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SARATOGA CITY COUNCIL
MEETING DATE: July 6, 2011 AGENDA ITEM:
DEPARTMENT: City Attorney CITY MANAGER: Dave Anderson
PREPARED BY: Deanna Mouser DIRECTOR: Richard Taylor Chief Labor Negotiator City Attorney
SUBJECT: City Manager Voluntary Benefits Waiver
RECOMMENDED ACTION:
Adopt resolution and authorize the Mayor to sign an agreement documenting the City Manager’s
offer to voluntarily waive certain benefits specified in his employment agreement.
BACKGROUND: Last fiscal year, in light of significant revenue shortfalls to the City due to economic conditions
and state fiscal policies, the City Manager offered to forego the following benefits to which he
was otherwise entitled for the 2010-2011 fiscal year:
• An annual cost of living adjustment in salary;
• An annual salary increase contingent on satisfactory performance;
• A monthly car allowance; and
• The right to sell back accrued leave.
That agreement has now expired.
Recognizing that the City is still enduring a period of difficult economic conditions and
recognizing that significant structural changes to employee benefits are necessary for the long-
term fiscal health of the City, the City Manager has voluntarily agreed to the following items for long-term savings and short-term savings:
Long-term:
• The successor of the incumbent City Manager will be subject to a second tier plan of 2% at
age 60 using a three-year average compensation to determine retirement benefits.
• The successor of the incumbent City Manager will be subject to limitation on the City’s
contribution for medical insurance including a specific amount set for each tier of coverage,
with the employee paying the amount above the City’s contribution level. ($600 for
employee only, $1200 for employee and one dependent, and $1500 for employee and two or more dependents).
Short-term:
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• Effective July 1, 2011, the City Manager will contribute 7% of his compensation on a
pre-tax basis for the employee share of the CalPERS retirement program.
• Effective July 1, 2011, the City Manager will reduce his car allowance by $125 per month and receive an allowance of $375 per month.
The City Manager made this offer voluntarily and was not asked to do so by any City
representative or member of the City Council. The City Manager understands and agrees that the City’s acceptance of this offer to forego the benefits described above will not constitute a reduction in salary or benefits for the purposes of section III.A.2 of the City Manager’s current
employment agreement.
FISCAL IMPACTS:
In FY 2011-12, there will be a savings of approximately $14,580.00. In addition, there will be
ongoing cumulative savings each subsequent year.
CONSEQUENCES OF NOT FOLLOWING THE RECOMMENDED ACTIONS: The City Manager would continue to receive benefits as per his unmodified contract.
ALTERNATIVE ACTION(S):
N/A
FOLLOW UP ACTION(S): Payroll schedule will be adjusted to deduct the employee portion of the CalPERS contribution
from the gross salary of the City Manager and will register a $125 per month reduction in the
amount of auto allowance granted.
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 web site 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:
1. Resolution
2. Agreement Modifying City Manager Employment Contract