2�pW N OF
COUNCIL AGENDA REPORT
DATE: November 1, 2012
MEETING DATE: 11/5/2012
ITEM NO: ry
TO: MAYOR AND TOWN COUNCIL ((AA
FROM: RUMI PORTILLO, HUMAN RESOURCES DIRECTOR
SUBJECT: ADOPT RESOLUTION APPROVING AN UPDATED AGREEMENT BETWEEN
THE TOWN OF LOS GATOS AND THE TOWN MANAGER WITH NO NET
CHANGE TO THE TOTAL RECEIVED COMPENSATION, AND AUTHORIZING
THE MAYOR TO SIGN THE UPDATED AGREEMENT
RECOMMENDATION:
Adopt resolution approving an updated - agreement between the Town of Los Gatos and the-Town
Manager with no net change to the total received compensation, and authorizing the Mayor to sign the
updated agreement.
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.
The 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 current Employment Agreement was approved by the Town Council and signed by the Town
Manager five years ago in November 2007. In 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.
Subsequent bonuses and increases have not occurred due to ongoing economic and fiscal conditions.
DISCUSSION:
Based on satisfactory completion of the Town Manager's five year performance review and a thorough
review of the Employment Agreement, a revised and updated Employment Agreement is provided. The
updated Employment Agreement incorporates changes in State law, corrections to the original
agreement, and increased compensation flexibility for the Town Manager with no increase in
PREPARED BY:
RUMI PORTILLO, Human Resources Director
Reviewed by: Town Manager Assistant Town Manager own Attorney
Finance __�f
N:\MGR \AdminWorkFiles \2012 Council Reports \11 -5 -12 TM Agreement updated Nov 2012.doc
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MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING AN UPDATED AGREEMENT BETWEEN
THE TOWN OF LOS GATOS AND THE TOWN MANAGER WITH NO NET
CHANGE TO THE TOTAL RECEIVED COMPENSATION, AND AUTHORIZING
THE MAYOR TO SIGN THE UPDATED AGREEMENT
November 1, 2012
compensation received, as described below:
1) Incorporate contract language required under AB1344 for the purpose of increasing
transparency and accountability in public agency contracts. AB1344 amended the California
Government Code to add limitations on employment contracts for the Chief Executive Officer,
specifically establishing penalties for abuse of public office. By definition, the Town Manager
serves as the Chief Executive Officer reporting to the Town Council and is subject to these new
requirements. The proposed new contract language, pursuant to State law, establishes that if the
Chief Executive Officer's contract is terminated, any cash settlement related to the termination
shall be fully reimbursed to the local agency if the Chief Executive Officer is convicted of a crime
involving an abuse of office.
2) Correct the effective date of the original Employment Agreement. The original Employment
Agreement specified an incorrect effective date of January, 2007 which was modified in the First
Amendment. The proposed contract language uses the correct effective date of January, 2008, .
eliminating the potential for increased vacation accrual.
3) Provide an option for the Town Manager to convert special compensation to base salary.
Specifically, the proposed new contract language would provide discretion for the Town Manager
to move his existing $6,000 annual auto allowance and his existing $9,000 annual deferred
compensation contribution to base salary, with no net increase in compensation received. When
exercised by the Town Manager, these changes would convert the special compensation to
reportable earnings subject to employer and employee pension contributions.
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. The proposed contract
language would increase the Town Manager's pension costs by $1,200 and the Town's pension costs by
$3,000 and would eliminate the potential accrual of an additional week's vacation due to the incorrect
date in the original agreement.
Attachment: Resolution of the Town Council of the Town of Los Gatos amending agreement between
the Town of Los Gatos and the Town Manager and authorizing the Mayor to sign the
amendment
RESOLUTION 2012 -
RESOLUTION OF THE TOWN OF LOS GATOS APPROVING AN UPDATED
AGREEMENT BETWEEN THE TOWN OF LOS GATOS AND THE TOWN
MANAGER WITH NO NET CHANGE TO THE TOTAL RECEIVED
COMPENSATION, AND AUTHORIZING THE MAYOR TO SIGN THE
UPDATED AGREEMENT
WHEREAS, Town and Greg Larson executed an Agreement effective January 7, 2008 to
establish the terms and conditions of employment as Town Manager of the Town of Los Gatos;
WHEREAS, the Town Manager's performance is reviewed by the Town Council and a
thorough review of the Agreement is conducted on an annual basis;
WHEREAS, a First Amendment to the Agreement was adopted in January 2009 to provide
a lump -sum bonus of 3% of salary and no further bonuses or salary increases have been made due
to ongoing economic and fiscal conditions;
WHEREAS, it is necessary to update the Employment Agreement to incorporate new
contract language as established in State law and to reflect the desire to provide increased
compensation flexibility with no net change to the total received compensation;
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara,
State of California, that the Town Council approves the Amendment to Agreement between the
Town of Los Gatos and Greg Larson and that the Mayor is hereby authorized to sign the agreement
on behalf of the Town Council.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California, held on the 5th day of November, 2012 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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AGREEMENT FOR EMPLOYMENT
TOWN MANAGER
This Agreement is made and entered into this day of November, 2012, by and between
the Town of Los Gatos, a California general law municipal corporation, hereinafter referred to
as "Town" and Greg Larson, hereinafter referred to as "Larson."
RECITALS
A. The Town Council of the Town of Los Gatos has appointed Larson to the position of
Town Manager of the Town of Los Gatos on November 5, 2007.
B. It is the desire of the Town Council to establish the terms and conditions of employment
of Larson to the position of Town Manager of the Town-of _Los Gatos, including the duties,
salary and benefits of employment.
C. Larson desires to accept employment as Town Manager of the Town of Los Gatos under
the terms set forth herein.
NOW, THEREFORE, in consideration of the respective and mutual covenants hereinafter
contained and made, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and agreed, and subject to all the terms and conditions
hereof, the parties agree as follows:
SECTION 1.
1. Employment of Town Manager. This Agreement establishes the terms and conditions of
employment of Larson as the Town Manager of the Town of Los Gatos.
2. Duties: Larson shall perform the functions and duties of the Town Manager as specified
under the laws of the State of California, the Los Gatos Municipal Code, and the ordinances and
resolutions of Town, and perform such other duties and functions as the Town Council may
assign from time to time.
3. Term. Commencing on the effective date of this Agreement, which the parties agree
shall be January 7, 2008 ( "Effective Date "), Larson agrees to perform those functions and duties
specified in the Town Code and the Government Code of the State of California, and to perform
such other legally permissible and proper duties and functions as the Town Council shall from
time to time assign until this Agreement is terminated pursuant to its terms.
Page 1 of 7
4. Compensation.
(a) Base Salary. Town shall pay Larson the annual base salary of one hundred
ninety -seven thousand dollars ($197,000.00), ( "Base Salary "), in installments at
the same time as other employees of Town are paid.
(1) Following Employee's performance evaluation concluded in December of
2008 for Fiscal Year 2007 -08, the, Town. Council agreed to award an amount
equal to 3% of Employee's annual base salary, payable as a one -time lump sum
bonus.
(b) Deferred Compensation - 457 plan. In addition to Base Salary, Town agrees tc
make annual contributions on Larson's behalf to Towns approved deferred compensation
program established pursuant to section 457 of theJed.eral Internal Revenue Code at the
maximum annual legal amount, but in no event more than nine thousand dollars ($9,000.00)
per year. Town shall use its best efforts to execute all necessary agreements to provide
deferred compensation benefits pursuant to this Agreement. Alternatively, at Larson's sole
election on an annual basis, the annual deferred compensation contributions may be paid to
Larson as salary.
(c) Management Benefits. Except as otherwise set forth in this Agreement, in
addition to, the benefits specified herein, Larson shall receive. any and all employee benefits
otherwise accorded Town's executive management employees, including without limitation
paid retirement benefits consistent with Town policy through the Public Employees Retirement
System and health benefits, and as those benefits may be changed from time to time.
(d) Vacation. As of the Effective Date, Larson shall: be credited with two (2).weeks of
vacation leave, and shall thereafter be entitled to accrue, additional vacation leave at the rate of
four (4) weeks per year, which shall increase to five (5) weeks per year commencing on the`fifth
anniversary of the Effective Date Larson.shall.be.entitled to:accrue, use or redeem vacation
leave in whatever manner is permitted pursuant to Town policy, as same may be amended
from time to time by action of the Town Council.
(e) Sick Leave. As of the Effective Date, Larson shall be credited with twelve (12)
days of sick leave,. and shall_ thereafter be entitled to accrue_additional sick leave at the rate of
twelve (12) days per year. Larson shall 'be entitled to accrue, use or redeem sick leave in
whatever manner is permitted pursuant to Town policy, as same may be amended from time to
time by action of the Town Council.
Page 2 of 7
(f) Administrative Leave. Larson shall be entitled to administrative leave in an
equivalent amount to that granted Town department heads, which the parties agree is five (5)
days per year as of the Effective Date. Larson shall be entitled to accrue, use or redeem
administrative leave in whatever manner is permitted pursuant to Town policy, as same may be
amended from time to time by action of the Town Council.
(g) Personal Leave. Larson shall be entitled to personal leave in the amount of six
(6) days per year. Larson shall be entitled to accrue, use or redeem personal leave in
whatever manner is permitted pursuant to Town policy, as same may be amended from time to
time by action of the Town Council.
(h) Relocation Assistance and Housing Allowance. No housing allowance shall be
provided.
0) Equipment. Town shall prove Larson all necessary equipment to be productive
at and away from the Town Hall.
(j) Auto Allowance. Larson shall receive an annual auto allowance of six thousand
dollars ($6,000.00). Alternatively, at Larson's sole election on an annual basis, the annual auto
allowance contributions may be paid to Larson as salary.
(k) Compensation Changes. Should the Town Council, upon completion of its annual
review of Larson's performance pursuant to this Agreement, determine that Larson has met its
performance expectations; the Town Council shall increase Larson's compensation at least
consistent with compensation increases granted to other Town management employees.
Larson understands and agrees that he has no entitlement to an increase in compensation. Any
decision to increase Larson's compensation shall be retroactive to the beginning of the pay
period immediately preceding the anniversary of the Effective Date when the review is
conducted pursuant to this Agreement.
5. Termination and Severance.
(a) Termination. Town may terminate Larson at any time during the term of this
Agreement upon thirty (30) days notice of its decision to terminate this Agreement, as provided
by the provisions of the Ralph M. Brown Act (California Government Code §54950 etseq.) and
subject to the requirements of Town Code sections 2.30.285 and 2.30.290. Due to the
important nature of Larson's duties to the Town, if Larson desires to terminate this Agreement,
Larson must provide the Town Council with thirty (30) days written notice prior to the date he
ceases to perform his duties and responsibilities under this Agreement and the provisions of
the Town's Municipal Code.
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(b) Severance. In the event Larson is terminated without cause and subject to Town
Code sections 230.285 and 2.30.290 by the Town Council in attendance at any lawfully called
meeting, or resigns in lieu of termination, and Larson is willing and able to perform his duties
under this Agreement and the Town's Municipal Code, Town shall °provide Larson with
severance pay equal to six (6) months base salary an:d:deferred compensation and any benefits
that are lawfully required to be continued pursuant to COBRA and other statutes. Larson
retains the right to participate in Town health and related benefit!programs, should such
programs be instituted :during the term of this Agreement' at Larson's own and sole expense
pursuant to the terms-of COBRA. Larson shall be compensated for any unused vacation leave,
holidays, and other benefits then accrued consistent with Town policies.
(c) Termination for Cause. In the event Larson is terminated because of his
conviction of any illegal act involving a felon, personal gain, or moral turpitude, Town shall have
no obligation to pay the severance as set forth in this Agreement. In the event that Larson is
under investigation for any of the foregoing reasons; Town may withhold all.or part of such
severance pay until it is determined if charges will be filed, and if charges are filed, until final
judgment is rendered.
(d) Termination Based on Disa,b`ili.ty or Death. In the event Larson is permanently
disabled or is otherwise unable to perform his duties because of sickness, accident, injury,
mental incapacity or health reasons for a period of three (3) consecutive months beyond any
accrued sick leave, Town may terminate this Agreement.
6. Professional Development. Town agrees to pay for the professional dues, subscriptions,
and other costs of Larson deemed necessary for his participation in national; state, regional,
and Iocal ,associations and: organizations and in meetings, conferences, and training related
there to, including but not limited to the international City /County.Management Association,
League of California Cities, and. County City Managers' Association, which.are.consider-ed
mutual desirable for his continued professional participation and growth and for the good. of
the Town, subject to budgetary approval and Town Council oversight.
7. Business Expenses. Town shall reimburse Larson for all necessary and appropriate
business.expensesi:includi:ng, but not limited to, the costs of business meetings, business meals,
staff functions. -and,.speci l events attended in an.offida[ capacity, subject to any guidelines the
Town Council mtayimp:ose. Expenses-associated`with La'rson4sluse of'his personal automobile
shall be reimbursed by p'ayrr ent of the - .auto.: allowance p:ursbant to this Agreement, and shall
not be reimbursed as a business expense.
Page-4 of 7
8. Indemnification. Town agrees to defend, hold harmless and indemnify Larson against
any tort, professional liability claim or demand, or other legal action, whether groundless or
otherwise, arising out an alleged act or omission occurring in the performance of Larson's
duties. Town, at is direction, is not required to indemnify Larson for any illegal or criminal acts
committed by Larson.
9. Performance Review.
(a) Within thirty (30) days of the Effective Date, the Town Council shall establish its
performance expectations for Larson.
(b) The Town Council agrees to conduct annual reviews of Larson's performance on
or around the anniversary of the Effective Date. The objective of such review
shall be to maintain an optimal working relationship and a mutual understanding
and agreement on duties, responsibilities, and priorities between Larson and the
Town Council.
10. Bonding Requirements. Town shall bear full cost of the Fidelity Bond required of Larson
under any law or ordinance.
11. Other Terms and Conditions.
(a) The Council, in consultation with the Larson, shall fix any such other terms and
conditions of employment, as it may determine from time to time, relating to the performance
of Larson, provided such terms and conditions are not inconsistent with or in conflict with the
provision of this Agreement or State law.
(b) All provisions of the Town Code and regulations and rules of Town relating to
vacation and sick leave, retirement and pension system contributions, holidays and other fringe
benefits and working conditions pertaining to Town Department Heads as they now exist or
hereafter may be amended, except as otherwise set forth herein, also shall apply to Larson.
12. Severability. If any provision, or portions thereof, contained in this Agreement is held
unconstitutional, invalid or unenforceable, the remainder of this Agreement, or portion
thereof, shall be deemed severable and shall remain in full force and effect.
13. Notices.
(a) Notices pursuant to this Agreement shall be given by deposit in the custody of
the United Postal Services, postage prepaid, addressed as follows:
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Mayor and Town Council
Town of Los Gatos
Post Office Box 949
Los Gatos, CA 95030
Greg Larson,.Town Manager
Town of Los Gatos
Post Office Box 949
Los Gatos, CA 95030
(b) Notices also may be personally served in the same manner as applicable to civil
judicial practice.
(c) Notice shall be deemed given as of the date of personal service or as of the date
of deposit of such written notice in the course of transmission by the United State Postal
Service.
(d) Either party hereto may thangetheir respective address of record by providing
written notice thereof in accordance with this Section.
14. General Provisions.
(a) The text herein shall constitute the entire Agreement between the parties.
(b) No provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing by the Town and the Larson. No
waiver of either party at any time of the breach of, or lack of compliance with, any conditions or
provisions of this Agreement shall be deemed a waiver of other provisions or conditions hereof.
(c) This Agreement contains the entire agreement and understanding between the
parties and contains all of the terms and conditions of the,parties' agreement and supersedes
any other oral or written negotiations, discussions, representations, or agreements. Larson
acknowledges that s /he has not ,relied on any promises, statement, representations, or
warranties except as set forth expressly,in this - Agreement.
(d) This Agreement shall: be binding upon and shall inure to the benefit of the
respective heirs, executors, administrators, successors and assigns of the parties, provided;
however, that Larson may not assign his obligations hereunder.
(e) This Agreement shall be governed by and construed in accordance with the laws
of the State of California, and venue for any action concerning this Agreement shall be limited
to the Superior Court for the County of Santa Clara.
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(f) If any provision, or any portion thereof, contained in this Agreement is held
unconstitutional, invalid or unenforceable, the remainder of this Agreement, or portion
thereof, shall be deemed severable, shall not be affected and shall remain in full force and
effect.
(g) Unless provided for otherwise by this Agreement, all provisions of the Town
Code which are applicable to the Town Manager shall remain in full force and effect.
SECTION 2.
The following paragraphs are incorporated in this agreement to conform to new State laws
effective January 12, 2012, as follows:
Paragraph 15. Notwithstanding Paragraphs 4 and 5 above, Town shall not be obligated to pay,
and shall not pay, any amounts or continue any benefits under the provisions of Paragraphs 4
and 5 if Larson is terminated in the event Larson is convicted of a crime involving an abuse of
his office or position. Any paid leave salary offered by Town to Larson pending an investigation
shall be fully reimbursed by Larson if Larson is convicted of a crime involving an abuse of his
office or position. For the purposes of this section, "abuse of office or position" means and is
limited to the definition under Government Code section 53243.4 either of the following: (a) an
abuse of public authority including but not limited to waste, fraud, and violation of the law
under color of authority; or (b) a crime against public justice, including but not limited to, a
crime described in Title 7 (commencing with Section 92) of Part 1 of the California Penal Code.
Greg Larson
TOWN OF LOS GATOS
By: Steve Rice, Mayor
ATTEST:
Mazarin Vakharia, Clerk Administrator
Approved As To Form:
Judith Propp, Town Attorney
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