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HomeMy WebLinkAbout02 - Proposed Modifications to City Manager Employment AgreementCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 2 December 18, 2007 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Council Ad Hoc Compensation Committee Mayor Ed Selich Council Member Steve Rosansky Council Member Don Webb SUBJECT: Proposed Modifications to City Manager Employment Agreement RECOMMENDATION: Approve the Proposed Employment Agreement for the Newport Beach City Manager. DISCUSSION: The City Manager has been provided his annual work performance evaluation for 2007, and has had an opportunity to dialogue with the City Council as to its contents. Both parties found the process to be both constructive and positive. In the December 11, 2007, Closed Session the City Council appointed us to be the City Council's negotiation team with the City Manager to reach mutually acceptable terms and conditions for a new employment agreement with City Manager Homer Bludau. As you know, the Brown Act does not allow the City Manager to negotiate salary and employment conditions with the complete City Council; thus, a committee of less than a quorum of the City Council serves as the negotiation team. At the time of this memo, we have not concluded our negotiations with the City Manager; however, we hope to do so and have a recommendation to you for the December 18, 2007, Closed Session, so Council action can be completed as part of the December 18, 2007, Council agenda. The terms and conditions of the employment agreement would be made public at that time. Should that not happen, we intend to pull this item from the agenda and continue it until a future City Council meeting, when all discussions are completed. Ed 1-)he)0 -? - *D SIXTH AMENDED EMPLOYMENT AGREEMENT This Sixth Amended Employment Agreement (Sixth Amended Agreement), which is effective as of the 1st of September, 2007, between the City of Newport Beach ( "City ") and Homer Bludau ( "BLUDAU ") is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of City of Newport Beach (Original Agreement); B. The Original Agreement was amended first on February 28, 2000 (First Amended Agreement) and both the Original Agreement and the following five Amended Agreements required periodic evaluation of BLUDAU's performance as City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU's performance over the past twelve months and has determined that his performance warrants an increase in salary and modification of other benefits as specified in this Sixth Amended Agreement. Now, therefore, the Parties agree as follows: SECTION 1 Employment as City Manager City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cites generally and are performed by management employees of other municipalities. SECTION 2 Effective Date/Term This Sixth Amended Agreement shall take effect September 1, 2007, and remain in effect until September 1, 2009, or until amended by the Parties or terminated pursuant to Section 4. SECTION 3 Base Compensation City shall pay BLUDAU an annual base salary of $218,338.00, effective September 1, 2007, in twenty -six (26) equal installments paid at the same time other management employees of the City are paid. Effective September 1, 2008, BLUDAU's annual base salary will increase by 4.5% and remain in effect until this agreement is changed by City Council action. This Sixth Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold from BLUDAU's base salary any and all sum required for federal or state income tax, social security tax and all other taxes, deductions or withholdings required by then current state, federal or local law. City shall also deduct sums BLUDAU is obligated to pay because of BLUDAU's participation in plans or programs generally described in Section 5 of this Sixth Amended Agreement. SECTION 4 Termination and Severance Pay A. BLUDAU may terminate this Sixth Amended Agreement by giving the City at least one hundred and twenty (120) days prior written notice of termination. B. City may terminate this Sixth Amended Agreement, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular or special meeting of the City Council. However, consistent with provisions of the City Charter, this Sixth Amended Agreement may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Sixth Amended Agreement, and any reasons for termination, if deemed appropriate by the City Council, at least forty -five (45) days prior to the effective date of termination. C. In the event this Sixth Amended Agreement is terminated by the City, BLUDAU shall, as of the effective date of termination, receive severance pay equal to one -half (112) of his then current annual base salary. However, BLUDAU shall not be entitled to any severance pay if this Sixth Amended Agreement is terminated because of BLUDAU's criminal conduct, malfeasance in office, or gross abuse of discretion. SECTION 5 Employee Benefits A. BLUDAU shall continue to accumulate flex leave at the rate of twenty -six (26) days per year. BLUDAU shall also be entitled to 120 hours of administrative leave per year. BLUDAU shall not be entitled to any 2 compensation, or compensatory time off, for overtime. BLUDAU shall not be entitled to flex leave spill -over pay and shall not be subject to any flex leave accrual threshold. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to other non - safety management employees of the City such as short term and long term disability plans, life insurance plans, and deferred compensation plans. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $1,000.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Sixth Amended Agreement and the City Charter, the City Charter shall prevail. F. This Sixth Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non - safety management employees of the City. SECTION 6 Business Expenses A. Effective January 1, 2008, BLUDAU shall no longer receive a monthly car allowance of $450 for use of his personal car for City business. B. City shall reimburse BLUDAU for all reasonable business expenses actually incurred by BLUDAU in the performance of services pursuant to this Sixth Amended Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7 Meetings and Conferences BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to the City Charter, the Newport Beach Municipal Code and this Sixth Amended Agreement. 3 SECTION 8 Housing As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU's purchase of housing in Newport Beach, City has loaned BLUDAU the sum of $50,000 (Loan). The Loan has been, and shall be, used solely to purchase housing in Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15" of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Sixth Amended Agreement or BLUDAU's separation from City employment. In the event all or any portion of the Loan remains unpaid at the time of BLUDAU's separation, City shall have the right to withhold, from value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation, a sum equal to the amount of the then current unpaid balance. SECTION 9 Evaluation The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Sixth Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrants any modification of his base salary and /or benefits. However, any decision to modify BLUDAU's base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10 General Provisions A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specified in this Sixth Amended Agreement and /or relevant provisions of the City Charter of City ordinance. B. This Sixth Amended Agreement shall be binding on, and inure to the benefit of, the heirs, and assigns of BLUDAU. C. Any notice required by Amended Agreement shall be in writing and deemed given delivered (to the City Clerk in the case of the City), or and a deposited in the United States mail, postage prepaid and return receipt requested. D. This Sixth Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: Dated: APPROVED AS TO FORM: Robin Clauson City Attorney Ed Selich Mayor of Newport Beach Homer L. Bludau City Manager of Newport Beach LaVonne Harkless City Clerk