Agenda Packet - Tuesday, February 17, 2026
City of La Verne,City Council
Agenda Report
DATE: February 17, 2026
TO: Honorable Mayor and City Council
FROM: Christy Lopez, Finance Director
SUBJECT: Fiscal Year 2025-26 Mid-Year Budget Review.
SUMMARY
The Fiscal Year (FY) 2025-26 Budget was approved by the City Council on June 16, 2025.
Based on economic and operational changes that have occurred since then, the Finance Department is providing a mid-year financial update for the 2025-26 fiscal year. Updated estimates have resulted in net increases of $390,000 in revenue for the General Fund and $247,232 in expenditure increases for the General Fund, mainly due to building permit activity.
Details of the revenue and expenditure changes for all funds are listed in the Budget Adjustments listing.
RECOMMENDATION
That the City Council approve the resolution titled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA VERNE, CALIFORNIA, AMENDING THE FISCAL YEAR 2025-26 ADOPTED BUDGET TO ADJUST FOR MID-YEAR BUDGET ADJUSTMENTS," that incorporate the "Budget Adjustment Listing" as attached adjusting revenue and expenditure appropriations for the Fiscal Year 2025-26 budget.
DISCUSSION
Revenues – General Fund
The City’s three major General Fund revenue sources, Property Tax, Sales Tax, and Utility Users Tax, continue to track in line with adopted budget estimates, and no mid-year adjustments are proposed for these revenues.
In January, the City met with HDL Companies, the City’s property and sales tax consultant, to review updated sales tax information through the third quarter of calendar year 2025, which reflects sales activity from July through September 2025. While revenues remain below prior- year levels, they are generally consistent with current budget assumptions. The next formal property tax review is scheduled for the spring and will be incorporated into the next financial update. Based on receipts received to date, property tax revenues are trending as anticipated, except property transfer tax, which remains dependent on overall real estate transaction activity.
Revenues increased overall by $390,000 at mid-year, driven primarily by higher-than-budgeted building permit activity. Building permit revenue is projected to exceed the adopted budget by $360,000. However, total annual activity remains below the historical annual average of approximately $1.1 million and more than $700,000 below FY 2023–24 actuals of $1,706,006.
Agenda Packet - Tuesday, February 17, 2026
Fiscal Year 2025-26 Mid-Year Budget Review., Page 2
Building permit revenue is highly sensitive to development opportunities and broader economic conditions, and recent economic indicators suggest continued softening in construction activity.
Additional revenue growth is attributable to increased Fire Department paramedic insurance billing. In contrast, the Parks and Recreation Department is projecting a net decline in certain program revenues, primarily within the aquatics program. This decrease reflects lower participation levels, which staff attribute in part to increased competition from a newly established local indoor swim facility offering year-round swim instruction.
Revenues – Other Funds
Revenue adjustments are recommended for several other funds. Measure LV, which relies primarily on sales tax revenue, requires a downward adjustment of $183,000 due to lower-than- expected collections. The shortfall is largely attributable to reduced auto sales and does not impact the Bradley-Burns sales tax recorded in the General Fund, as the City does not have any auto dealerships. Vehicle use tax is collected at the time of purchase and allocated based on the purchaser’s residential zip code. The Fire Assignment Fund requires a substantial revenue adjustment due to the department’s increased participation in fire response activities supported by CalOES and federal fire agencies. This revenue increase of $586,600 is fully offset by a corresponding expenditure adjustment, as described in the Expenditure section.
Expenditures – General Fund
General Fund expenditures are generally tracking in line with the originally adopted budget.
Overall, year-end estimates are projected to exceed the original budget by approximately $63,268. Given the relatively minor variance when compared to larger fluctuations experienced in prior fiscal years, no broad mid-year expenditure adjustments are being recommended at this time. Specific items requested by departments will be addressed in the mid-year requests following the department summary table.
The Firefighter Pilot Program, approved by the City Council at the beginning of the fiscal year, has begun to show positive results during the final quarter of calendar year 2025, covering the period from October through December. Implementation of the program required the hiring and training of three new firefighters, which resulted in some initial ramp-up time. A more
Agenda Packet - Tuesday, February 17, 2026
Fiscal Year 2025-26 Mid-Year Budget Review., Page 3
comprehensive evaluation will be provided in the next financial update, when a full six months of operational data will be available to support a more complete analysis.
In addition, the Police Department has indicated that overtime expenditures are expected to decrease over the next three months as vacancies become filled. Given the anticipated changes in public safety staffing and the associated uncertainty in overtime trends, staff recommends no adjustments at this time for public safety overtime until additional data is available.
The table below summarizes projected year-end expenditure estimates by department. While certain departments are anticipated to exceed their adopted budgets, these overages are generally offset by anticipated savings in other departments. Included within the projected expenditures is approximately $365,000 in vacation payout costs related to employee retirements and separations, which are currently being absorbed within existing departmental budgets.
The mid-year requests outlined in the table below reflect specific items identified by departments.
Divisions 2001 through 2008, within the Fire Department, include mid-year requests totaling $23,000. These requests consist of $2,000 for equipment needs associated with changes in administrative staffing, $8,000 for miscellaneous equipment, and $13,000 for a professional services agreement for an EMS Medical Director.
Divisions 3001 through 3008, within the Community Development Department, include mid-year requests primarily related to increased building permit activity in the amount of $180,000, along with $15,000 for advertising costs associated with required State-mandated code updates.
Agenda Packet - Tuesday, February 17, 2026
Fiscal Year 2025-26 Mid-Year Budget Review., Page 4
The remaining mid-year requests are within the 6000 series and relate to the Parks and Recreation Department. These requests reflect adjustments to operations and part-time personnel costs resulting from the extension of a contract that expands programming at the Lutheran Gym, as well as staffing adjustments within the aquatics program.
Expenditures – Other Funds
Several non-General Fund adjustments are anticipated; these are adjustments tied to revenue fluctuations in funds such as the fire assignment, while others are due to projections that are anticipated to exceed the budgeted amounts. They are detailed in the table below.
Notable increases are primarily within the Fire Assignment Fund, which is supported by offsetting revenues directly correlated to fire assignment expenditure activity. Fire equipment costs reflect various operational needs, including replacement gurneys, extrication equipment batteries, uniforms, helmets, radio batteries, and costs associated with the migration from the National Fire Incident Report System to the National Emergency Response Information System, which will allow access to more complete incident and call data.
Agenda Packet - Tuesday, February 17, 2026
Fiscal Year 2025-26 Mid-Year Budget Review., Page 5
Another significant item is the request to establish a budget for risk management activities, which was inadvertently omitted during the original budget development process. These expenditures represent the City’s costs for liability and property insurance coverage.
The Risk Management Fund is structured as an Internal Service Fund. Internal Service Funds are used to account for services provided internally to multiple City departments, rather than services provided directly to the public. In this case, insurance coverage and risk management services are centrally administered and the associated costs are allocated to individual funds and departments based on established methodologies.
Revenues to support these costs are collected from the various operating and capital funds throughout the City and transferred into the Risk Management Fund. While these revenue transfers were included in the adopted budget, the corresponding expenditure appropriations within the Risk Management Fund were inadvertently omitted during the budget process. The requested budget adjustment will align expenditures with the already budgeted revenues, resulting in no net fiscal impact to the City as a whole.
Old Town Business Improvement District requests include a transfer to the Old Town Association for revenues collected from prior events, as well as an anticipated cost increase related to management of the Cool Cruise event. A minor adjustment is also requested within the Equipment Fund, which reflects an overall increase of $10,000 related to additional tire purchases and other automotive parts.
Report Conclusions
At mid-year, both General Fund revenues and expenditures are generally tracking in line with the adopted 2025-26 budget, with only limited and targeted adjustments recommended. Major revenue sources, including Property Tax, Sales Tax, and Utility Users Tax, remain consistent with budget assumptions, and overall expenditure projections reflect only a minimal variance from the original appropriations.
General Fund expenditures are currently projected to exceed the adopted budget by approximately $63,268. Given the relatively small scale of this variance, no broad mid-year expenditure adjustments are recommended beyond the specific departmental requests presented. Departmental overages are generally offset by savings in other areas, and one-time costs, such as vacation payouts associated with retirements and separations, continue to be absorbed within existing departmental budgets.
Mid-year expenditure trends within Public Safety also remain within expectations. While overtime levels continue to be monitored, the Police Department anticipates a reduction in overtime in the coming months as staffing levels increase. The Firefighter Pilot Program, approved at the beginning of the fiscal year, has begun to show positive operational results, with a more comprehensive assessment to be provided in the next financial update once additional data becomes available.
These mid-year results reflect, in part, several key decisions made during the original 2025-26 budget development process. An increase for public safety overtime was included in the adopted budget based on historical experience requiring additional overtime appropriations in prior years. Finance staff worked closely with the Public Safety Departments to estimate
Agenda Packet - Tuesday, February 17, 2026
Fiscal Year 2025-26 Mid-Year Budget Review., Page 6
overtime needs based on current staffing levels and known staffing adjustments, including military leave, injury leave, and family-related absences. While final results will not be known until year-end, mid-year indicators suggest this was a reasonable and well-supported estimate.
Although the budget is currently tracking as anticipated, it is important to note that the 2025-26 budget was balanced using certain one-time resources. These included $71,250 from General Fund reserves to offset the cost of a firefighter on military leave, $388,463 from interest surplus generated within the Section 115 Pension Stabilization Trust, and $618,149 from interest surplus generated within the Other Post-Employment Benefits trust. The use of these non- recurring resources reinforces the importance of continuing efforts toward long-term fiscal sustainability and maintaining a structurally balanced budget.
The relatively limited number of mid-year adjustments further reflects improvements in departmental budget development practices. Increased involvement of front-line staff in the budget process has contributed to more accurate forecasting, encouraged new approaches to operations, and supported improved fiscal discipline across the organization.
Overall, the mid-year financial position demonstrates prudent planning and coordination, while also underscoring the importance of continued fiscal responsibility and focus on long-term financial balance.
FISCAL ANALYSIS
The Budget Adjustments Listing shows details of the line-item changes being requested for approval. The total amount of appropriations needed within the General Fund budget will be $390,000 in revenue and $247,232 in expenditures. The total increase in appropriations in non- general fund revenues is $403,600 and the increase in non-general fund expenditures is $2,097,579. These amounts are requested to be added to the Fiscal Year 2025-26 Adopted Budget.
ENVIRONMENTAL ANALYSIS
Not applicable
LEGAL REVIEW
This report was reviewed and approved by the City Attorney.
ATTACHMENTS
1. Reso No. 26-XX, Mid-Year Budget Review
2. Fiscal Year 2025-26 Budget Adjustments Listing
Agenda Packet - Tuesday, February 17, 2026
RESOLUTION NO. 26-xx
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA VERNE, CALIFORNIA, AMENDING THE FISCAL YEAR 2025-26 ADOPTED BUDGET TO ADJUST FOR MID-YEAR BUDGET ADJUSTMENTS.
WHEREAS, the City Council has received and considered the proposed adjustments to the budget for Fiscal Year 2025-26, commencing July 1, 2025 and ending June 30,2026; and,
WHEREAS, the purpose of the Mid-Year Budget Adjustment
recommendations is to update the community on the financial condition of the City and recommend adjustments to the City’s Budget that have been identified following a review of actual activity through December 2025 and estimates through June 30,2026; and,
WHEREAS, the City Council has determined that it is necessary to adjust the expenditures and revenues of the current City budget.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of La Verne as follows:
Section 1. The City Council hereby amends the adopted Budget for Fiscal Year 2025-26 to adjust the expenditures and revenues as provided in attachment “Budget Adjustments Listing” adding $ in expenditure appropriations and $ in revenue appropriations across multiple funds.
Section 2. That the Mayor shall sign and the Deputy City Clerk shall certify to the passage and adoption of this Resolution and thereupon the same shall take effect and be in force.
PASSED, APPROVED AND ADOPTED this 17th day of February, 2026.
Mayor Tim Hepburn
ATTEST:
____________________________
Debra Fritz, Deputy City Clerk
Agenda Packet - Tuesday, February 17, 2026
Reso No. 26-xx Page 2 of 2
CERTIFICATION
I hereby certify that the foregoing Resolution No. 25-XX was duly and regularly adopted by the City Council of the City of La Verne at a meeting thereof held on the 17th day of February 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
____________________________________
Debra Fritz, Deputy City Clerk
Agenda Packet - Tuesday, February 17, 2026
Fiscal Year 2025-26
Account Rev/Exp Description Budget
Mid-Year
Adjustment
Adjusted
Budget Notes
101-2001-421.53-05 Expenditure COMMUNICATIONS / TELEPHONE SERVICES 12,000 450 12,450 Cell phone service for Deputy Chief 101-2001-421.61-18 Expenditure GENERAL SUPPLIES / COMPUTER HARDWARE 2,000 1,500 3,500 Unexpected vacancy for Battalion Chief 101-2002-421.61-18 Expenditure GENERAL SUPPLIES / COMPUTER HARDWARE 1,500 6,000 7,500 FD2017 funds to reimburse Engineer 101-2003-421.64-07 Expenditure MISC MATERIALS & SUPPLIES / UNIFORM/SAFETY EQUIPMEN 6,000 1,200 7,200 Potential for (2) additional AO vacancies 101-2005-421.61-22 Expenditure GENERAL SUPPLIES / BUILDING FIXTURES 15,500 1,200 16,700 Request per IT, costs split with LVPD,
Public Safety building callbox needs
101-2008-421.32-00 Expenditure FIRE / OTHER PROFESSIONAL 161,275 13,000 174,275 PSA with EMS Medical Director for 101-3001-432.69-11 Expenditure OTHER EXPENSE / MISCELLANEOUS EXPENSE 2,000 200 2,200 LAFCO Cost Increase 101-3003-432.31-05 Expenditure ADMINISTRATIVE/OFFICIAL / ADVERTISING SERVICES - 3,000 3,000 Advertising costs for State Mandated 101-3003-432.32-05 Expenditure OTHER PROFESSIONAL / ARCHITECTURAL & ENGINEER - 500 500 RKA Consulting was moved to PW 101-3003-432.32-08 Expenditure OTHER PROFESSIONAL / LEGAL FEES & COURT COSTS 20,000 15,000 35,000 Legal fees for City Attorney assistance 101-3004-434.32-05 Expenditure OTHER PROFESSIONAL / ARCHITECTURAL & ENGINEER 241,700 180,000 421,700 Increase of Building Permit Revenue 101-3005-432.31-05 Expenditure ADMINISTRATIVE/OFFICIAL / ADVERTISING SERVICES - 1,000 1,000 General Plan Advertising Bill for CC Ord 101-3008-432.32-08 Expenditure OTHER PROFESSIONAL / LEGAL FEES & COURT COSTS 4,000 (4,000) - Will use 3003 for all legal 101-6006-452.32-09 Expenditure OTHER PROFESSIONAL / OTHER CONTRACTURAL 47,000 16,000 63,000 Extension of contract for Lutheran Gym 101-6006-452.62-51 Expenditure ENERGY / ELECTRIC UTILITY 10,000 10,000 20,000 Extension of contract for Lutheran Gym 101-6006-452.62-52 Expenditure ENERGY / CITY UTILITIES-WATER - 10,000 10,000 Extension of contract for Lutheran Gym 101-6201-452.12-00 Expenditure CULTURAL & COMMUNITY SVCS / PART-TIME SALARIES 25,000 (3,000) 22,000 Part-time acuatics adj 101-6204-452.12-00 Expenditure CULTURAL & COMMUNITY SVCS / PART-TIME SALARIES 177,918 (8,918) 169,000 Part-time acuatics adj 101-6301-452.12-00 Expenditure CULTURAL & COMMUNITY SVCS / PART-TIME SALARIES 18,900 4,100 23,000 Includes the cost for senior special events 110-2010-421.10-00 Expenditure FIRE / REGULAR-FULL TIME - 75,000 75,000 Fire Assignment 110-2010-421.13-00 Expenditure FIRE / OVERTIME SALARIES 535,655 420,000 955,655 Fire Assignment 110-2010-421.20-00 Expenditure FIRE / FRINGE BENEFIT COST-REG 12,023 13,000 25,023 Fire Assignment 110-2010-421.20-28 Expenditure FRINGE BENEFIT COST-REG / PEPRA-EMPLR-FIRE - 5,000 5,000 Fire Assignment 110-2010-421.20-30 Expenditure FRINGE BENEFIT COST-REG / PERS-EMPLR-SAFETY-CLASSIC - 11,000 11,000 Fire Assignment 110-2010-421.20-32 Expenditure FRINGE BENEFIT COST-REG / POB CITY-SAFETY - 16,000 16,000 Fire Assignment 110-2010-421.20-35 Expenditure FRINGE BENEFIT COST-REG / UNFUNDED SAFETY CLASSIC - 5,000 5,000 Fire Assignment 110-2010-421.20-51 Expenditure FRINGE BENEFIT COST-REG / WORKERS COMP.PUBLIC SAFTY 2,871 15,000 17,871 Fire Assignment 110-2010-421.21-10 Expenditure RETIREE BENEFIT COSTS / RETIREE HEALTH INSURANCE - 2,900 2,900 Fire Assignment 110-2010-421.28-00 Expenditure FIRE / OTHER BENEFITS 5,576 5,000 10,576 Fire Assignment 110-2010-421.56-06 Expenditure TRAVEL & MEETINGS / LODGING 20,000 10,000 30,000 Fire Assignment 110-2010-421.56-07 Expenditure TRAVEL & MEETINGS / MILEAGE & TRANSPORTATION 15,000 4,000 19,000 Fire Assignment 110-2010-421.64-07 Expenditure MISC MATERIALS & SUPPLIES / UNIFORM/SAFETY EQUIPMEN 500 900 1,400 Fire Assignment 110-4501-445.20-00 Expenditure EQUIPMENT MAINTENANCE / FRINGE BENEFIT COST-REG - 1,300 1,300 Fire Assignment 110-4501-445.56-06 Expenditure TRAVEL & MEETINGS / LODGING 1,500 2,500 4,000 Fire Assignment 245-3201-430.32-09 Expenditure OTHER PROFESSIONAL / OTHER CONTRACTURAL 3,600 71,000 74,600 Association transfer 245-3201-430.54-06 Expenditure ADVERTISING / COMMUNITY PROMOTION 1,000 2,000 3,000 Cool cruise City of La Verne Mid-Year
Budget Adjustments Listing
Agenda Packet - Tuesday, February 17, 2026
Fiscal Year 2025-26
Account Rev/Exp Description Budget
Mid-Year
Adjustment
Adjusted
Budget Notes
City of La Verne Mid-Year
Budget Adjustments Listing
245-3201-430.69-71 Expenditure OTHER EXPENSE / CONTRIBUTIONS - 8,200 8,200 Other DBID costs 250-7044-510.61-21 Expenditure GENERAL SUPPLIES / RADIO SUPPLIES 2,000 14,500 16,500 Motorola Batteries 250-7044-510.61-23 Expenditure GENERAL SUPPLIES / MEDICAL SUPPLIES - 90,000 90,000 Replacement of (2) gurneys from our 250-7044-510.64-00 Expenditure CAPITAL PROJECTS / MISC MATERIALS & SUPPLIES - 8,000 8,000 Full Extrication Equipment set purchased
with OTS grant funds will require
250-7044-510.64-07 Expenditure MISC MATERIALS & SUPPLIES / UNIFORM/SAFETY EQUIPMEN 32,181 9,260 41,441 Class A ($1,200.00) and B ($1,600.00)
Uniforms, helmets (1 @ $500 ea, 1 @
$100 ea), shields ($100 ea), (2) badges
250-7044-510.69-18 Expenditure OTHER EXPENSE / SUBSCRIPTIONS,DUES,PERMIT 16,000 16,000 The migration from NFIRS to NERIS is
precluding us from accessing full call
624-4501-445.52-15 Expenditure INSURANCE / VEHICLE CLAIMS 20,000 (20,000) - No historical claims 624-4503-445.43-09 Expenditure REPAIRS & MAINT SERVICES / CONTR/MAINT-AUTO & WRK E 85,000 40,000 125,000 To cover high price item replacements 624-4503-445.63-07 Expenditure MATERIAL-AUTO & WORK EQUI / TIRES 45,000 10,000 55,000 Additional tires needed based on current
replacement needs
624-4505-445.62-08 Expenditure ENERGY / DIESEL 120,000 (20,000) 100,000 Historical amount under 100,000 625-1302-402.52-00 Expenditure CITY MANAGER / INSURANCE - 1,082,019 1,082,019 Missed during annual budget 625-1600-405.69-70 Expenditure OTHER EXPENSE / CLAIM SETTLEMENT 120,000 200,000 320,000 Missed during annual budget 101-0000-322.15-15 Revenue BUILDING PERMITS / BLDG INSP/CODE ENFORCEMNT 581,000 360,000 941,000 Tracking higher 101-0000-342.15-10 Revenue FIRE / INS. BILLING - PARAMEDICS 1,800,000 80,000 1,880,000 Tracking higher 101-0000-346.11-03 Revenue AQUATICS PROGRAMS / AQUATICS/SWIM LESSONS 300,000 (90,000) 210,000 Decrease in registration due to new local
swim schools.
101-0000-346.12-00 Revenue CULTURAL & RECREATION / RECREATION EXCURSIONS 64,100 8,000 72,100 Sports Programs – New Projected,
$72,000. No 5on5 Adult League this fiscal
year.
101-0000-364.10-19 Revenue RENTAL OF CITY PROPERTY / MISC PARK RENTALS-SPORTS 53,000 32,000 85,000 Extension of contract for Lutheran Gym 107-0000-313.12-00 Revenue SALES TAX / MEASURE LV 5,087,000 (183,000) 4,904,000 HDL 1-21-2026 110-0000-341.15-12 Revenue WORK FOR OTHERS / FIRE DEPARTMENT 914,358 586,600 1,500,958 Fire Assignment
Agenda Packet - Tuesday, February 17, 2026
City of La Verne,City Council
Agenda Report
DATE: February 17, 2026
TO: Honorable Mayor and City Council
FROM: JR Ranells, Assistant City Manager
SUBJECT: AMENDED EMPLOYMENT AGREEMENT WITH CITY MANAGER.
SUMMARY
The City Council conducts an annual performance evaluation of the City Manager. As a result of the evaluation, the City Council is asked to consider an Amended Employment Agreement that includes an increase in the monthly vehicle allowance to $650, an increase in the monthly retiree health savings contribution to $150, and authorization for an additional annual vacation accrual cash-out of up to 40 hours. The City Manager has voluntarily elected to forgo a previously approved 2.5% merit step increase.
RECOMMENDATION
That the City Council approve an “AMENDED EMPLOYMENT AGREEMENT - CITY MANAGER,” providing the City Manager certain benefits based on a positive performance evaluation.
DISCUSSION
The City Council approved the employment of Ken Domer as City Manager on November 21, 2022, and he commenced employment with the City on December 19, 2022. In accordance with the City Manager’s employment agreement, the City Council conducted an annual performance evaluation and subsequently directed the City Attorney’s Office to prepare an amendment to the employment agreement for City Council consideration at a Regular City Council meeting under Other Matters.
Based on the City Council’s direction following the performance evaluation, the following amendments to the employment agreement are presented for consideration:
• An increase in the City Manager’s monthly vehicle allowance from $612 to $650. • An increase in the City’s monthly retiree health savings contribution on behalf of the City Manager from $100 to $150.
• Authorization for an additional annual vacation accrual cash-out of up to 40 hours.
Agenda Packet - Tuesday, February 17, 2026
Amended Employment Agreement with City Manager., Page 2
It should be noted that the City Manager has voluntarily elected to forgo a previously approved
2.5% merit step increase associated with the annual performance evaluation representing a cost savings.
The employment agreement will be amended to incorporate these changes.
FISCAL ANALYSIS
The fiscal impact of the vehicle allowance and retiree health savings contributions are estimated to be $440 for the remainder of Fiscal Year 25-26 and will be $1,056 on an annualized basis going forward. The vacation accrual is already a financial responsibility of the City, resulting in a negligible financial impact from the additional vacation cash out allowance. At this time, no budget appropriation is required as the Fiscal Year 2025-26 amounts will be absorbed within the Administration Department budget.
ENVIRONMENTAL ANALYSIS
Not applicable.
LEGAL REVIEW
The City Attorney has reviewed and approved this item.
ATTACHMENTS
1. DRAFT - Amendment #3 to CM Agreement 021726
2. City Manager KD Amended and Restated Employment Agreement
Agenda Packet - Tuesday, February 17, 2026
AMENDMENT TO
“EMPLOYMENT AGREEMENT
CITY MANAGER”
This Third Amendment to the Employment Agreement City Manager (“Third Amendment”) is made and entered into this 17 th day of February, 2026, by and between the City of La Verne (“City”) and Kenneth Domer (“Employee”). This Third Amendment revises the “Employment Agreement City Manager” (“Original Agreement”) entered into on November 21, 2022, and amended on February 5, 2024, and amended and restated on January 21, 2025.
A. Recitals
a. The City Council has conducted a performance evaluation of the City Manager. b. Proposed compensation and benefit provisions align with the financial sustainability efforts of the City and the desire to retain City Manager in his position for stability to the organization.
c. Based on performance to date, City finds the City Manager meeting or exceeding performance criteria and has discussed this performance evaluation with him in Closed Session.
d. The City Council desires to increase the car allowance by $38 a month to $650 a month. e. The City Council desires to provide an additional week of employee vacation cash out for the City Manager for a total of 80 hours.
f. The City Council desires to increase the offering of a medical savings trust to the City Manager in-lieu of any retiree medical contribution by $50 a month, to a total of $150. g. The City Council acknowledges that a previously agreed merit increase of 2.5% is being waived by the City Manager.
h. The City Council has completed Employee’s initial evaluation and the changes in this Third Amendment are appropriate.
B. Amendment. The following sections of the Amended and Restated Employment Agreement are hereby revised to provide as follows:
SECTION 4. BENEFITS. EMPLOYEE shall receive all employee benefits provided now or in the future to City department director executive employees. EMPLOYEE shall be entitled to the optional benefits regarding waiver of medical insurance as provided in Administrative Regulation No. 306. EMPLOYE shall be allowed up to 80 hours of vacation cash out per year related to Administrative Regulation No. 310 VACATION CASH OUT.
SECTION 5. CAR ALLOWANCE. EMPLOYEE shall receive a car allowance of $650 per month. EMPLOYEE shall provide his own vehicle, insurance, fuel, registration and maintenance. EMPLOYEE may use any CITY provided electrical outlet or electric vehicle charging system to allow EMPLOYEE to charge his personal vehicle.
Agenda Packet - Tuesday, February 17, 2026
Amendment Number 3 to Employment Agreement – City Manager
SECTION 13. ADDITIONAL BENEFITS. EMPLOYEE shall be enrolled in a City sponsored Retiree Medical Savings Trust and the CITY will contribute $150 per month to the retiree health savings plan on EMPLOYEE’s behalf. Contributions will begin the first full pay period after effective date of this Agreement.
C. Remainder of Terms. Except as expressly modified herein, the remaining provisions of the Amended and Restated Employment Agreement City Manager remain in full force and effect.
IN WITNESS WHEREOF, the CITY has caused this Third Amendment to be signed and executed on its behalf by its Mayor, and duly attested by its Deputy City Clerk, and EMPLOYEE has signed and executed this Third Amendment on the date first above written.
CITY OF LA VERNE
_______________________________
Tim Hepburn, Mayor
ATTEST:
________________________________
Debra Fritz, Deputy City Clerk
APPROVED AS TO FORM:
________________________________
Kimberly Hall Barlow, City Attorney
EMPLOYEE
_______________________________
Kenneth Domer
Agenda Packet - Tuesday, February 17, 2026
5 AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
CITY MANAGER
THIS AMENDED AND RESTATED AGREEMENT, is made and entered into this 21st day of January, 2025, by and between the CITY OF LA VERNE (" CITY") and KENNETH A.
DOMER (" EMPLOYEE").
WHEREAS, the CITY has employed EMPLOYEE to serve asCity Manager since December 19, 2022, and after an annual performance review, desires to amend the AGREEMENT ; and WHEREAS, the CITY and EMPLOYEE entered into AMENDMENT # 1 TO EMPLOYMENT AGREEMENT on February 5, 2024, and with these changes will amend and restate the current AGREEMENT in effect; and
WHEREAS, the City Council has conducted a performance evaluation of the EMPLOYEE and reviewed compensation and benefits for positions in similar and comparable cities; and
WHEREAS, the proposed compensation and benefit provisions align with the financial sustainability efforts of the City and the desire to retain EMPLOYEE in his position for stability to the organization; and
WHEREAS, based on performance to date, City Council desires to provide a standard merit increase of 5% for the EMPLOYEE, in similar fashion to step increases for other City employees, for his performance during the evaluation period, and to establish a scheduledmerit increasestepof 2.5% if approvedby City Council basedon future annual performance evaluation reviews; and
WHEREAS, the City Council desires to continue the professional development of the EMPLOYEE through the establishmentof a higher education tuition allowance for participation Docusign Envelope ID: EA6C00D0- B728- 4AFD- B7D9- 0E9F896A193A
Agenda Packet - Tuesday, February 17, 2026
5 in a doctoral studies program relevant to municipal governance and authorize EMPLOYEE to teach a public administration course during his employment; and WHEREAS, the City Council desires to contribute to a retirement health savings trust account on behalf of the EMPLOYEE in- lieu of any other retiree medical post- employment benefit; and
WHEREAS, the City Council desires to extend the contract of the EMPLOYEE to December 19, 2028.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties agree as follows:
1. DUTIES. CITY hereby employs EMPLOYEE as City Manager and EMPLOYEE shall have all of the duties of the City Manager specified in state law, the La Verne Municipal Code and all other policies and procedures of the CITY.
2. TERM. The term of this Agreement shall terminate on EMPLOYEE' S anniversary date December 19, 2028. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of the City Council to terminate the services of EMPLOYEE at any time, subject only to the provisions set forth in paragraph 9 hereof. During the term of this Agreement, EMPLOYEE shall remain in the exclusive employ of the CITY, except as otherwise allowed by this Agreement . EMPLOYEE shall give the CITY at least one month' s written notice in advance in the event EMPLOYEE voluntarily resigns his position with the CITY prior to the expiration of the aforesaid term of employment.
3. SALARY. Effective on the first day of the full pay period following execution of this Agreement, the salary for EMPLOYEE shall be $263,681 per year, reflecting a 5% merit increase.
This salary may be adjusted by the City Council after EMPLOYEE’S ANNUAL EVALUATIONS. Merit step increases, based on a positive future annual performance evaluation, shall be two- and one-half percent ( 2.5%), payable beginning the first pay period after the annual performance evaluation.
Docusign Envelope ID: EA6C00D0- B728- 4AFD- B7D9- 0E9F896A193A
Agenda Packet - Tuesday, February 17, 2026
5 City Manager shall be eligible for cost- of- living adjustments (" COLA") approved by the City Council in and for 2025 and thereafter. The amount of the COLA provided to the City Manager shall be equal to the COLA, if any, afforded to all City department director executive employees by resolution of the Council, and shall be effective the same date as such COLA s are provided to all City department director executive employees.
4. BENEFITS. EMPLOYEE shall receive all employee benefits provided now or in the future to City department director executive employees. EMPLOYEE shall be entitled to the optional benefits regarding waiver of medical insurance as provided in Administrative Regulation No. 306.
5. CAR ALLOWANCE. EMPLOYEE shall receive a car allowance of $ 612 per month.
EMPLOYEE shall provide his own vehicle, insurance, fuel, registration and maintenance.
EMPLOYEE may use any CITY provided electrical outlet or electric vehicle charging system to allow EMPLOYEE to charge his personal vehicle.
6. CONTRIBUTION TO PERS RETIREMENT COSTS. EMPLOYEE shall be responsible for paying the full eight percent (8%) of his member contribution to PERS in addition to a two percent 2%) cost share of the employer portion, for a total contribution of ten percent (10%).
7. VACATION. EMPLOYEE shall accrue vacation leave at the rate of 180 hours per year.
The maximum accrued vacation leave shall be 400 hours.
8. ANNUAL EVALUATION. EMPLOYEE and CITY agree that EMPLOYEE' S performance will be evaluated annually. The parties intend for this evaluation process to be comprehensive and based upon criteria that is mutually agreed upon.
9. TERMINATION AND SEVERANCE.
A) This Agreement may be terminated by the City Council for cause. After giving notice to EMPLOYEE that this Agreement is terminated for cause, the CITY shall have no obligation to continue the employment of EMPLOYEE or to provide compensation or benefits, including severance.
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Agenda Packet - Tuesday, February 17, 2026
5 For purposes of termination, " cause" is defined as willful breach of duty by EMPLOYEE in the course of employment or habitual neglect of duty by EMPLOYEE in the course of employment or continued incapacity of EMPLOYEE to perform the duties of employment as City Manager. Cause may also include EMPLOYEE being charged with, or entering a guilty plea or plea of nolo contendere to, or being convicted of, an offense which is a felony or crime of moral turpitude in the State of California; EMPLOYEE' s willful misconduct or gross negligence; or EMPLOYEE' s act of material dishonesty with or theft from the CITY.
B) In the event EMPLOYEE is terminated without cause, EMPLOYEE shall be entitled to receive an amount equal to the EMPLOYEE’ s monthly salary multiplied by the number of months left on the unexpired term of the contract, up to a maximum of twelve ( 12) months’ salary, as severance pay.
EMPLOYEE shall also be entitled to payout of all accrued paid leave and benefits. Provided, however, that in the event EMPLOYEE is terminated because of his conviction of any illegal act involving personal gain to him, then, in that event, CITY shall have no obligation to pay such salary and benefits provided for in this paragraph.
All payments required under Section 9 are subject to and shall be interpreted to comply with the limitations set forth in Government Code Section 53260 , and shall be reported in full compliance with all statutes and rules governing the California Public Employees Retirement System . Further, in the event EMPLOYEE is convicted of a crime involving an abuse of office or position, EMPLOYEE shall reimburse the CITY for any paid leave or cash settlement ( including severance), as provided by Government Code Sections 53243- 53243.4.
10. REIMBURSEMENT TO CITY REQUIRED
Notwithstanding the foregoing, the following provisions requiring reimbursement for certain compensation and/or indemnification provided to EMPLOYEE by the CITY apply:
A) Paid Leave:
Pursuant to Government Code section 53243, in the event that EMPLOYEE is convicted of a crime involving the abuse of his office or position, as defined by Government Code section 53243.4, with the CITY, any paid leave or salary provided by the CITY for the time period in which the EMPLOYEE is under investigation for such crimes shall be fully reimbursed by EMPLOYEE to the CITY.
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Agenda Packet - Tuesday, February 17, 2026
5 B) Legal Defense:
Pursuant to Government Code section 53243.1, in the event that EMPLOYEE is convicted of a crime involving abuse of his office or position, as defined by Government Code section 53243.4, EMPLOYEE shall fully reimburse the CITY for all the costs of his legal criminal defense if a defense has been provided at CITY expense.
C) Severance:
Pursuant to Government Code section 53243.2, in the event that EMPLOYEE is convicted of a crime involving abuse of his office or position, as defined by Government Code section 53243.4, EMPLOYEE shall fully reimburse the CITY for any cash settlement, including but not limited to severance pay, paid to EMPLOYEE related to his termination under this Agreement.
11. PROFESSIONAL DEVELOPMENT. CITY will allocate sufficient funds to pay the actual expenses of EMPLOYEE' S necessary costs for travel, registration, lodging and meals when representing the CITY at conferences and meetings authorized by the City Council in accordance with the City’ s expense reimbursement policy . CITY will allocate sufficient funds to pay EMPLOYEE' s memberships in professional organizations relevant to his management duties.
12. HIGHER EDUCATION TUITION ALLOWANCE. To support City Manager' s furtherance of his professional development, effective July 1, 2025, City Manager shall receive: ( 1) a higher education tuition allowance, not to exceed $ 12,000 per fiscal year and as budgeted for participation in a graduate university doctoral program in Public Administration (" Program"). The benefits conferred in this Section are contingent upon the City Manager' s continued employment as City Manager as forth below until at least December 19, 2028.
In the event City Manager resigns from his employment as City Manager and terminates this Agreement prior to December 19, 2028, City Manager shall reimburse City such tuition allowance expended during that budget fiscal year within thirty days from separation of employment.
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Agenda Packet - Tuesday, February 17, 2026
5 EMPLOYEE, upon conferring with the City Council, is authorized to teach a public administration course during his employment, which shall not interfere with his duties as City Manager.
13. ADDITIONAL BENEFITS. EMPLOYEE shall be enrolled in a City sponsored Retiree Medical Savings Trust and the CITY will contribute $ 100 per month to the retiree health savings plan on EMPLOYEE’ s behalf. Contributions will begin the first full pay period after effective date of this Agreement.
14. HOURS OF WORK. It is recognized that EMPLOYEE must devote a great deal of his time outside normal office hours to business of the CITY, and to that end EMPLOYEE will be allowed reasonable flexibility with respect to hours in the office.
15. NO REDUCTION IN BENEFITS. CITY shall not, at any time during the term of this Agreement, reduce the salary, compensation, or other financial benefits of EMPLOYEE except in the same proportion applied across the board for all employees of CITY.
16. ATTORNEY' S FEES. In the event that any legal action, including an arbitration proceeding, is commenced to enforce or interpret the terms or conditions of this Agreement, the prevailing party shall, in addition to any other relief and costs, be entitled to reasonable attorney' s fees.
17. AT WILL EMPLOYMENT. EMPLOYEE is an " at will" EMPLOYEE, subject to the provisions of this Agreement.
18. DEFENSE AND INDEMNIFICATION. CITY will indemnify and defend EMPLOYEE against any third- party claims prosecuted against EMPLOYEE for actions taken in the course and scope of his official duties.
19. GENERAL PROVISIONS.
a. This Agreement shall be binding upon and inure to the benefit of the assigns, beneficiaries, heirs at law and executorsof EMPLOYEE.
b. The parties have participated jointly in the negotiation and drafting of this Agreement Docusign Envelope ID: EA6C00D0- B728- 4AFD- B7D9- 0E9F896A193A
Agenda Packet - Tuesday, February 17, 2026
5 and have had an adequate opportunity to review each and every provision of the Agreement and submit the same to counsel or other consultants for review and comment. In the event an ambiguity or question of intent or interpretation ariseswith respectto this Agreement, this Agreement shall be construedasif drafted jointly by the parties and in accordancewith its fair meaning. There shall be no presumption or burden of proof favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
c. If any provision of this Agreement shall beheld invalid, it is the intention of the parties that the remainder shall neverthelessbe deemedvalid and effective.
IN WITNESS WHEREOF, the CITY has caused this Agreement to be signed and executedon its behalf by its Mayor, and duly attestedby its Deputy City Clerk, and EMPLOYEE has signed and executed this Agreement on the date first above written.
CITY OF LA VERNE
Tim Hepburn, Mayor
ATTEST:
Debra Fritz, Deputy City Clerk
APPROVED AS TO FORM:
Kimberly Hall Barlow, City Attorney
EMPLOYEE
Kenneth Domer
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Agenda Packet - Tuesday, February 17, 2026