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HomeMy WebLinkAbout06 - City Manager Employment AgreementSEW Pp�T CITY OF NEWPORT BEACH City Council Staff Report Agenda Item No. _6 April 12, 2011 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Office of the City Attorney David R. Hunt, City Attorney 949 - 644 -3131, dhunt @newportbeachca.gov PREPARED BY: Mynette D. Beauchamp, Assistant City Attorney APPROVED: 2 C��L✓ /,.,_ TITLE: Approval of Employment Agreement for City Manager ABSTRACT: Council has directed the standardizing of Executive Management level Employment Agreements for consistency and currency. The attached Employment Agreement between the City Manager and the City addresses those objectives. RECOMMENDATION: 1. Approve the attached Employment Agreement with David Kiff effective April 12, 2011 ( "City Manager Employment Agreement'). 2. Adopt Resolution No. 2011 -_ approving and authorizing the Mayor to execute the City Manager Employment Agreement. FUNDING REQUIREMENTS: The City Manager Employment Agreement does not change compensation or benefits to be paid to Mr. Kiff. The current adopted budget includes sufficient funding for this agreement. It will be expensed to the General Fund (010), General Government (20) account in the City Manager's Office, 0310 -7000. DISCUSSION: Mr. Kiff was appointed as the City Manager of the City of Newport Beach under an Employment Agreement effective from September 12, 2009 through September 11, 2011 ( "Initial Employment Agreement'). The City Council previously adopted Resolution No. 2009 -61 on August 18, 2009 approving and authorizing the Mayor to execute David KifPs contract. Mr. Kiff has performed all duties and has had all powers of that position as set out in the Charter, ordinances, resolutions, policies and minute Approval of Employment Agreement for City Manager April 12, 2011 Page 2 actions of the City Council. Mr. Kiffs Initial Employment Agreement was subsequently amended pursuant to that certain Amendment No. One to Employment Agreement between the City of Newport Beach and David Kiff dated September 28, 2010. Per Council direction, attached is an Employment Agreement between the City and Mr. Kiff standardizing the basic terms of employment for Executive Management level City employees. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: David R. Hunt, City Attomey Office of the City Attorney Attachments: A. Resolution No. 2011- B. Employment Agreement with David Kiff, City Manager effective April 12, 2011 RESOLUTION NO. 2011- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH APPROVING EMPLOYMENT AGREEMENT WITH DAVID KIFF, CITY MANAGER WHEREAS, Mr. Kiff was appointed by the City Council as the City Manager of the City of Newport Beach effective September 12, 2009 and has performed all duties and has had all powers of that position as set out in the Charter, ordinances, resolutions, policies and minute actions of the City Council; WHEREAS, the City Council previously adopted Resolution No. 2009 -61 on August 18, 2009 approving and authorizing the Mayor to execute David Kiff's contract effective September 12, 2009 through September 11, 2011; WHEREAS, Mr. Kiff s Initial Employment Agreement was subsequently amended pursuant to that certain Amendment No. One to Employment Agreement between the City of Newport Beach and David Kiff dated September 28, 2010; WHEREAS, Council has directed the standardizing of Executive Management level Employment Agreements for consistency and currency. The attached Employment Agreement between the City Manager and the City addresses those objectives; NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: 1. The City Council hereby approves and authorizes the Mayor to execute the Employment Agreement with David Kiff attached hereto as Exhibit A to serve as City Manager for the City of Newport Beach. 2. This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 121h day of April, 2011. Michael Henn, Mayor ATTEST: Leilani Brown, City Clerk Attachment: Exhibit A: Employment Agreement with David Kiff -1- EMPLOYMENT AGREEMENT This EMPLOYMENT AGREEMENT ( "Agreement') is made effective as of April _, 2011 and is entered into by and between the CITY OF NEWPORT BEACH, a California municipal corporation and Charter City ( "Employer" or "City ") and DAVID KIFF ( "Employee') an individual, (sometimes collectively "the Parties "). RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Employee has been employed by City as City Manager under an Employment Agreement effective from September 12, 2009 through September 11, 2011. ('Initial Employment Agreement'). The Initial Employment Agreement was subsequently amended pursuant to that certain Amendment No. One to Employment Agreement Between the City of Newport Beach and David Kiff dated September 28, 2010 ( "Amendment One "). C. The Parties mutually agree that they intend for this Employment Agreement to supersede the Initial Employment Agreement and Amendment One, and that upon execution of this Employment Agreement, the Initial Employment Agreement and Amendment One shall have no force or effect. D. The Parties have also entered into that certain Housing Assistance Agreement Between the City of Newport Beach and David Kiff to Share Equity for the Real Property Located at 378 23rd Street, Newport Beach, California dated October 13, 2009 ( "Housing Assistance Agreement'). The Parties intend that the Housing Assistance Agreement, as well as the Second Deed of Trust and Promissory Note contemplated therein, shall remain in full force and effect. The Parties do not intend for this Agreement to amend the terms of the Housing Assistance Agreement, the Second Deed of Trust or the Promissory Note. Page i E. The Parties also mutually agree that this form of Agreement reflects the terms and conditions under which the Parties intend and desire to continue Employee's employment. NOW, THEREFORE, it is mutually agreed by and between the undersigned Parties as follows: SECTION 1: Term and Notice of Non - Renewal This Agreement shall be for an indefinite term, subject to termination as provided for in this Agreement. SECTION 2: Duties and Authority Employer agrees to employ Employee as City Manager to exercise the powers and authority and to perform the functions and duties specified in the Newport Beach City Charter, the Municipal Code and all relevant resolutions, rules, regulations, procedures, applicable job description(s) and state codes, as they currently or may in the future exist. Employee shall exercise such power and authority and perform such other functions and duties, not inconsistent with this Agreement, as Employer, by its City Council, may legally assign. SECTION 3: Compensation and Performance Evaluation. A. Employer agrees to pay Employee at the rate of an annual base salary of $225,000.00 (Two Hundred Twenty Thousand Dollars), subject to deduction and withholding of any and all sums required for federal or state income tax, pension contributions, and all other taxes, deductions or withholdings required by then current state, federal or local law, prorated and paid on Employer's normal paydays for the City Manager, City Attorney, City Clerk, and any Department Directors not covered by collective bargaining agreements ( "Executive Page 2 Management Employees "). Employer shall also deduct sums Employee is obligated to pay because of participation in plans or programs described in Section 4 of this Agreement. The annual base salary of Employee shall be established by resolution of the City Council. This Agreement shall be deemed amended whenever the City Council adopts a resolution changing the base salary of Executive Management Employees or the manner (but not the amount) by which Executive Management Employees are paid. B. Employer, by the City Council, and Employee may set mutually- agreed upon objectives for each year under this Agreement. Employer, by the City Council, may elect to conduct an evaluation of Employee's performance at any time or times during the period in which this Agreement remains in effect. C. Employee's compensation as discussed under this Section is not tied to the compensation of any other City employee or group of City employees, except as expressly provided in this Agreement. SECTION 4: Employee Benefits A. Benefit Balances Carried Over. Employee shall not have a break in his employment service between the Initial Employment Agreement and this Agreement. All of Employee's accrued leave and other benefit balances shall carry over, and his leave and benefit balances shall continue to accrue under the terms of applicable City policies and this Agreement. B. Flex Leave. Employee shall accumulate Flex Leave as provided in the City's Key and Management Compensation Plan, Executive Management category ( "Compensation Plan "), at the current rate of 27 days per calendar year. His maximum accrual is limited to 1,000 hours. The right to sell back accumulated Flex Leave shall be consistent with the Compensation Plan. Page 3 C. Administrative Leave. Employee shall be entitled to one hundred and twenty (120) hours of administrative leave per calendar year. Administrative leave will not accrue from calendar year to calendar year and must be used or lost at the conclusion of each calendar year. Consistent with the Compensation Plan, there is no right to sell back any accumulated Administrative Leave. D. Additional Benefits. Employee shall receive the same health insurance and retirement benefits, and be entitled to participate in plans and programs such as short term and long term disability plans, life insurance plans, and deferred compensation plans, as are available to non - public safety management employees of the City, as provided in the Compensation Plan. This Agreement shall be deemed amended as to these benefits, and these benefits only, whenever the City Council adopts a resolution or takes action changing these benefits under the Compensation Plan. E. Annual Physical Exam. Employee may undergo an annual physical examination and City shall reimburse Employee for the actual cost of the examination up to a maximum of one thousand dollars ($1,000.00). F. Automobile Allowance. Employee's duties require him to be available and respond to demands of City business at all times and outside of regular business hours, including weekends. Employer shall, therefore, pay to Employee $500 per month as an automobile allowance so that Employee may respond to these demands of City business. G. Phone Allowance. As of the date of this Employment Agreement, the City provides Employee with a cell phone and cell phone service. That shall continue until such time as the City moves to a phone allowance. At that time, Employee shall be entitled to the same phone allowance as provided to any Executive Management member. Page 4 H. Amendment. Employee's benefits provided under this Section 4 are not tied to the compensation of any other City employee or group of City employees except as expressly provided in this Section. SECTION 5: General Business Expenses A. Employer recognizes that Employee may incur expenses of a non - personal, job related nature that are reasonably necessary to Employee's service to Employer. Employer agrees to either pay such expenses in advance or to reimburse the expenses, so long as the expenses are incurred and submitted according to Employer's normal expense reimbursement procedures or such other procedure as may be designated by the City Council. To be eligible for reimbursement, all expenses must be supported by documentation meeting Employer's normal requirements and must be submitted within time limits established by Employer. B. Employer agrees to budget and pay for professional dues, membership and subscriptions of Employee necessary for continuation and participation in the International City /County Management Association (ICMA), Cal -ICMA, the California City Manager's Foundation (CCMF), and state and national League of Cities and such other organizations as Employer and Employee may agree from time to time. Employer also agrees to reimburse Employee for the cost of a corporate surety bond as contemplated by section 503 of the City Charter. C. Employer agrees to budget and to reimburse or pay for reasonable costs for attendance and participation in meetings, institutes, training programs, conferences, conventions and similar gatherings that support leadership development and the advancement of Employer and Employee's mutually agreed upon goals, and which are related to Employee's duties or Employer's operations and held in the continental United States. For purposes of this paragraph, reasonable expenses are limited to the reasonable and actual cost of registration, coach -class airfare (where applicable), ground transportation and Page 5 meals. Reasonable expenses will also include the reasonable and actual cost of lodging for meetings outside of Orange County. D. The expenses to be budgeted and paid in the Section 5, Paragraphs A, B, and C above, are exclusive of reasonable expenses related to events, participation in organizations, or attendance at events or meetings on behalf of the City as required by the City Council. Employer will separately budget and pay for membership and participation in community, civic or other organizations or events in which Employer requires Employee to participate. SECTION 6: At -Will Employment Relationship A. Consistent with Article VI of the City Charter, Section 600, Employee is appointed by, and serves at the pleasure of, the City Council. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of Employer to terminate this Agreement and the employment of Employee at any time, with or without Cause, and with or without notice. Employer shall pay Employee for all services through the Effective Date of termination and Employee shall have no right to any additional compensation or payment, except as provided in Section 7, Severance and Benefit Payoff at Termination, and General Release Agreement, below. B. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of Employee to resign from his employment with Employer, subject only to Employee's providing forty -five (45) calendar days prior written notice to Employer of the effective date of his resignation. SECTION 7: Severance and Benefit Payoff at Termination, and General Release Agreement A. If Employer terminates this Agreement (thereby terminating Employee's Employment) without Cause, as determined by the affirmative votes of a majority of the members of the City Council at a Regular Meeting of the City Council, and if Employee signs, delivers to the City Council, and does not revoke, the General Page 6 Release Agreement in the form attached hereto as Exhibit A, Employer shall pay and provide Employee a lump sum severance benefit equal to six (6) months of his then applicable base salary, and shall provide six (6) months of medical benefits as provided under the Compensation Plan beginning on the Effective Date of termination. B. If Employer terminates this Agreement (thereby terminating Employee's Employment) with Cause, as determined by the affirmative votes of a majority of the members of the City Council at a Regular Meeting of the City Council, Employee shall not be entitled to any additional compensation or payment, including Severance. If the City Council intends to terminate with Cause, based on a reason or reasons set forth in subpart 4 or 5, immediately below, the Council shall first deliver to Employee a written Notice of Intent to Terminate, stating the reason or reasons for the proposed termination, and providing a thirty (30) day period for Employee to cure. If, in the City Council's independent judgment, Employee cures the identified reason or reasons for Cause termination, Employee shall not be terminated therefor. As used in this Agreement, Cause shall mean any of the following: 1. Conviction of a felony; 2. Conviction of a misdemeanor arising out of Employee's duties under this Agreement and involving a willful or intentional violation of law; 3. Willful abandonment of duties; 4. Repeated failure to carry out a directive or directives of the City Council made by the City Council as a body; and 5. Any grossly negligent action or inaction by Employee that materially and adversely: (a) impedes or disrupts the operations of Employer or its organizational units; (b) is detrimental to employees or public safety; or (c) violates properly established rules or procedures of Employer. Page 7 C. In no event may Employee be terminated within ninety (90) days after any municipal election for the selection or recall of one or more of the members of the City Council. D. If Employee terminates this Agreement (thereby terminating Employee's employment), Employee shall not be entitled to any additional compensation or payment, including Severance. E. Upon termination (regardless of reason), Employee shall be compensated for all accrued but unused Flex Leave. No compensation shall be paid for any accrued but unused administrative leave. SECTION 8: Employee's Obligations and Hours of Work Employee shall devote his full energies, interest, abilities and productive time to the performance of this Agreement and utilize his best efforts to promote Employer's interests. Employee's duties may involve expenditures of time in excess of the regularly established workday or in excess of a forty (40) hour workweek and may also include time outside normal office hours (including attendance at City Council meetings). Employee's base salary includes compensation for all hours worked and Employee shall be classified as an exempt employee for purposes of overtime and shall not be entitled to any form of compensation for overtime. In recognition of the significant time Employee will need to devote outside normal office hours to business activities of Employer and the exempt, salaried nature of the employment, employee is permitted to exercise a flexible work schedule. However, consistent with this flexibility and Employee's participation in activities out of the office, Employee will generally be expected to keep office hours at City Hall, Monday through Friday during normal business hours. SECTION 9: Confidentiality and Non - Disparagement A. Employee acknowledges that in the course of his employment contemplated herein, Employee will be given or will have access to confidential and proprietary Page 8 documents and information, relating to the City, its residents, businesses, employees, and customers ( "Confidential Information "). Such Confidential Information may include, but is not limited to, all information given to or otherwise accessible to Employee that is not public information or would be exempt from public disclosure as confidential, protected, exempt or privileged information. Employee shall hold the Confidential Information in trust for City's benefit, and shall not disclose the Confidential Information to others without the express written consent of City. B. Except as otherwise required by law, in the event the City terminates Employee with or without Cause, the City and Employee agree that no member of the City Council, the city management staff, nor the Employee shall make any written, oral, or electronic statement to any member of the public, the press, or any City employee concerning the Employee's termination except in the form of a joint press release or statement, which is mutually agreeable to City and Employee. The joint press release or statement shall not contain any text or information that is disparaging to either Party. Either Party may verbally repeat the substance of the joint press release or statement in response to any inquiry. C. The obligations of Employer and Employee under this Section 9 shall survive the termination of this Agreement. SECTION 10: Outside Activities Employee shall not engage in any activity, consulting service or enterprise, for compensation or otherwise, which is actually or potentially in conflict with or inimical to, or which materially interferes with his duties and responsibilities to Employer. SECTION 11: Indemnification Consistent with the California Government Code, Employer shall defend and indemnify Employee, using legal counsel of Employer's choosing, against expense or legal liability for acts or omissions by Employee occurring within the course and scope of Employee's Page 9 employment under this Agreement. In the event there is a conflict of interest between Employer and Employee in such a case so that independent counsel is required for Employee, Employer may select the independent counsel after having considered the input of Employee and shall pay the reasonable fees of such independent counsel consistent with City litigation guidelines and standard rates received by City from its chosen special counsel. SECTION 12: Other Terms and Conditions of Employment Employer may fix other terms and conditions of employment, as it may determine from time to time, relating to the performance of the Employee, provided such terms and conditions are not inconsistent with or in conflict with the provisions of this Agreement or applicable law. SECTION 13: Notices Notice pursuant to this Agreement shall be given by depositing written notification in the custody of the United States Postal Service, postage prepaid, addressed as follows: (1) EMPLOYER: City of Newport Beach c/o City Clerk 3300 Newport Blvd. PO Box 1768 Newport Beach, California 92658 -8915 (2) EMPLOYEE: David Kiff at the home address then shown in Employer's files Alternatively, notice required pursuant to this Agreement may be personally served in the same manner as is applicable in civil judicial practice. Notice shall be deemed given as of the date of personal service or as of the date of deposit of such written notice in the course of transmission in the United States Postal Service as provided by law. Page 10 SECTION 14: General Provisions A. Integration: This Agreement sets forth the final, complete and exclusive agreement between Employer and Employee relating to the employment of Employee by Employer. Any prior discussions or representations by or between the parties are merged into this Agreement or are otherwise rendered null and void. The parties by mutual written agreement may amend any provision of this Agreement during the life of the Agreement. Such amendments shall be incorporated and made a part of this Agreement. The foregoing notwithstanding, Employee acknowledges that, except as expressly provided in this Agreement, his employment is subject to Employer's generally applicable rules and policies pertaining to employment matters, such as those addressing equal employment opportunity, sexual harassment and violence in the workplace, as they currently or may in the future exist, and his employment is, and will continue to be, at the will of the City Council. B. Binding Effect: This Agreement shall be binding on the Employer and the Employee as well as their heirs, assigns, executors, personal representatives and successors in interest. C. Choice of Law: This Agreement shall be interpreted and construed pursuant to and in accordance with the laws of the State of California and all applicable City Charter provisions, Codes, Ordinances, Policies and Resolutions. D. Severability: If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. E. Conflict with City Charter or Municipal Code. The City personnel ordinances, resolutions, rules and policies shall apply to Employee in the same manner as Page 11 applied to other management employees, provided, however, in the event of a conflict between the provisions of this Agreement and the City Charter, or this Agreement and the Municipal Code, the City Charter or the Municipal Code shall prevail over this Agreement. F. Employee's Independent Review: Employee acknowledges that he has had the opportunity and has conducted an independent review of the financial and legal effects of this Agreement. Employee acknowledges that he has made an independent judgment upon the financial and legal effects of this Agreement and has not relied upon any representation of Employer, its officers, agents or employees other than those expressly set forth in this Agreement. Employee acknowledges that he has been advised to obtain, and has availed himself of, legal advice with respect to the terms and provisions of this Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates reflected below each signature. EMPLOYER CITY OF NEWPORT BEACH, EMPLOYEE A Municipal Corporation M Michael Henn, Mayor David Kiff Date: Date: APPROVED AS TO FORM: By: /Mynelte . BeaV`bamp Assistant City A o rney Date: q / Page 12 ATTEST: 0 Leilani Brown, City Clerk Date: Page 13 GENERAL RELEASE AGREEMENT This General Release Agreement ( "Agreement ") is entered into by and between DAVID KIFF ( "Employee ") and CITY OF NEWPORT BEACH ( "Employer'), in light of the following facts: A. Employee's employment with Employer concluded on B. Certain disputes have arisen between Employer and Employee. C. Employer and Employee each deny any liability whatsoever to the other. D. Employer and Employee wish to fully and finally resolve any and all disputes they may have with each other. E. Employee is hereby informed that he has twenty -one (21) days from receipt of this Agreement to consider it. Employer hereby advises Employee to consult with his legal counsel before signing this Agreement. F. Employee acknowledges that for a period of seven (7) days following the signing of this Agreement ( "Revocation Period "), he may revoke the Agreement. This Agreement shall not become effective or enforceable until the day the Revocation Period has expired. G. Employee acknowledges that the Salary Payment referenced in paragraph 1 of this Agreement represents all compensation, including salary, accrued benefit balances and reimbursed expenses, due and payable to him through the date of employment termination. Employee also acknowledges that Employer has made this Salary Payment without regard to whether he signs this Agreement. The Salary Payment does not constitute consideration for this Agreement. Employee acknowledges that the Severance referenced in paragraph 2 of this Agreement is in excess of all amounts that are due and owing to him as a result of his employment by Employer. 1. Receipt of Salary Payment. Employee hereby acknowledges receipt of a check or checks for all compensation owing to him, including salary, accrued benefit balances and reimbursed expenses ( "Salary Payment ") from Employer. 2. Severance. Within ten (10) days following Employee's signing, delivering to the City Council, and not revoking this Agreement, City shall pay Employee the gross amount provided for in Section 7 of the Employment Agreement effective December 22, 2010, less applicable deductions, and shall provide the months of medical benefits as EXHIBIT A — Page 1 provided in that same Section 7 ( "Severance "). Employee acknowledges that the Severance is in excess of all amounts due and owing him as a result of his employment by Employer. 3. General Release. In consideration of the Severance to be paid and provided to Employee, and other good and valuable consideration, Employee hereby releases and discharges Employer and its past and present City Council Members, employees, representatives and agents, from all rights, claims, causes of action, and damages, both known and unknown, in law or in equity, concerning and /or arising out of his employment with Employer which he now has, or ever had, including but not limited to any rights, claims, causes of action or damages arising under Title VII of the Civil Rights Act of 1964, the Vocational Rehabilitation Act of 1973, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefits Protection Act, the Family and Medical Leave Act of 1993, the Domestic Partners Act of 2003, the California Labor Code, the Private Attorneys General Act of 2004, the California Moore- Brown - Roberti Family Rights Act, the California Unruh Civil Rights Act, the California Fair Employment and Housing Act, any other federal, state, or local employment practice legislation, or any federal or state common law, including wrongful discharge, breach of express or implied contract, or breach of public policy. Employee hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of California. Employee understands and acknowledges the significance and consequences of this specific waiver of Section 1542. Section 1542 of the Civil Code of California states as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of Employer and its past and present City Council Members, employees, representatives and agents, Employee expressly acknowledges that this General Release is intended to include in its effect, without limitation, all claims which he does not know or suspect to exist in his favor. Employee further acknowledges that he has read this General Release and that he understands that this is a general release, and that he intends to be legally bound by the same. EXHIBIT A — Page 2 4. Fees and Costs. Employee and Employer agree that in the event of litigation relating to this General Release Agreement, the prevailing party shall be entitled to recover his /its reasonable attorneys' fees and costs. Dated 20 CITY OF NEWPORT BEACH Dated: 20 • 1 � l T � 1��� � 1 � � L' 3 i' i E By: Mynette D. Beauchamp Assistant City Attorney Date: ATTEST: By: Leilani Brown, City Clerk Date: LM DAVID KIFF EXHIBIT A — Page 3