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HomeMy WebLinkAbout20 - Post-Retirement Employment AgreementsCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 20 April 28, 2009 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: David R. Hunt, City Attorney ext. 3131, dhunt((Dcity.newport- beach.ca.us Terri L. Cassidy, Human Resources Director ext.3303, tcassidv @city.newport- beach.ca.us SUBJECT: Ratification of Post - Retirement Employment Agreements ISSUE: Should the City Council ratify the post- retirement employment rehire of 13 employees pursuant to Council Policy F -20? RECOMMENDATION: Staff recommends the City Council ratify the post - retirement employment of the 13 employees listed on Exhibit "A,' hereto, pursuant to City Council Policy F -20. DISCUSSION: There are multiple issues relevant to the question of ratification of existing rehire arrangements. At this point, we wish to address the existing circumstances of rehired employees in order to eliminate any ambiguity as to their current status. Staff will develop a further analysis of the issues for the Council's consideration in the future to address policy questions that are best vetted without complications brought on by the issue of existing relationships. 1. Council Policy. The City Council Policy F -20 addresses contracting with former employees of the City. The policy was adopted November 10, 1997 and last amended April 8, 2003. It currently states: PURPOSE To establish a city policy regarding contracting with former city employees. Ratification of Post - Retirement Employment Agreements April 28, 2009 Page 2 POLICY When not more than 5 years has passed since a person who is a former City employee has left service with the City: 1. All professional services contracts with former city employees or temporary employment contracts with retiring or former city employees shall require approval of the City Council; and 2.- Council approval shall also be required for professional services contracts with a corporation or other business entity owned or operated by a former City employee or that employs a former City employee. This policy has not been consistently applied and is silent on the definition of what constitutes "professional services'. Several post- retirement agreements have been brought to Council for approval, such as, for example, Dennis Danner, Administrative Services Director and Tom Rossmiller, Special Projects Consultant. On the other hand, others have not, for example, returning part-time employees such as part-time police officers, library workers who are on -call and lifeguards. 2. Police Management Association's Request for Investigation. The issue of post- retirement rehires recently came to light in the context of an investigation requested by the Police Management Association ( "PMA "). The PMA asked the Civil Service Board ( "CSB ") to investigate a number of issues related to the police promotional process. The CSB authorized and directed the investigation proceed at its two meetings in March. In the context of that investigation, the Office of the City Attorney reviewed the City's personnel policies and concluded that rehiring former employees without Council approval is a violation of City Council Policy F -20. (See Exhibit "B" attached hereto.) After review of the roster of City staff, it came to light that there currently are 13 former employees working for the City whose rehire has not been formally approved by the City Council as stated in Council Policy F -20. Those employees work in multiple departments and are reflected in Exhibit "A," attached for consideration by the Council. We recommend ratifying the agreements for the reasons reflected on Exhibit "A" and permitting departments to address these positions in the upcoming budget process. 3. Public Employee Retirement System Issues. We note that the rehire of retired employees is governed by specific standards under the California Public Employees Retirement System ( "CalPERS "). Under the Public Employees Retirement provisions, a retired employee may not return to public Ratification of Post - Retirement Employment Agreements April 28, 2009 Page 3 employment more than 960 hours per fiscal year, and there must be a specific, identifiable reason or need for that employee to return to the employee's former agency. Typically, an employee is rehired on a temporary basis in order to bridge the gap to a new full -time hire or to Iretain a special talent or skills that an agency cannot replace immediately from another source. CalPERS requires agencies to track the hours of post- retired rehires more carefully and monitor? The employee and the hiring department monitor the employee's employment annually. 4. Wage and Benefit Issues. Returning employees typically are hired on a temporary, hourly basis. They are not paid health and welfare benefits since they receive benefits through the retirement system. However, if they meet the criteria under the law, they may be paid overtime if they work more than a prescribed number of hours in a given pay period. Generally, they cost the City less than permanent full -time employees who receive all of the benefits of public employment along with their wages. 5. Agreement Considerations. These post- retirement relationships tend to arise in one of two scenarios: (1) retention of a former employee as a professional consultant pursuant to the City's Professional Service Agreements and policies; or (2) as temporary and /or part-time rehires. Where there is an independent contractor consultant relationship being created, it is best addressed through the City's Professional Services Agreement. Where there is a rehire into an employment relationship, that relationship is best addressed as a temporary part-time "at- will" relationship that is documented by an offer letter that highlights its nature. Environmental Review: This is not a project under CEQA. Public Notice: Seventy -two hours notice has been given pursuant to the Brown Act. No further notice is legally required. Funding Availability: There is no additional expense incurred. The funds being paid for the contracting are already reflected in the departments' current personnel budgets. Alternatives: The Council can choose to: 1. Ratify as recommended. 2. Not ratify, and if so, the departments will terminate the services of those former employees with whom they contracted; or 3. Ask questions and /or give direction for staff to develop further information. CONCLUSION Staff recommends Council identified on Exhibit "A hereto recommendations regarding agenda. Prepared and Submitted by: Ratification of Post - Retirement Employment Agreements April 28, 2009 Page 4 ratify the existing agreements with former employees and direct staff to come back with further information and Issues related to the post- retirement rehire on a future By ~� By David R. Hunt, Terri L. Cassidy, City Attorney Human Resources Director Attachments: • Exhibit "A" - List of Currently Employed Retirees • Exhibit "B" -Letter to Sanjay Barisal, Esq., and Aaron C. Harp dated April 3, 2009 (A09- 00338] Post - Retirement Staff Report 04.28.09 (SW version) Exhibit A City of Newport Beach Currently Employed Retirees Employee Current Job Class Title Ret Date Date Re -hired Department Justification to Re -hire BARNICLE, SARA LIBRARIAN II 12/01/2006 12/22/2006 Hired back and placed on on -call list/LDW 4/19108 CHESTER, KATHLEEN LIBRARY CLERK I P/T 06130/1999 07/01/1999 Hired back (was Sr Library Clerk) and placed on on -call Iist/LDW 7/6108 BLAUER JR, JOHN LIFEGUARD II 04/28/2006 03/14/2009 Hired back to fill in as Seasonal Lifeguard HARDY, CAROL A. POLICE COMM SVC OFCR, PIT 12/30/1998 05/22/1999 Specialized computer skills - PT clerical support to prevent overtime costs of FT absences CALDWELL, GLENN POLICE OFFICER PIT 12/19/2003 12/20/2003 Reserve /PT Officer- specialized skills. Transports prisoners leaving FT in field. Job shares Court Liason position, FT remain in field when staffing is low. CANTRELL, JEFFREY POLICE OFFICER P/T 12/13/2002 12/14/2002 Specialized skills as a Background Investigator and fills in vacancies. MILIUS, GARY POLICE OFFICER PIT 12/22/2006 12/23/2006 Specialized skills as Police Officer /Court Liaison. Job shares Court Liaison position, FT remain in field when staffing is low. NAKASHIMA, RANDY POLICE OFFICER PIT 02/1012005 02/1512005 Specialized skills as Police Officer /Court Liaison. Job shares Court Liaison position, FT remain in field when staffing is low. PARKER, RANDALL POLICE OFFICER P/T 04/21/2005 04/2212005 Specialized skills as a Background Investigator and fills in vacancies. WHITE, GERALD POLICE OFFICER P/T 12/30/2005 12/31/2005 Specialized skills as Police Officer - fills shortages in Patrol when staffing is low. WINGERT, JOSEPH POLICE OFFICER P/T 05/26/2006 05/30/2006 Specialized skills as Police Officer /Court Liaison. Job shares Court Liaison position, FT remain in field when staffing is low. BRESSLER, STANLEY POLICE RESERVE OFFICER 08/05/1993 10/10/1998 Specialized skills as an Explorer Scout Advisor - rehired as a Technical Reserve Officer to assist w /Explorer Program. SCHULZ JR, RICHARD POLICE RESERVE OFFICER 12/17/2002 06/14/2003 Rehired as Reserve Officer - transports prisoners leaving FT in field. April 22, 2009 EXHIBIT B CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY David R. Hunt, City Attorney April 3, 2009 VIA FACSIMILE (909) 985 -3299 & U.S. FIRST CLASS MAIL Sanjay Barisal, Esq. Lackie, Dammeier & McGill 367 North Second Avenue Upland, CA 91786 Aaron C. Harp, Esq. Office of the City Attorney City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92658 RE: NBPMA Request for Civil Service Board Investigation A08 -00224 Gentlemen: As you know, the Newport Beach Police Management Association ( "PMA ") requested an investigation of numerous issues arising out of the promotional process and employment practices of the Police Department. We have recommended the investigation proceed and the Civil Service Board ( "CSB ") has appointed an investigator, James Blaylock, to conduct the investigation pursuant to the agreed upon Scope of Investigation. We have met with Mr. Blaylock, provided him with all the information we have available in our office and the investigation is proceeding. ....... _ _ There are two specific legal issues posed as ultimate questions 1 and 6 of the Scope of Investigation. They address issues related to the City Managers entering into a "Post - Retirement Continued or Part-Time . Employment Agreement" with the PMA and the appropriateness of the Chief of Police recruitment conducted in 2007. These two questions raise specific legal issues that can, and need to be, addressed at the outset of the investigation. We are prepared to opine on the legal issues related . to these two questions as noted below. At this time, however, we seek your input before finalizing an opinion regarding them. 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, Caltfornia 92658 -8915 Telephone: (949) 644- 3131 - Fax: (949) 644 -313 • www.city.newport- beach.ca.us Sanjay Barisal Aaron Harp April 3, 2009 Page 2 COUNCIUMANAGER FORM OF GOVERNMENT Both legal issues revolve around procedures by which the City hires employees and contracts for services. Each issue, to one extent or another, raises a question of whether the broad powers granted to the position of City Manager were correctly exercised in this area of its responsibility. As with all such questions, the analysis must begin with the City Charter. The Newport Beach City Charter ( "Charter') establishes a Council /Manager form of government. (Charter, Article III, Section 300.) Full administrative authority and responsibility is vested by the Charter in the City Manager as the "chief administrative officer' of the City. (Charter, Article V, Section 500.) As chief administrative officer, the Charter gives the City Manager the authority to appoint all department heads (Charter Section 504(a)) 1 and to exercise control over all administrative offices and departments of the City (Charter Section 504(h)).2 The Charter's provisions also address the issue of contracting authority within the City. Section 421 of the Charter specifically sets out the requirements for the City to enter into of a binding contract. Section 421 states: The City shall not be bound by any contract, except as hereinafter provided, unless the same shall be made in writing, approved by the City Council and signed on behalf of the City by the Mayor and City Clerk or by such other officer or officers as shall be designated by the City Council. Any of said officers shall sign a contract on behalf of the City when directed to do so by the City Council. By ordinance or resolution the City Council may authorize the City Manager to bind the City, with or without a written contract, for the acquisition of equipment, materials, supplies, labor, services, or other items included within the budget approved by the City Council, and may impose a mandatory limit upon such authority. The provisions of this Section shall not apply to the services rendered by any person in the employ of the City at a regular salary. Finally, the exercise of power by the City Manager related to public employment is "subject to the Civil Service provisions of the City." (NBMC Section 2.08.060.) The City's The City Manager's duty and the power to appoint department heads expressly includes the Police and Fire Chiefs pursuant to NBMC Section 2.24.100(c). 2 (See also, Newport Beach Municipal Code ( "NBMC ") Section 2.12.020) Sanjay Barisal Aaron Harp April 3, 2009 Page 3 Civil Service System covers the Police and Fire Departments of the City. Article VIII of the Charter enables the Civil Service System. Section 802 of the Charter applies the Civil Service System to "all full time, regular and permanent positions of employment on the Police and Fire Department of the City." Subsection 2 of Section 802 goes on, however, to expressly except all Department Heads from the system. Consistent with the Charter, Section 2.24.020 of NBMC recognizes that "those positions excluded by Section 802 of the City Charter" are excepted from the Civil Service System. Furthermore, NBMC Section 2.24.100, subsection C, expressly directs that the selection of the Police Chief and Fire Chief shall be made by the City Manager.3 It is in the context of the City Manager's authority to administer all aspects of the City's business that we analyze the specific legal questions that were posed. CONTINUED EMPLOYMENT AGREEMENT The ultimate question as to the Continued Employment Agreement was articulated as follows: Was City Manager's authority exceeded and Council Policy F- 20 violated by the entering into of the Agreement Regarding Post - Retirement Continued or Part-Time Employment for PMA Members ( "Continued Employment Agreement ") in September of 2005, and, if so, what are the consequences of that conclusion, and, what if anything, should be done to address the issue in the context of the Civil Service system? Before analyzing the law governing the authority to contract, one must ask what the Continued Employment Agreement is. It is written in the language of a contract between the City and the PMA; however, one could easily argue it creates no rights in anyone, except rights on the part of PMA members to "request permission of the Chief of Police." It is also written in the language of a "program" and refers to its provisions as this section," implying it is part of a larger agreement. Regardless of this ambiguity, in the end, the ultimate question is what, if any, binding effect the Continued Employment Agreement has on the City. It will, therefore, be analyzed in terms of its ultimate effect, addressing what, if any binding power it has on the City itself. As with all such questions, the analysis begins with the City's Charter. Charter cities derive their authority directly from California Constitution Article XI. Article XI grants Charter cities supreme authority in the area of municipal affairs. (Harman v. City and County of San Francisco (1972) 7 Cal.3d 150, 161.) This plenary authority includes the right to designate the mode for municipal contracting. (Loop Lumber Company vs. Van Loben Sels (1916) 173 Cal. 228.) Charter cities may also exercise authority conferred 3 As discussed further below, the selection process is governed by the provisions of the ordinance. Sanjay Bansal Aaron Harp April 3, 2009 Page 4 upon them by general laws, provided it is not inconsistent with the Charter. (Hubbard vs. City of San Diego (1976) 55 Cal. App. 3d 380.) As such, the terms of the Charter of the City of Newport Beach govern whether or not a contract may be entered into and sets forth the requirements for entering into contracts. Charters that authorize a City to contract also provide the measure of the power to contract. (Dynamic Industries Company vs. City of Long Beach (1958) 159 Cal. App. 2d 294.) A contract executed in a manner not authorized by statute or charter is unenforceable against the City. (Reams vs. Cooley (1915) 171 Cal. 150.) A City cannot be held liable in quasi- contract or through estoppel when the Charter's provisions for contracting have not been complied with. (City of Oakland vs. Bums (1956) 46 Cal. 2d 401; Lemoge Electric Company vs. San Mateo County (1956) 46 Cal. 2d 659; San Francisco International Yacht & Group vs. City and County of San Francisco (1992) 9 Cal. App. 4th 672.) An analysis of the Continued Employment Agreement on its face demonstrates it was not entered into consistent with the provisions of the Charter governing authority to contract. Section 421 requires approval of the City Council and the signatures of the Mayor and the City Clerk on all contracts. The Continued Employment Agreement was executed by Robert McDonell as Chief of Police, Homer Bludau as City Manager, and John Desmond as President of the PMA, not the Council or the City Clerk. Additionally, it was not excepted from these requirements of the Charter under the last sentence of the section as applying to the services of a person in the employ of the City at a regular salary. Thus, the Charter's requirements for a binding contract were not met. Additionally, when analyzed as an agreement between a labor organization and the City, it has no binding effect on the City. The terms of the Continued Employment Agreement essentially demonstrate that it was entered into as if it was a side letter to a labor agreement. Only the Council, however, may approve a labor agreement. (City Council Resolution 2001 -50; Government Code Section 3505.1; Bagley vs. City of Manhattan Beach (1975) 18 Cal. 3d 22; Long Beach City Employees' Association vs. City of Long Beach (1977) 73 Cal. App. 3d 273.) Furthermore, Council Policy F -14 governing authority to contract for services does not authorize the City Manager to execute such an agreement. As such, the Continued Employment Agreement has no binding power over the City as a labor agreement. In addition, the Continued Employment Agreement is inconsistent with the spirit of Council Policy F -20, which governs the entering into of continuing employment agreements with retired City employees. Council Policy F -20 states in pertinent part: PURPOSE To establish a city policy regarding contracting with former city employees. Sanjay Bansal Aaron Harp April 3, 2009 Page 5 POLICY When not more than five years have passed since a person who is a former City employee has left service with the City: 1. All professional services contracts with former city employees or temporary employment contracts with retiring or former city employees shall require approval of the City Council.... (Adopted November 10, 1997; amended March 9, 1998; amended March 22, 1999; amended April 9, 2003; formerly J -1.) Thus, the provisions of Council Policy F -20 require approval by the City Council before any continuing employment agreement can be entered into with a former City employee. The Continued Employment Agreement, however, did not provide for Council approval of any agreements with former employees. Instead, it assumed the Council would not have to approve future agreements by giving full discretion to the Chief of Police for entering into the subsequent agreements. As such, the Continued Employment Agreement is inconsistent with the letter and spirit of. Council Policy F -20. Since the Agreement was not entered into pursuant to the provisions of the Charter and it violates the spirit of Council Policy F -20, it is not binding on the City and no valid contract was formed. (San Francisco International Yacht & Group vs. City and County of San Francisco (1992) 9 Cal. App, 672, 683 -684.) As a result, the Continued Employment Agreement has no binding effect on the City, it not having been entered into in a manner consistent with the Charter, ordinances, and regulations of the City of Newport Beach. The question then becomes what are the consequences that result from this failure to form a contract? The law is clear on this point. The agreement is completely without force or effect and is unenforceable even in equity. 'When a municipal charter contains an express limitation on the manner in which a city may contract, the city is bound only by the contracts executed in accord with the charter provision. When there has been no compliance with the relevant charter provision, the city may not be liable in quasi - contract and will not be estopped to deny the validity of the contract." (San Francisco International Yacht & Group, supra, 9 Cal. App. 4th 683, 684.) The Agreement is not "voidable." Where there is a violation of an underlying charter provision establishing authority to contract, a contract in and of itself is "void" and has no force or effect as opposed to "voidable." As stated by Black's Law Dictionary, That also was the practice. Seven agreements were entered into between the Department and retiring employees pursuant to the terms of the Continued Employment Agreement, though one was withdrawn. None of these agreements sought approval of the Council. San] ay Bansal Aaron Harp April 3, 2009 Page 6 There is [a] difference between the two words "void" and "voidable ": void in the strict sense means that an instrument or transaction is nugatory and ineffectual so that nothing can cure it; voidable exists when an imperfection or defect can be cured by an act or confirmation of him who could take advantage of it. ... But the distinction between the terms "void" and "voidable," in their application to contracts, is often one of great practicable importance; and whenever entire technical accuracy is required, the term "void" can only be properly applied to those contracts that are of no effect whatsoever, such as a mere nullity, and incapable of confirmation or ratification. (Black's Law Dictionary (6th ed. 1990) p.1573, Col.2, original italics.) Thus, the Continued Employment Agreement is void. It has no power and no force or effect whatsoever.5 These legal principles are clear and, in our opinion, incontrovertible. On the other hand, they leave open the question of what, if anything, in fairness should be done to address the nullity of the Continued Employment Agreement. We solicit your input on potential approaches to address any adverse impact on your clients with respect to this conclusion. 2007 CHIEF RECRUITMENT The following ultimate question was raised as to the 2007 recruitment of the Chief of Police: Was the 2007 recruitment for the position of Chief of Police conducted consistent with Newport Beach Municipal Code, the CSB Rules and purpose, and if not, what if anything, should be done to address the issue in the context of the Civil Service System? Specifically, the legal question here is whether the City regulations require the recruitment of the Chief of Police through an "open" recruitment process.. As with the question regarding the Continued Employment Agreement, the law applicable to this issue is not in dispute. The Chief recruitment process is legally governed by the provisions of the City Charter, the Newport Beach Municipal Code, the CSB Rules, and the City's Employee Policy Manual, when not in conflict with either of the other three. As 5 This conclusion does not mean Police Department employees cannot, under specific circumstances, return to work after retirement in a manner consistent with City Council Policy F -20 or the rules governing the PERS retirement system. It simply means the Continued Employment Agreement has no binding effect on the City. Sanjay Bansal Aaron Harp April 3, 2009 Page 7 with the issue regarding the Continued Employment Agreement, the analysis starts with the Charter. As discussed above, the City Manager is given the responsibility and authority to appoint the Chief of Police. That authority is to be exercised in the context of the City's Civil Service System. The principle structure and regulations governing the City's Civil Service System were established by Ordinance No. 866, which was adopted by a vote of the people in 1958. Ordinance No. 866 is codified in Chapter 2.24 of the NBMC. In addition, the City has Civil Service Board Rules that were approved by motion of the City Council effective February 11, 1974, and, in their reformatted /revised present form, approved by motion of the City Council effective April 22, 2008. a The purpose of the Civil Service System is set forth in NBMC 2.24.030 as follows The purpose of the system is to establish an equitable and uniform procedure for dealing with personnel matters; to attract to the City service the most competent persons available; to assure that the appointment and promotion of employees will be based on merit and fitness; and to provide reasonable security for employees. (Ord. 866 Section 3; Civil Service Board Rules ( "CSB Rules") Section 402.) The CSB Rules identify two principle agents for carrying out this purpose: the CSB (CSB Rules, Section V) and the City Manager (CSB Rules, section VI and VII). Appointments under the Civil Service System shall be based on "merit and fitness" and "shall be made from employment lists." (NBMC 2.24.070(A).) Specifically, the appointment of Police and Fire Chiefs are governed by the provisions of NBMC Section 2.24.100 and CSB Rules Sections 700 and 701.' As a rule, the Civil Service System and the employee policy of the City prefers filling a position via promotional recruitment as opposed to open recruitment. (NBMC Section 2.24.080(A) and 2.24.090(A).) 8 In this context, the chief officer recruitment for both the Fire and Police Departments is specifically covered by NBMC Section 2.24.100 9 and CSB Rules 700 and 701. The intent of this section and these rules, and thus the process, is to fill the chief officer positions with 6 At the time of the Chief recruitment, the Civil Service ordinance and Civil Service Rules were not fully and clearly integrated. The appointment of the Police and Fire Chiefs are specifically subject to the sections related to those appointments. (NBMC 2.24.070(B).) e It should be noted that the City's Personnel Policy which was adopted by the Council via Resolution No. 2001 -100 on December 11, 2001 states: "With respect to non -civil service employees, recruitment shall be promotional unless the Human Resources Director, after consultation with the relevant Department Directors, determines that an open recruitment is necessary to insure an adequate number of candidates with appropriate skills and ability." 9 Ordinance No. 866 Section 10. Sanjay Barisal Aaron Harp April 3, 2009 Page 8 "the best qualified persons available as determined by competitive examination." It also, however, continues the preference for promotional recruitment by stating, "Qualifications being substantially equal, preference shall be given to candidates in the Newport Beach Fire and Police Departments who qualify under the selection process herein described." (NBMC Section 2.24.100.) It further recognizes that the chief officer positions are not included as part of the Civil Service System (NBMC Section 224.100(B)) and that the appointments are to be made by the City Manager (NBMC Section 2.24.100(C).) That having been said, these provisions set forth the method for selection of the chief officers. It is not disputed that the Police Chief recruitment in 2007 complied with the procedural provisions of NBMC Section 2.24.100, except for the requirement for use of an "open employment list." Specifically, subsection C of 2.24.100 states: C. Selection Process. The selection of the Police Chief and Fire Chief shall be made by the City Manager from among the candidates whose names appear on an open employment list for the class. Such list shall be created as a result of an examination consisting of a written test weighted at fifty percent and qualifications appraisal weighted at fifty percent. The minimum qualifying score on each phase of the examination shall be seventy percent. This section further requires that the written test be prepared by a professional agency with the approval of the CSB (NBMC 2.24.100(D);) a qualifications appraisal board be established consistent with the ordinance (Section 2.24.100(E);) qualification factors for the consideration by the appraisal board be jointly established by the City Manager and the Board (NBMC 2.24.100(F)); and candidates for the position must possess the minimum qualifications set forth in the class specifications as established by the City Manager and approved by the Board (NBMC 2.24.100(G)). All of these requirements for the process were met with the exception of the selection of the candidate from an "open employment list." The term "open employment list" is defined in NBMC 2.24.090. It is to be contrasted to a "promotional employment list." The Section states, in pertinent part, as follows: A. Priorities. Priority for consideration for employment shall be given to employment lists in the following order: reemployment lists, promotional employment lists, and open employment lists. ...I'M- C. Promotional Employment Lists. Promotional employment lists shall consist of the names of City employees Sanjay Bansal Aaron Harp April 3, 2009 Page 9 who have been successful in a promotional recruitment and examination. D. Open Employment Lists. Open employment lists shall consist of the names of all candidates who have been successful in an open recruitment and examination. ... Thus, consistent with NBMC Section 2.24.090(D), "open employment list" is one made up of candidates who had competed in an open recruitment process. Section 2.24.010 defines "open recruitment" stating, "The term 'open recruitment' shall mean a recruitment that is not restricted to City employees." Thus, pursuant to the terms of the ordinance, the appointee to the position of Police Chief in 2007 should have been drawn from an employment list that was compiled from candidates who were not restricted to City employees. The 2007 Police Chief recruitment, however, was conducted as a "promotional recruitment" and not an "open recruitment." The intention to pursue a promotional recruitment as opposed to an open recruitment was reported to the CSB at its March 5, 2007 meeting. This report was provided in an open and public session of the CSB at which representatives of the Police Department and its two employee associations were present. No objections to this approach were raised. In spite of this lack of objection, however, the decision to proceed in a promotional recruitment was not consistent with NBMC Section 2.24.100 in that it dictates that an "open list" must be used for the selection of the Police Chief. While the NBMC, CSB Rules and Employee Policy Manual clearly identify promotional recruitment as being the preferred method for filling positions within the City, the Chief Officer recruitment process as defined under NBMC Section 2.24.100 is an exception to that rule. It should, therefore, have been conducted as an open recruitment. Thus, the requirements of Ordinance No. 866 and the municipal code were not followed in their totality when making the Police Chief appointment in 2007. Having reached that conclusion, however, the inquiry does not end there. The question then must be posed as to what, if anything, should be done to address this situation. Here the Chief Officer was chosen by the appropriate appointing authority, the City Manager, using all the appropriate processes with the exception of an open recruitment, and a contract was entered into between the appointing authority and the Chief consistent with the City's contracting policies. These actions, however, do not in and of themselves cure the failure to comply with the open recruitment requirement. We now seek input from the interested parties as to what, if anything, should be done to address this situation. We generally see this issue as being one of equity. The question is whether the circumstances underlying this error in the appointment process justify corrective action being taken. Do they justify conducting a new recruitment? Do they Sanjay Bansal Aaron Harp April 3, 2009 Page 10 justify accepting the recruitment as not fully complying, but no action be taken? We ask that you provide us your input on this issue so it can be considered. In addition, it is believed that completion of the investigation that has been commissioned by the CSB at the request of the PMA will need to be completed in order to fully determine the factual circumstances surrounding the recruitment and defining the equities related to it. CONCLUSION Two legal issues can be defined and answered based upon the application of settled law. First, the Continued Employment Agreement was entered into by the City Manager in excess of his authority and without following the requirements of the City Charter, ordinances, or the Council's resolutions. It is therefore void. Additionally, the Chief of Police recruitment conducted in 2007 was not conducted as an open recruitment as required by the NBMC and was therefore inconsistent with the dictates of the Code. The question remains, however, what, if anything should be done to address these issues, and we seek your input on that question. Additionally, if you have any questions, concerns, comments or disagreements in any way with the legal analysis related to either of these two issues, please provide us with that information. In that, we are seeking to address these issues promptly so that policymakers can be informed of these issues, we ask that you provide us your comments on or before close of business Thursday, April 9, 2009. Thank you for your attention in this matter. Please feel free to contact the undersigned if you have any questions or concerns. Sincerely, OFFICE OF THE CITY ATTORNEY David R. Hunt, City Attorney DRH /da cc: Homer Bludau, City Manager John Klein. Chief of Police SB -AH NBPMA Req For CSB Investigation