HomeMy WebLinkAbout101-Severance Language Side Letter Agreement with Saratoga Management Organization.pdf SARATOGA CITY COUNCIL
MEETING DATE: May 18, 2011 AGENDA ITEM:
DEPARTMENT: Recreation & Facilities CITY MANAGER: Dave Anderson
PREPARED BY: Michael Taylor, Recreation & Facilities Director
DIRECTOR: Michael Taylor
SUBJECT: Severance Language Side Letter Agreement with Saratoga Management
Organization
RECOMMENDED ACTION(S):
Accept severance language side letter agreement with Saratoga Management Organization.
REPORT SUMMARY:
Severance language in the current Memorandum of Understanding (MOU) with the Saratoga Management Organization (SMO) calls for a lump sum payment within ten (10) days for
terminated employees.
Contrary to the intent of the severance clause, the burden of income tax liabilities for a lump sum
payment has proven detrimental to terminated employees. SMO and the City has negotiated a revised clause that allows either a lump sum, or bi-weekly payments, beginning within ten (10)
days of the effective date of termination. If a SMO member selects bi-weekly payments, the
SMO member may later choose to receive a lump sum payment for the balance of the monthly
severance payments. The change from bi-weekly payments to a lump sum payment for the
balance will be processed as soon as reasonably feasible and by no later than two weeks after the employee chooses to change to a lump sum payment for the balance. The severance payment
shall be based on the SMO member’s then monthly salary and incurs no additional cost to the
City. The side letter also clarifies and better defines the procedures for continuation of insurance
benefits for the terminated employee.
FISCAL IMPACTS: None.
CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION: Existing severance language in MOU will be executed.
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ALTERNATIVE ACTION:
Not applicable. FOLLOW UP ACTION:
The Human Resources Manager and Finance Department will execute the side letter agreement.
ADVERTISING, NOTICING AND PUBLIC CONTACT:
Pursuant to Government Code 54954.2, this item was properly posted as a City Council agenda
item and was included in the packet made available on the City’s website in advance of the
meeting. A copy of the agenda packet is also made available at the Saratoga Branch Library each Monday in advance of the Council meeting.
ATTACHMENTS:
A. City of Saratoga – Saratoga Management Organization Severance Side Letter Agreement