TO: CITY COUNCIL
FROM: ALISHA PATTERSON, CITY ATTORNEY
DATE: FEBRUARY 25, 2025
SUBJECT:
Title
THIRD AMENDMENT TO THE CITY MANAGER EMPLOYMENT AGREEMENT AND RESOLUTION APPROVING A ONE-TIME MERIT AWARD FOR THE CITY MANAGER (FUNDING SOURCE: GENERAL FUND)
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SUMMARY
The City Manager Employment Agreement generally provides City Manager, Adam Pirrie with the same cost of living adjustments and fringe benefits as Department Head employees who are part of the Claremont Management Association (“CMA”). However, the Agreement deviates from this structure and, instead, caps the City’s contributions towards Mr. Pirrie’s health, dental and vision insurance at $1,294 per month. For Department Head employees, the City’s monthly contribution for health insurance, including medical, dental, and vision insurance has increased to $1,500 (through June 30, 2027). If approved, the proposed Third Amendment to the City Manager Employment Agreement (Attachment A) would allow Mr. Pirrie to receive the same monthly contribution for health insurance, including medical, dental, and vision insurance as Department Head employees.
The First Amendment to City Manager Adam Pirrie’s Employment Agreement requires the City Council to perform an annual employee evaluation. The City Council conducted this evaluation on January 28, 2025. The City Council unanimously agreed that Mr. Pirrie is doing an excellent job as City Manager in managing projects, maintaining a strong financial situation, and serving as a leader both within the City organization and in the community.
The City Council directed the City Attorney to prepare the necessary documents to incentivize continued excellence in Mr. Pirrie’s performance with a one-time merit award. A proposed resolution approving the merit award of eight percent of Mr. Pirrie’s base salary, or $20,929.00 is attached for the City Council’s consideration (Attachment B).
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Approve the Third Amendment to the City Manager Employment Agreement and authorize the Mayor to execute the Third Amendment; and
B. Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, APPROVING A MERIT AWARD FOR EXCELLENT CITY MANAGER PERFORMANCE.
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ALTERNATIVES TO RECOMMENDATION
In addition to the recommendation, there are the following alternatives:
A. Do not approve the attached Third Amendment to City Manager Employment Agreement.
B. Do not adopt the attached resolution.
C. Direct the City Attorney to make changes to the attached Third Amendment, or the attached resolution, or both.
FINANCIAL REVIEW
The increased cost of making the City’s monthly contribution to the City Manager’s medical, dental, and vision insurance the same as the monthly contribution the City provides to Department Head employees is $2,472.00 per year through June 30, 2027.
In lieu of a merit increase to the City Manager’s base salary, which would result in an ongoing increase in salary and benefit costs, the City Council opted to provide Mr. Pirrie with a one-time merit award. The City Council’s adoption of the attached resolution will authorize the payment of a merit award of $20,929.00, equal to eight percent (8%) of Mr. Pirrie’s current base salary. The total cost to the City for the merit award amounts to $21,232.47, which includes a 1.45 percent Medicare cost. It is important to note that the one-time merit award is not reportable as compensation for the purpose of calculating retirement benefits under the City’s plan with the California Public Employees’ Retirement System (CalPERS).
The costs to research this issue, prepare documentation and complete this report are estimated to be $500. These costs are in staff time and are included in the operating budget of the Administrative Services Department.
ANALYSIS
The City Manager is employed by a City Manager Employment Agreement, as approved by the City Council February 23, 2021. The Employment Agreement outlines the City Manager’s salary and benefits and requires annual performance evaluations. The Agreement has been amended twice previously. The First Amendment (February 8, 2022) extended the term of the contract to February 23, 2026 and changed the deadline for annual performance evaluations from July 31 to March 31. The Second Amendment (April 8, 2024) extended the term of the contract to February 23, 2028.
Per Sections 2.2 and 4 of the Employment Agreement, the City Manager generally receives the same cost of living adjustments and fringe benefits as Department Head employees who are part of the Claremont Management Association (“CMA”) (or the most comparable successor bargaining unit). However, Section 4 of the Agreement deviates from this structure and, instead, caps the City’s contributions towards the City Manager’s health, dental and vision insurance at $1,294 per month. For Department Head employees who are part of the CMA, the City’s monthly contribution for health insurance, including medical, dental, and vision insurance has increased over the years to $1,500 (through June 30, 2027). The proposed Third Amendment (Attachment A) would amend the Agreement to allow the City Manager to receive the same monthly contribution for health insurance, including medical, dental, and vision insurance as Department Head employees who are part of the CMA.
In accordance with Section 3.2 of the Employment Agreement, as amended by Section 2 of the First Amendment, the City Council conducted an annual performance evaluation of the City Manager on January 28, 2025. The results were excellent. The City Council would like to retain the City Manager and incentivize him to continue to exceed expectations. As a result, the City Council directed the City Attorney to prepare a resolution approving a merit award for the City Manager.
The proposed resolution provides for a one-time merit award in the amount of eight percent of Mr. Pirrie’s base salary ($20,929.00), plus a 1.45 percent Medicare cost of $303.47.
LEGAL REVIEW
This report and the attached contract amendment and resolution were prepared by the City Attorney.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents: Council Priorities, General Plan, and the 2024-26 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by:
Alisha Patterson
City Attorney
Attachments:
A - Proposed Third Amendment to City Manager Employment Agreement
B - Proposed Resolution