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CC - Item 5B - Approval of City Manager Contract AgreementE • ROSEMEAD CITY COUNCIL TO: THE HONORABLE CITY COUNCIL FROM: JOHN TRAN, MAYOR DATE: SEPTEMBER 11, 2007 STAFF REPORT SUBJECT: APPROVAL OF CITY MANAGER CONTRACT AGREEMENT SUMMARY On August 28, 2007, the Rosemead City Council voted to appoint Oliver Chi as City Manager. In addition, the Council directed that the City Attorney and the Mayor negotiate a contract agreement for City Council approval. Recommendation It is recommended that the City Council approve the attached employment agreement (Attachment A) between the City and Oliver C. Chi, authorizing his appointment as City Manager of the City of Rosemead. ANALYSIS The terms of the attached employment agreement were drafted based on the parameters set by the City Council. LEGAL REVIEW The City Attomey has reviewed and approved this staff report and the attached employment agreement. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Attachment A: City Manager Employment Agreement APPROVED FOR CITY COUNCIL AGENDA: O • • CITY MANAGER EMPLOYMENT AGREEMENT between the City of Rosemead and Oliver Chi dated September 11, 2007 0 • CITY MANAGER EMPLOYMENT AGREEMENT between the City of Rosemead and Oliver Chi 1. PARTIES AND DATE This Agreement is entered into as of August 28, 2007 by and between the City of Rosemead, California, a municipal corporation (the "City"), and Oliver Chi, an individual (the "City Manager"). The City and the City Manager are sometimes individually referred to as a "Party" and collectively as "Parties." A. The City requires the services of a City Manager. B. The City Manager has the necessary education, experience, skills and expertise to serve as the City's City Manager. C. The City Council of the City desires to employ the City Manager to serve as the City Manager of City. D. The Parties desire to execute this Agreement pursuant to the authority of and subject to the provisions of Government Code Section 53260 et seq., and Title 2, Chapter 2.08 of the Rosemead Municipal Code. E. In consideration of these Recitals and the performance by the Parties of the promises, covenants, and conditions herein contained, the Parties agree as provided in this Agreement. 2. EMPLOYMENT The City hereby employs the City Manager as its City Manager, and the City Manager hereby accepts such employment. A. Term (1) Initial Term Employee shall, following the assumption of the office of City Manager on August 28, 2007, remain in the exclusive employ of the City until August 28, 2009. Employee agrees not to accept, nor to become employed by any other employer until said termination date, unless said termination date is effected as hereinafter provided. Page 1 of 15 3. COMPENSATION The City agrees to provide the following compensation to the City Manager during the term of the agreement: A. Compensation & Required Employer Costs (1) Base Salary (a) The annual salary for the position of City Manager shall initially be $170,000. (b) The City Manager shall be paid at the same intervals and in the same manner as regular City employees. (c) During the term of this Agreement, the City Managers salary shall be maintained at no less than 15% more than the next highest paid City employee. (2) Annual Performance Evaluation (a) Annual performance evaluations are an important way for the City Council and City Manager to ensure effective communications about expectations and performance. (b) The City Council recognizes that for the City Manager to respond to its needs and to grow in the performance of the City Manager's job, the City Manager needs to know how the City Council Members evaluate the City Manager's performance. (c) To assure that the City Manager gets this feedback, the City Council shall conduct an evaluation of the City Manager's performance at least once each year. The City Council and the City Manager agree that performance evaluations, for the purpose of mid-course corrections, may occur quarterly or several times during each calendar year. The Parties may use an outside facilitator to assist them in conducting this evaluation. (d) While performance evaluations for the purpose of mid- course corrections may occur several times during the year; the annual evaluation shall occur between May and mid- June of each year. (e) In July of each year the City Manager and the City Council will create goals or other outcome measures that will provide the basis for determining the next year's performance results incentive. Page 2of15 0 0 (f) The annual review and evaluation shall be in accordance with specific criteria developed jointly by the City Council and the City Manager. Such criteria may be added to or deleted as the City Council may from time to time determine in consultation with the City Manager. (i) The City Council and the City Manager shall define such goals and performance objectives as they mutually determine are necessary for the proper operation of the City for the attainment of the City Council's policy objectives, and the City Council and the City Manager shall further establish a relative priority among those goals and performance objectives. (3) Performance Incentive for Results (a) To provide an incentive for the City Manager to produce exceptional results for the organization that go above and beyond the expected fulfillment of the City Manager's job obligations, the City agrees to provide a financial incentive. (i) At the sole discretion of the City Council, the City Manager may earn a financial incentive which the City Council deems appropriate based on the results that the City Manager has been able to produce. (4) Required Employer Costs (a) Federal Insurance Contributions Act (FICA). (i) Old Age Survivor and Disability Income (OASDI). (ii) Medicare. (b) Unemployment Compensation. (c) Public Employees Retirement System (PERS). The City contracts with the California Public Employees' Retirement System for retirement benefits. The City will pay both the City's share and the City Manager's share for participation in the Public Employees' Retirement System. (d) The cost of any fidelity or other bonds required by law for the City Manager. (e) The cost to defend and indemnify the City Manager as provided in Section 7.C below. (f) Workers Compensation. Page 3of15 0 0 B. Basic Benefits (1) Leave Allowances & Holidays The City Manager shall receive the same vacation, sick leave accrual, administrative leave accrual, and other leave & holiday benefits as provided to the Executive Management class of City employees. The City Manager shall be paid for any unused accrued vacation, administrative leave, and sick leave upon either voluntary or involuntary termination of employment. In addition to above named leave allowances & holidays, the City Manager shall be entitled to accrue 7 days of executive leave per year. (2) Automobile The City Manager is on call twenty-four hours per day and shall be given exclusive and unrestricted use of a four-door full-sized City automobile which has a highway rating of at least 25 mpg. The City shall be responsible for all insurance, operation, maintenance, and repair of the automobile. The City shall provide the automobile by either purchasing or leasing the car for the City Manager's use_ (3) Management Incentive In lieu of the City's cell phone reimbursement, wellness program reimbursement, tuition reimbursement, auto allowance, membership & attendance reimbursement for representation at local community based groups (Kiwanis Club, Rotary Club, Chamber of Commerce, etc.), internet connectivity, and any and all other fringe benefits provided to the Executive Management class of employees, the City Manager shall be entitled to Management Incentive Pay in an amount equal to 15% of base salary. This Management Incentive Pay shall be made in equal proportionate amounts each month. C. Perquisites Physical Exam/Fitness. In order to foster the City Manager's good health, the City will cover the cost of a full physical exam each year for the City Manager. Page 4 of 15 4. SECURITY A. Pensions (1) Federal Insurance Contributions Act (FICA) (2) Public Employees Retirement System (PERS) (a) Under Government Code Section 20636(c), the City has elected to report the value of employer-paid member contributions (EPMC) to CaIPERS as additional compensation. (3) Deferred Compensation (a) Section 457 Plan The City will make, in equal proportionate amounts each pay period, an annual contribution equal to the maximum contribution allowed by the Internal Revenue Code and its related regulations (including any age-related and "catch-up" provisions that are now or may in the future become applicable) into a qualified Section 457 Plan from one of the City approved plans as selected by the City Manager. (b) Survivors Continuance The City shall take all actions necessary to secure Section 21548 (Pre-Retirement Optional Settlement 2 Death Benefit), an optional benefit provision with PERS that protects spouses if an employee dies prior to retirement. (c) Internal Revenue Code Compliance All provisions of this Section 5.A are subject to the provisions and limitations of the Internal Revenue Code and its related regulations as amended from time to time. No requirement of any provision of this Section 5.A shall be effective if it would violate any provision of the Internal Revenue Code or its related regulations, and the inability of the City to effectuate such requirements shall not constitute a breach of this Agreement. B. Insurance (1) Health & Welfare Insurances The City Manager shall receive the same health and welfare insurance options that are provided to all other employees. Page 5of15 • (2) (3) • Disability Insurance (a) Short Term (b) Long Term (c) State Disability Insurance (SDI) (if applicable) Life Insurance The City will make available to the City Manager a term life insurance policy whereby the City Manager, at the City Manager's own expense, may purchase additional coverage at the same or more favorable rates. 5. SEPARATION A. B. Resignation/Retirement The City Manager may resign at any time and agrees to give the City at least 45 days advance written notice of the effective date of the City Manager's resignation, unless the Parties otherwise agree in writing. If the City Manager retires from full time public service with the City, the City Manager may provide six months' advance notice. The City Manager's actual retirement date will be mutually established. Termination & Removal (1) Manager is an at-will employee serving at the pleasure of the City Council as provided in Government Code Section 36506. (2) The City Council may remove the City Manager at any time, with or without cause, by a majority vote of its members. Notice of termination shall be provided to the City Manager in writing. Termination as used in this agreement shall also include requests that the City Manager resign, a reduction in salary or other financial benefits of the City Manager (including a general City Management salary reduction), a material reduction in the powers and authority of the City Manager, or the elimination of the City Manager's position. Any such notice of termination or act constituting termination shall be given at or effectuated at a duly noticed regular meeting of the City Council. (3) Given the at-will nature of the position of City Manager, an important element of the employment agreement pertains to termination. It is in both the City's interest and that of the City Manager that any separation of the City Manager is done in a businesslike manner. Page 6of15 • • C. Severance Pay (1) In the event the City Manager is terminated by the City Council during such time that the City Manager is willing and able to perform the City Manager's duties under this Agreement, then in that event the City agrees to pay the City Manager a lump sum cash payment equal to six (6) months' base salary then in effect as provided herein. (2) Beginning on July 1, 2008, the City Manager shall accrue an additional three months of severance pay, for a total of nine (9) months of severance pay. (3) Beginning on July 1, 2009, the City Manager shall accrue an additional three months of severance pay, for a total of twelve (12) months of severance pay. (4) Beginning on July 1, 2010, the City Manager shall accrue an additional three months of severance pay, for a total of fifteen (15) months of severance pay. (5) Beginning on July 1, 2011, the City Manager shall accrue an additional three months of severance pay, for a total of eighteen (18) months of severance pay. (6) All payments required under Sections 5.C (1), (2), (3), (4), and (5) are subject to and shall be interpreted to comply with the limitations set forth in Government Code Section 53260. D. Separation for Cause (1) Notwithstanding the provisions of Section 5.C, the City Manager may be terminated for cause. As used in this section, "cause" shall mean only one or more the following: (a) Conviction of a felony; (b) Continued abuse of non-prescription drugs or alcohol that materially affects the performance of the Manager's duties; or (c) Repeated and protracted unexcused absences from the City Manager's office and duties. (2) In the event the City terminates the City Manager for cause, then the City may terminate this Agreement immediately, and the City Manager shall be entitled to only the compensation accrued up to the date of termination, payments required by Section 5.E below, and such other termination benefits and payments as may be required by law. In this circumstance, the City Manager shall not be entitled to any severance benefits provided by Section 5.C. Page 7 of 15 0 0 (3) In the event the City terminates the City Manager for cause, the City and the City Manager agree that neither Party shall make any written or oral statements to members of the public or the press concerning the City Manager's termination except in the form of a joint press release which is mutually agreeable to both Parties. The joint press release shall not contain any text or information that would be disparaging to either Party. Provided, however, that either Party may verbally repeat the substance of any such press release in response to inquiries by members of the press or public. E. Payment for Unused Leave Balance (1) On separation from City employment, the City Manager shall be paid for all unused accrued leave allowances provided in Section 3.13 above, and/or the City Manager may apply the leave time to service credit for retirement purposes if permitted by PERS. (2) In the event the City Manager dies while employed by the City under this Agreement, the City Manager's beneficiaries or those entitled to the City Manager's estate shall be entitled to the City Manager's earned salary and any in-lieu payments for accrued benefits, including compensation for the value of all accrued leave balances. 6. COMMITMENTS AND UNDERSTANDINGS A. The City Manager's Commitments (1) Duties & Authority (a) The City Manager shall be the chief executive officer of the City and be responsible to the City Council for the proper administration of all affairs of the City. (b) The City Manager shall perform all of the duties of the City Manager as set forth in Section 2.08 of the Rosemead Municipal Code, the California Government Code, and City policies and procedures approved by the City Council, as may be provided from time to time. (c) The City Council may also designate the City Manager as the chief executive of other City-related legal entities. Such other legal entities could include a redevelopment agency, financing authorities, and joint powers authorities. (d) The City Manager shall administer and enforce policies established by the City Council and promulgate rules and regulations as necessary to implement City Council policies. Page 8 of 15 0 0 (e) To accomplish this, the City Manager shall have the power and shall be required to: (i) Attend all meetings of the City Council, unless excused by the Mayor, and take part in the discussion of all matters before the City Council. The City Manager shall receive notice of all regular and special meetings of the City Council. (ii) Review all agenda documents before preparing the agenda for any regular or special meetings of the City Council. The City Manager may publicly endorse or oppose any proposed agenda items placed on the agenda by persons other than the City Manager or the City Manager's staff. (iii) Direct the work of all elective and appointive City officers and departments that are the concern and responsibility of the City Council, except those that are directly appointed by or report directly to the City Council. The City Manager may undertake any study or investigation the City Manager believes is necessary or desirable and shall make any study or investigation the City Council directs. The City Manager shall endeavor to implement changes that the City Manager believes will result in greater efficiency, economy, or improved public service in the administration of City affairs. (iv) Recommend to the City Council from time to time, adoption of such measures as the City Manager may deem necessary or expedient for the health, safety, or welfare of the community or for the improvement of administrative services. (v) Consolidate or combine offices, positions, departments, or units under the City Manager's jurisdiction. The City Manager may be the head of one or more City departments. (vi) Conduct research in administrative practices in order to bring about greater efficiency and economy in City government, and develop and recommend to the City Council long-range plans to improve City operations and prepare for future City growth and development. (vii) Provide management training and develop leadership qualities among department heads and staff as necessary to build a City management team that can plan for and meet future challenges. Page 9 of 15 • • (viii) Exercise control of City govemment in emergencies as authorized by the Municipal Code and California law. B. City Commitments (1) The City shall provide the City Manager with the compensation, incentives and benefits, specified elsewhere in this Agreement. (2) The City agrees to pay the professional dues and subscriptions on behalf of the City Manager which are necessary for the City Manager's continuation and full participation in national, regional, state, or local associations and organizations necessary and desirable for the good of the City, and for the City Manager's continued professional participation and advancement. (3) The City agrees to pay the travel and subsistence expenses of the City Manager to pursue official and other functions for the City, and meetings and occasions to continue the professional development of the City Manager, including, but not limited to, national, regional, state, and local conferences, and governmental groups and committees upon which the City Manager serves as a member. C. City Council Commitments (1) The City Council sets policy for the govemance and administration of the City, and it implements its policies through the City Manager. (2) The City Council recognizes that to meet the challenges facing the City they must exercise decisive policy leadership. As one step in carrying out this leadership responsibility, the City Council commits to spending time each year outside of regular City Council meetings to work with the City Manager and staff on setting goals and priorities for the City govemment, and to work on issues that may be inhibiting the maximal achievement of City goals. (3) Except for the purpose of inquiry, the City Council and its members shall deal with all subordinate City employees, officers, contractors, and consultants solely through the City Manager or the City Manager's designee, and neither the City Council nor any member thereof shall give orders to any subordinate of the City Manager, either publicly or privately. (4) The City Council agrees none of its individual members will order the appointment or removal of any person to any office or employment under the supervision and control of the City Manager. (5) The City Council agrees that any criticism of a City staff member shall be done privately through the City Manager. Page 10 of 15 • • D. ICMA Code of Ethics (1) The Parties acknowledge that the City Manager is a member of the International City Management Association ("ICMA"). The Parties mutually desire that the City Manager be subject to and comply with the ICMA Code of Ethics (Attachment A). (2) The City Manager commits to comply with the ICMA Code of Ethics. (a) The City and the City Council nor any of its any order, direction, o Manager to violate the Council agree that neither the City members will give the City Manager r request that would require the City ICMA Code of Ethics. MISCELLANEOUS PROVISIONS A. Amendments This Agreement may be amended at any time by mutual agreement of the City and the City Manager. Any amendments are to be negotiated, put in writing, and adopted by the City Council. B. Conflict of Interest (1 } The City Manager shall not engage in any business or transaction or shall have a financial or other personal interest or association, direct or indirect, which is in conflict with the proper discharge of official duties or would tend to impair independence of judgment or action in the performance of official duties. Personal as distinguished from financial interest includes an interest arising from blood or marriage relationships or close business, personal, or political associations. This section shall not serve to prohibit independent acts or other forms of enterprise during those hours not covered by active City employment, providing such acts do not constitute a conflict of interest as defined herein. (2) The City Manager shall also be subject to the conflict of interest provisions of the California Government Code and any conflict of interest code applicable to the City Manager's City employment. (3) The City Manager is responsible for submitting to the City Clerk the appropriate Conflict of Interest Statements at the time of appointment, annually thereafter, and at the time of separation from the position. C. Indemnification (1) To the full extent of the law as provided by the California Torts Claims Act (Government Code Section 810 et seq.) and the Page 11 of 15 • • indemnity provisions of this Agreement, whichever shall provide the greatest protection to the City Manager, the City shall defend and indemnify the City Manager against and for all losses sustained by the City Manager in direct consequences of the discharge of the City Manager's duties on the City's behalf for the period of the City Manager's employment. (2) The City shall defend, save harmless and indemnify the City Manager against any tort, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of the City Manager's duties as City Manager. The City may compromise and settle any such claim or suit and pay the amount of any settlement or judgment rendered thereon. (3) Whenever the City Manager shall be sued for damages arising out of the performance of the City Manager's duties, the City shall provide defense counsel for the City Manager in such suit and indemnify the City Manager from any judgment rendered against the City Manager; provided that such indemnity shall not extend to any judgment for damages arising out of any willful wrongdoing. This indemnification shall extend beyond termination of employment and the otherwise expiration of this Agreement to provide protection for any such acts undertaken or committed in the City Manager's capacity as City Manager, regardless of whether the notice of filing of a lawsuit occurs during or following employment with the City. This indemnity provision shall survive the termination of the Agreement and is in addition to any other rights or remedies that the City Manager may have under the law. (4) The City and all parties claiming under or through it, hereby waives all rights of subrogation and contribution against the City Manager, while acting within the scope of the City Manager's duties, from all claims, losses and liabilities arising out of or incident to activities or operations performed by or on behalf of the City or any party affiliated with or otherwise claiming under or through it, regardless of any prior, concurrent, or subsequent active or passive negligence by the City Manager. (5) In the event that the City Manager shall serve as the chief executive of other City-related legal entities as provided in Section 6.A(1 )(c) above, then each provision of this Section 7.C shall be equally applicable to each City-related legal entity as though set forth in an indemnity agreement between the City Manager and that legal entity. The City hereby guarantees the performance of this indemnity obligation by the City-related legal entity, and shall indemnify and hold the City Manager harmless against any failure or refusal by City-related legal entity to perform its obligations under this Section 7.C. Page 12 of 15 • 0 D. Severability If any clause, sentence, part, section, or portion of this Agreement is found by a court of competent jurisdiction to be illegal or unenforceable, such clause, sentence, part, section, or portion so found shall be regarded as though it were not part of this Agreement and the remaining parts of this Agreement shall be fully binding and enforceable by the Parties hereto. E. Laws Affecting Title In addition to those laws affecting a City Manager, the City Manager shall have the same powers, rights and responsibilities as a Chief Executive Officer, City Administrative Officer, Administrator, and/or City Administrator as those terms are used in local, state or federal laws. F. Jurisdiction and Venue This Contract shall be construed in accordance with the laws of the State of California, and the Parties agree that venue shall be in Los Angeles County, California. G. Entire Agreement This Contract represents the entire agreement of the Parties, and no representations have been made or relied upon except as set forth herein. This Contract may be amended or modified only by a written, fully executed agreement of the Parties. H. Notice Any notice, amendments, or additions to this Agreement, including change of address of either party during the term of this Agreement, which the City Manager or the City shall be required, or may desire, to make shall be in writing and shall be sent by prepaid first class mail or hand-delivered to the respective Parties as follows: (1) If to the City: Rosemead City Hall 8838 East Valley Boulevard Rosemead, CA 91770 ATTN: Mayor & City Council (2) If to the City Manager: Oliver Chi 7051 Via Savino Place Rancho Cucamonga, CA 91739 Page 13 of 15 8. EXECUTION IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first above written. City City Manager CITY OF ROSEMEAD OLIVER CHI A Municipal Corporation An Individual By John Tran Mayor ATTEST: By: Nina Castruita City Clerk APPROVED AS TO FORM: By: Bonifacio "Bonny" Garcia City Attorney By: Page 14 of 15 Oliver Chi 0 • ATTACHMENT A ICMA Code Of Ethics The ICMA Code of Ethics was adopted by the ICMA membership in 1924, and most recently amended by the membership in May 1998. The mission of ICMA is to create excellence in local govemance by developing and fostering professional local government management worldwide To further this mission, certain principles, as enforced by the Rules of Procedure, shall govern the conduct of every member of ICMA, who shall 1 Be dedicated to the concepts of effective and democratic local government by responsible elected officials and believe that professional general management is essential to the achievement of this objective 7 Refrain from all political activities which undermine public confidence in professional administrators Refrain from participation in the election of the members of the employing legislative body 2 Affirm the dignity and worth of the services rendered by government and maintain a constructive, creative, and practical attitude toward local government affairs and a deep sense of social responsibility as a trusted public servant 3. Be dedicated to the highest ideals of honor and integrity in all public and personal relationships in order that the member may merit the respect and confidence of the elected officials, of other officials and employees, and of the public 4. Recognize that the chief function of local government at all times rs to serve the best interests of all of the people, ti. Submit policy proposals to elected officials, provide them with facts and advice on matters of policy as a basis for making decisions and setting community goals, and uphold and implement local govemment policies adopted by elected officials 8 Recognize that elected representatives of the people are entitled to the credit for the establishment of local government policies, responsibility for policy execution rests with the members 8 Make it a duty continually to improve the member's professional ability and to develop the competence of associates in the use of management techniques 9 Keep the community informed on local govemment affairs, encourage communication between the citizens and all local government officers; emphasize friendly and courteous service to the public; and seek to improve the quality and image of public service 10.Resist any encroachment on professional responsibilities, believing the member should be free to carry out official policies without interference, and handle each problem without discrimination on the basis of principle and justice 11. Handle all matters of personnel on the basis of merit so that fairness and impartiality govern a members decisions pertaining to appointments, pay adjustments, promotions, and discipline 12 Seek no favor, believe that personal aggrandizement or profit secured by confidential information or by misuse of public time is dishonest Page 15 of 15