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Home My WebLink AboutD-5 Staff Report - First Amendment to Employment Agreement with City ManagerSCHEDULED ITEM D-5 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: MARCO A. MARTINEZ, CITY ATTORNEY FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES DATE: SEPTEMBER 16, 2019 SUBJECT: APPROVE ONE-TIME STIPEND AND ADOPT RESOLUTION APPROVING THE FIRST AMENDMENT TO THE CITY MANAGER EMPLOYMENT AGREEMENT TO PROVIDE ADDITIONAL FLEXIBLE BENEFIT PLAN CONTRIBUTIONS BACKGROUND: On April 1, 2018, the City entered into an employment agreement for City Manager services with Sergio Gonzalez. The City Council recently completed a performance evaluation of the City Manager’s performance since his hire date. That evaluation included discussion of the City Manager’s current salary and benefit package. The proposed actions adopt Resolution No. 2019-C31 approving the First Amendment to the City Manager Employment Agreement and Approve the First Amendment to the City Manager Employment Agreement to increase the amount of Flexible Benefit Plan contribution and authorize a one-time, non-pensionable compensation of 3% of base salary for Fiscal Year 2018/19 and 2019/20. RECOMMENDATIONS: Staff recommends the City Council take the following actions: 1)Adopt Resolution No. 2019-C31 approving the First Amendment to the City Manager Employment Agreement; and 2)Approve the First Amendment to the City Manager Employment Agreement to increase the amount of Flexible Benefit Plan contribution. 3)Approve a one-time, non-pensionable compensation of 3% of base salary for each Fiscal Years 2018/19 and 2019/20. APPROVED CITY COUNCIL 9/16/19 Adopt and Approve First Amendment to City Manager Employment Agreement September 16, 2019 Page 2 ANALYSIS: For over a year, the City has been in labor negotiations with six of its seven bargaining units and has successfully settled with five of those groups. The Council authorized one-time stipends of 3% of base salary amounts for Fiscal Years 2018/19 and 2019/20 for a total of 6%; these stipends are one time compensations and do not effect on schedule salary or retirement amounts. Whereas, the City Manager has been employed by the City for nearly 17 months with no change in compensation, the same one time stipend in accordance with recent labor negotiations is recommended. Additionally, approved labor contracts for bargaining units that previously provided one thousand three hundred forty six dollars ($1,346) for its members increased the City’s Flexible Benefit Plan Contribution amount to one thousand four hundred dollars ($1,400) in order to make movement towards providing more equitable health plan contributions in light of rising medical premiums. The recommended actions requests Council approval to amend the City Manager’s contract to provide the same $1,400 monthly Flexible Benefit Plan contribution. FISCAL IMPACT: The City Manager’s current annual salary is $214,000. The recommended stipend would result in a one- time pay-out of $12,840. Increasing the Flexible Benefit Plan contribution will result in an annual cost increase of $648. Cost for the recommended actions are included in the FY 2019/20 Adopted Budget. Prepared by: Reviewed and Approved: Talika M. Johnson Marco Martinez Director of Administrative Services City Attorney Attachments: 1) Resolution No. 2019-C31 Approving the First Amendment to the City Manager Employment Agreement 2) First Amendment to the City Manager Employment Agreement 45635.01000\29377035.1 RESOLUTION NO. 2019-C31 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, APPROVING THE FIRST AMENDMENT TO THE CITY MANAGER EMPLOYMENT AGREEMENT WHEREAS, on April 1, 2018, the City entered into the City Manager Employment Agreement with Sergio Gonzalez to serve as City Manager for the City of Azusa; and WHEREAS, the City Attorney has prepared the attached First Amendment to the City Manager Employment Agreement which amends the flexible benefit plan for Mr. Gonzalez’s employment as City Manager; and WHEREAS, in accordance with Azusa Municipal Code Chapter 2, Article III, Division 2, the City Council desires to approve the First Amendment to the City Manager Employment Agreement attached to this Resolution as Exhibit “A.” THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Approval of First Amendment to the City Manager Employment Agreement. The City Council approves the First Amendment to the City Manager Employment Agreement between the City of Azusa and Mr. Sergio Gonzalez, which is attached hereto as Exhibit “A” and incorporated herein by reference. SECTION 2. Effective Date. This Resolution shall take effect immediately upon adoption. PASSED, APPROVED and ADOPTED this 16th day of September 2019. ___________________________________ Joseph Romero Rocha Mayor ATTEST ____________________________________ Jeffrey L Cornejo, Jr. City Clerk Attachment 1 2 45635.01000\29377035.1 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2019-C31 was duly adopted by the City Council of the City of Azusa at a regular meeting thereof held on the 16th day of September 2019, by the following vote of the Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ____________________________________ Jeffrey L Cornejo, Jr. City Clerk __________________________________________ Best Best & Krieger LLP City Attorney 3 45635.01000\29377035.1 EXHIBIT “A” FIRST AMENDMENT TO THE CITY MANAGER EMPLOYMENT AGREEMENT [SEE ATTACHED] 45635.01000\29376722.1 CITY OF AZUSA FIRST AMENDMENT TO THE CITY MANAGER EMPLOYMENT AGREEMENT 1. PARTIES AND DATE This First Amendment to the City Manager Employment Agreement (“First Amendment”) is made and entered into as of September 17, 2019 by and between Sergio Gonzalez (hereinafter referred to as “City Manager” or the "Employee") and the City of Azusa, a municipal corporation of the State of California (hereinafter referred to as "City"). City and Employee may sometimes referred to individually as "Party" and collectively as "Parties" throughout this First Amendment. 2. RECITALS 2.1 Employment Agreement. On or about April 1, 2018, City and Employee entered into the City Manager Employment Agreement, setting forth the terms and conditions for City Manager services to be provided by the Employee to the City (“Employment Agreement”). 2.3 First Amendment. City and Employee now desire to amend the Employment Agreement for the first time in order to increase the amount of the City’s monthly Flexible Benefit Plan contribution. 2.4 Authority. This First Amendment is authorized pursuant to Section 12.1 of the Employment Agreement. 3. TERMS 3.1 Health and Medical Benefits. Effective September 1, 2019, Section 3.3 (Health and Medical Benefits) of the Employment Agreement is hereby deleted in its entirety and restated to read as follows: "3.3 Health and Medical Benefits. The City shall provide the City Manager with one thousand four hundred dollars ($1,400.00) per month (“Allowance”) for the City’s Flexible Benefit Plan. This plan can be used by the City Manager to pay, to the extent available, for the qualified benefits as determined by the IRS. The City Manager understands that, in the event the total monthly premiums and/or expenses for qualified benefits selected by him exceed the Allowance, the excess shall be deducted from pre-tax wages of the City Manager. This amount shall include the statutory minimum contribution for medical benefits as required by PEMCHA should the City Manager elect to participate in the Attachment 2 2 45635.01000\29376722.1 City’s PEMCHA health plan. Should the City Manager enroll in group health coverage through other sources not affiliated with the City, City Manager shall have the option to cash out up to $600.00 per month (maximum) in-lieu of medical insurance payments.” 3.2 Remaining Provisions. Except as amended by this First Amendment, all provisions of the Employment Agreement shall remain in full force and effect and shall govern the actions of City and Employee under this First Amendment. [SIGNATURES ON FOLLOWING PAGE] 3 45635.01000\29376722.1 IN WITNESS WHEREOF, the Parties have executed this First Amendment to the City Manager Employment Agreement as of the ______ day of September, 2019. EMPLOYEE By: _____________________________ Sergio Gonzalez CITY OF AZUSA By: _____________________________ Joseph R. Rocha Mayor Attest: By: _____________________________ Adrian Garcia CMC Chief Deputy City Clerk