Approve Town Manager Employment Agreement Amendmenttown nr
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DATE:
TO:
FROM:
SUBJECT:
MEETING DATE: 10/7/14
ITEM NO: 3
COUNCIL AGENDA REPORT
OCTOBER 1, 2014
MAYOR AND TOWN COUNCIL
RUMI PORTILLO, HUMAN RESOURCES DIRECTOR
APPROVE AN AMENDEMENT TO THE EMPLOYMENT AGREEMENT
BETWEEN THE TOWN OF LOS GATOS AND THE TOWN MANAGER
FOR A 2% WAGE INCREASE RETROACTIVE TO JULY 1, 2014
RECOMMENDATION:
Approve an amendment to the employment agreement between the Town of Los Gatos and the Town
Manager for a 2% wage increase retroactive to July 1, 2014.
BACKGROUND:
As an appointee of the Town Council, the Town Manager is employed under an Employment
Agreement specifying the terms and conditions of employment. The terms and conditions of
employment include items such as base pay, basic and optional benefits, covered expenses, parameters
for an annual performance review, and conditions for termination/severability.
DISCUSSION:
The Town Manager's Employment Agreement is reviewed on an annual basis in conjunction with
the Town Manager's annual performance evaluation. The review of the Employment Agreement is
conducted to ensure legal compliance and to provide for any adjustments in the terms and conditions
for employment.
The original Employment Agreement for Town Manager Greg Larson's appointment was approved by
the Town Council and signed by the Town Manager in November 2007. Changes to the employment
agreement since the initial adoption are as follows:
• January 2009, a one -time lump sum bonus of 3% of salary was provided and memorialized as
the First Amendment to the original Employment Agreement.
• November 2012, an update to the agreement was made to make administrative clerical
corrections and to incorporate new language as required by the California Government Code
for Chief Executive Officer employment agreements. The update also included a negotiated
option to convert auto allowance and deferred compensation to base salary at no net cost to
the compensation received.
Reviewed by:
Town
Attorney
NAPSL \Current \StaftlRumi \Cwreot\Mgmt & Unrep Salaries \Town ManageALa \TM FY 2014- 15 \Comcil Memo TM Agreem ®t Oct 7 2014 Final.doc
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MAYOR AND TOWN COUNCIL
SUBJECT: APPROVE AN AMENDEMENT TO THE EMPLOYMENT AGREEMENT
BETWEEN THE TOWN OF LOS GATOS AND THE TOWN MANAGER
FOR A 2% WAGE INCREASE RETROACTIVE TO JULY 1, 2014
OCTOBER 1, 2014
Although the Town Manager's employment agreement provides for an annual salary review, no further
salary adjustments were made since 2009, as salaries have been frozen due to the severe recession.
In May 2014, the Town Council contracted with an outside expert in management performance
evaluations for the purpose of facilitating a comprehensive evaluation of the Town Manager's
performance. The evaluation included individual interviews with each Council member and anonymous
surveys from a sampling of 20% of the workforce. The structured evaluation process was completed in
August 2014.
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Based upon the satisfactory completion of the Town Manager's performance review, it is recommended
that the Town Manager's base salary of $197,000 be increased by 2 %. An increase to base of 2% is
equivalent to $3,940, for an adjusted base salary of $200,940.
Although the Town Manager's employment anniversary was January 7 for the purpose of the
performance evaluation, the Town Manager has requested to defer the increase to July 1, 2014. Thus,
the recommendation reflects an effective date of July 1 as the increase date, consistent with the increases
provided to other management staff. All other contract provisions will remain the same.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
Funding to support the Town Manager's Employment Agreement is authorized in the annual budget
each fiscal year along with all other Town employee compensation and benefits. In addition to the
$3,940 increase in salary, the pension cost paid by the Town for the proposed salary increase is
approximately $882. Thus, the total budget impact of the additional salary ($3,940) and pension cost
($882) is $4,822. This cost will be absorbed in the current fiscal year (FY 2014/15) from other salary
savings in the Town Manager's budget and will be included in the base budget for future fiscal years.
The Town Manager will contribute an additional $315 in pension cost as a result of this increase and
will be deducted through payroll deductions.
Attachments:
1. Amendment to the Agreement for Employment — Town Manager
AMENDMENT TO THE AGREEMENT FOR EMPLOYMENT
TOWN MANAGER
This Amendment to Town Agreement AGR12 -194 is entered into this day of October,
2014, by and between the Town of Los Gatos, a municipal corporation ( "Town ") and Greg Larson
( "Employee ").
RECITALS:
WHEREAS, Town and Greg Larson executed an Agreement effective January 7, 2008 to
provide Town Manager services to the Town;
WHEREAS, in November 2012, the Town Council adopted an updated agreement to
incorporate changes in State law, corrections to the original agreement and increased the
compensation flexibility for the Town Manager to convert auto allowance and deferred
compensation to base salary as an annual election;
WHEREAS, in August 2014, the Town Council concluded a structured evaluation of Greg
Larson's performance and determined that all performance goals and objectives were met or
exceeded;and
WHEREAS, on the basis of the evaluation the Town Council desires to amend the
employment agreement to award the equivalent of 2% of the Employee's annual base salary.
IT IS THEREFORE AGREED by the parties as follows:
1. Item 4 of the Agreement is amended to read as follows:
4. Compensation.
(2) Based upon the satisfactory completion of the Town Manager's performance
review, the Town Manager's base salary of $197,000 is awarded an increase
of 2% (equivalent to $3,940), for an adjusted base salary of $200,940,
retroactive to July 1, 2014.
IN,WITNESS WHEREOF, the parties have executed this Amendment to the Town
Manager Agreement on the date written above.
ATTEST:
Town Clerk of the Town of Los Gatos
Los Gatos, California
TOWN OF LOS GATOS
ME
Steve Leonardis, Mayor
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