conferred in good faith and within the
scope of representation in an effort to reach agreement for a successor Memorandum of
Understanding (MOU). The revised agreement showing the changes from the previous MOU is
contained in Attachment 1. The MOU is a labor agreement that identifies specific terms and
conditions of employment applicable to the employees represented by that agreement.
PAGE 2 OF 4
SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND
THE TOWN EMPLOYEES’ ASSOCIATION AND AUTHORIZE THE TOWN
MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING
B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE
AMOUNT OF $440,106 FROM ESTIMATED AVAILABLE FY 2018/19
OPERATING REVENUES
DATE: AUGUST 21, 2018
S:\COUNCIL REPORTS\2018\08-21-18\12 TEA MOU\Staff Report - TEA Agreement.FINAL.docx 8/17/2018 3:05 PM
BACKGROUND (continued):
The Town has two other represented groups, the American Federation of State, County and
Municipal Employees (AFSCME) and the Police Officers’ Association (POA). The AFSCME
agreement was approved during the August 7, 2018 Town Council meeting . The POA
agreement expires on September 30, 2018. The bargaining team and POA have met four times
and additional meetings are scheduled through September with the goal of reaching an
agreement prior to the expiration of the agreement.
DISCUSSION:
The Town’s current agreement with TEA expired on June 30, 2018. In March 2018, the Town
and TEA began negotiating for a successor agreement. A tentative agreement for a three-year
term was reached in August and TEA membership ratified on August 17, 2018.
Major provisions of the agreement:
1. Term: July 1, 2018 to June 30, 2021
2. Salary:
a. Effective in the pay period that includes July 1, 2018, the Town will provide a
2.5% salary increase and a one-time (non-PERSable) payment equivalent to 1.5%
of annual base salary.
b. Effective in the pay period that includes July 1, 2019, the Town will provide a 3%
salary increase. If the Town determines in its sole discretion that the 3%
increase is not supported by the 2019-2020 budget, the parties agree that the
Town will provide a 2.5% salary increase and a one-time (non-PERSable)
payment equivalent to 1.5% of annual base salary.
c. For year three, the parties agree to re-open on Section 11 Salary.
3. Equity Adjustments: Effective in the pay period that includes July 1, 2018, the Town will
provide equity adjustments for classifications identified in Attachment 1 that are still
below market median after providing the first July 1, 2018 salary adjustment.
4. Certificate Pay: Dispatchers who attain the Advanced POST certification will be eligible
for five percent (5%) POST certificate pay.
5. Retiree Health: Elimination of retiree health benefits for all employees hired on or after
August 22, 2018, except for the minimum employer contribution as required by the
Public Employees’ Medical and Hospital Care Act (PEMHCA).
PAGE 3 OF 4
SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND
THE TOWN EMPLOYEES’ ASSOCIATION AND AUTHORIZE THE TOWN
MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING
B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE
AMOUNT OF $440,106 FROM ESTIMATED AVAILABLE FY 2018/19
OPERATING REVENUES
DATE: AUGUST 21, 2018
S:\COUNCIL REPORTS\2018\08-21-18\12 TEA MOU\Staff Report - TEA Agreement.FINAL.docx 8/17/2018 3:05 PM
DISCUSSION (continued):
6. Vacation Cash-Out: Reduced cash-out frequency to once per year to a maximum of 160
hours and included language to comply with Internal Revenue Service rules regarding
constructive receipt and irrevocable elections.
7. Sick Leave Cash-Out: Elimination of sick leave cash-out for all employees hired on or
after August 22, 2018.
8. Compensatory Time Off Cash-Out: Allow the cash-out up to 40 hours per year and in
compliance with the Internal Revenue Service rules regarding constructive receipt and
irrevocable elections.
9. Personal Leave: An additional twenty-four (24) hours of personal leave for exempt
employees.
The Town and TEA have also agreed to various MOU language updates. These updates clarify
existing language, delete obsolete language, and ensure complian ce related to the Town’s
contract for retirement and medical benefits provided under the California Public Employees’
Retirement System (CalPERS) and PEMHCA. The updates do not change existing benefits nor is
there a related fiscal impact (see Attachment 1).
CONCLUSION:
The TEA agreement has been prepared within the parameters provided to Town’s negotiators
by the Town Council and has been ratified by the TEA membership. It is recommended that the
proposal be approved, and the Town Manager be authorized to execute the MOU.
FISCAL IMPACT:
The anticipated fiscal impact for all salary adjustments in FY 2018/2019 is $440,106 and an
additional estimated $20,000 related to the certificate pay.
The requested budget adjustments in the amount of $440,106 from estimated available FY
2018/19 operating revenues will provide funding for the additional salary and benefit cost for
FY 2018/19.
Funding to support the FY 2019/2020 ongoing cost each year will be incorporated into the
proposed future year budgets for Council approval.
PAGE 4 OF 4
SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND
THE TOWN EMPLOYEES’ ASSOCIATION AND AUTHORIZE THE TOWN
MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING
B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE
AMOUNT OF $440,106 FROM ESTIMATED AVAILABLE FY 2018/19
OPERATING REVENUES
DATE: AUGUST 21, 2018
S:\COUNCIL REPORTS\2018\08-21-18\12 TEA MOU\Staff Report - TEA Agreement.FINAL.docx 8/17/2018 3:05 PM
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. July 1, 2018 through June 30, 2021 TEA Memorandum of Understanding showing track
changes