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: 10/16/2018
ITEM NO: 5
DATE: OCTOBER 11, 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 POLICE OFFICERS ASSOCIATION AND AUTHORIZE THE TOWN
MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING
B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE
AMOUNT OF $513,728 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 Police Officers’
Association (POA) and authorize the Town Manager to execute the Memorandum of
Understanding (Attachment 1);
B. Authorize salary and benefits budget adjustments in the amount of $513,728 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 POA 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 3
SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND
THE POLICE OFFICERS ASSOCIATION AND AUTHORIZE THE TOWN
MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING
B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE
AMOUNT OF $513,728 FROM ESTIMATED AVAILABLE FY 2018/19
OPERATING REVENUES
DATE: OCTOBER 11, 2018
S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\05 POA Agreement\Staff Report.docx 10/11/2018 4:23 PM
BACKGROUND (continued):
The Town has two other represented groups, the American Federation of State, County and
Municipal Employees (AFSCME) and the Town Employees’ Association (TEA). The AFSCME
agreement was approved during the August 7, 2018 Town Council meeting and the TEA
agreement was approved during the August 21, 2018 Town Council meeting .
DISCUSSION:
The Town’s current agreement with POA expires on September 30, 2018. In July 2018, the
Town and POA began negotiating for a successor agreement. A tentative agreement for a
three-year term was reached in September and POA membership ratified on September 27,
2018.
Major provisions of the agreement:
1. Term: October 1, 2018 to September 30, 2021
2. Salary:
a. Effective in the first full pay period of October 2018, the Town will provide a
2.5% salary increase.
b. Effective in the first full pay period of October 2019, the Town will provide a
2.5% salary increase and an additional increase of 1.5%.
c. For year three, the parties agree to re-open on the subject of wages only.
3. Equity Adjustments: Effective in the first full pay period of October 2018, add equity
adjustments indicated in Section 5.5 (see Attachment 1).
4. Holiday Pay: Conversion of holiday-in-lieu pay from 80 hours per calendar year to a 4%
premium pay.
5. Retiree Health: Elimination of retiree health benefits for all employees hired on or after
October 1, 2018, except for the minimum employer contribution as required by the
Public Employees’ Medical and Hospital Care Act (PEMHCA).
6. Vacation Cash-Out: Language added 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 October 1, 2018.
PAGE 3 OF 3
SUBJECT: A. APPROVE A LABOR AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND
THE POLICE OFFICERS ASSOCIATION AND AUTHORIZE THE TOWN
MANAGER TO EXECUTE THE MEMORANDUM OF UNDERSTANDING
B. AUTHORIZE SALARY AND BENEFITS BUDGET ADJUSTMENTS IN THE
AMOUNT OF $513,728 FROM ESTIMATED AVAILABLE FY 2018/19
OPERATING REVENUES
DATE: OCTOBER 11, 2018
S:\COUNCIL REPORTS\2018\10-16-18 Closed Session\05 POA Agreement\Staff Report.docx 10/11/2018 4:23 PM
DISCUSSION (continued):
8. Compensatory Time Off Cash-Out: Revised language to be compliant with the Internal
Revenue Service rules regarding constructive receipt and irrevocable elections.
9. CalPERS Employee Contribution: Beginning October 1, 2019, Increase Classic employee
pension contribution 3%, for a total contribution of 12%.
The Town and POA have also agreed to various MOU language updates. These updates clarify
existing language, delete obsolete language, and ensure compliance 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 POA agreement has been prepared within the parameters provided to Town’s negotiators
by the Town Council and has been ratified by the POA 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 $513,728.
The requested budget adjustments in the amount of $513,728 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.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. October 1, 2018 through September 30, 2021 POA Memorandum of Understanding showing
track changes