CC 2016-08-23_09e Appointment of Interim City Manager
MEMORANDUM
TO: CITY COUNCIL
FROM: DEBBIE MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES
SUBJECT: CONSIDERATION OF A RESOLUTION AND EMPLOYMENT
AGREEMENT APPOINTING ROBERT K. MCFALL TO THE POSITION
OF INTERIM CITY MANAGER
DATE: AUGUST 23, 2016
RECOMMENDATION:
It is recommended the City Council adopt a Resolution appointing Robert K McFall to
the position of Interim City Manager and authorize the Mayor to execute the
employment agreement.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The employment agreement specifies an hourly rate of $86.06. Total costs will depend
on the length of service of the Interim City Manager; however it will not exceed 960
hours over eight months, for a total cost of approximately $82,617.60. The City Manager
program staffing budget has a balance of approximately $148,500 for FY 2016-17.
BACKGROUND:
The City is currently recruiting for the position of City Manager and is in need of an
Interim City Manager to fill this role during the recruitment, which is expected to take
approximately eight months. On August 9, 2016 the City Council authorized an
agreement with Regional Government Services (RGS), which is a governmental joint
powers authority that assists other government agencies with short-term staffing needs,
to facilitate the hiring of Mr. McFall as Interim City Manager. That agreement specified
an hourly billing rate of $125 plus a monthly housing allowance of $1,700. Subsequent
to the Council’s action, Mr. McFall decided not to enter into an employment agreement
with RGS due to complexities associated with hiring a California Public Employees’
Retirement System (“CalPERS”) retiree. As such, the agreement with RGS was not
executed by the City and it is recommended that the City not move forward with that
agreement.
ANALYSIS OF ISSUES:
Employment of a person that is retired from CalPERS, a retired annuitant, is subject to
certain criteria and regulations specified in the Government Code. These rules are
intended to protect the public’s interest by enabling CalPERS contracting agencies the
ability to re-employ retirees, and protect the retirement system from inappropriate use or
Item 9.e. - Page 1
CITY COUNCIL
CONSIDERATION OF A RESOLUTION AND EMPLOYMENT AGREEMENT
APPOINTING ROBERT K. MCFALL TO THE POSITION OF INTERIM CITY MANAGER
AUGUST 23, 2016
PAGE 2
abuse. CalPERS recognizes that retirees can play an important role in keeping city
business running, particularly in short term or emergency situations, but also provides
limitations on their service. The Government Code provides specific guidance on
employing a CalPERS retiree without reinstatement from retirement or loss or
interruption of retirement benefits. Specifically, Government Code Section 21221(h)
applies in the City’s circumstances, where the City is seeking to fill a vacant position
during the recruitment for a permanent appointment and the position requires
specialized skills. Key terms of hiring the retired annuitant under this Code Section are:
1. Limited duration work & retiree skills: The appointment needs to be clearly
of limited duration and the vacant position must require specialized skills,
which are possessed by the retiree.
2. 960 hour limit: Retirees can work a maximum of 960 hours each fiscal year,
regardless of the number of CalPERS contracting employers they work for.
3. Rate of Pay requirement: The compensation paid to any retiree must be
within the monthly rate of pay range (not more or less than the City Manager
pay range) and no other benefit, incentive, compensation in lieu of benefits, or
other form of compensation can be paid in addition to this hourly pay rate.
4. Open recruitment: The interim appointment must be for a vacancy during
recruitment of a permanent appointment.
5. Enrollment in the my|CalPERS system: The City must report the pay rate
and hours worked to CalPERS through the system currently used to report
payroll.
The Government Code Section applies to hiring CalPERS retired annuitants, but does
not apply to independent contractors. The agreement with RGS specified that RGS
would provide an independent contractor to the City, which RGS believes is the
appropriate and legally defensible contractual relationship. The agreement with RGS did
contain a provision indemnifying the City should CalPERS determine that Mr. McFall
was not acting as an independent contractor. Mr. McFall’s agreement with RGS,
however, did not include that same protection. Consequently, Mr. McFall chose not to
be employed by RGS, therefore it is recommended that the City secure Mr. McFall’s
services directly as a retired annuitant, rather than through a third party employment
agency.
The accompanying Resolution and Employment Agreement identify the detailed terms
of the Interim City Manager engagement. Employing Mr. McFall in this manner will help
ensure that CalPERS regulations related to retirees are followed and will result in a
lower cost to the City. The RGS contract called for an hourly billing rate of $125 plus a
monthly housing allowance of $1,700. Assuming 960 hours of work, the total cost over
eight months would be approximately $133,600. Directly hiring Mr. McFall will cost
$86.06 per hour with no additional housing allowance, for a total of $82,617.60, thus
saving the City approximately $51,000.
Item 9.e. - Page 2
CITY COUNCIL
CONSIDERATION OF A RESOLUTION AND EMPLOYMENT AGREEMENT
APPOINTING ROBERT K. MCFALL TO THE POSITION OF INTERIM CITY MANAGER
AUGUST 23, 2016
PAGE 3
Mr. McFall is very familiar with the City of Arroyo Grande, having previously assisted the
City with several departmental assessments, executive goal setting and team building,
facilitation of interdepartmental issues, and as the Interim City Manager in 2015. His
rapport with the department head team and other city employees will enable him to
quickly come up to speed on issues and concerns and be an effective leader for the
City. He is exceptionally well qualified to fill the Interim City Manager position for the
City of Arroyo Grande.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
Adopt the Resolution and Employment Agreement
Modify the Resolution and Employment Agreement
Do not adopt the Resolution and Employment Agreement; or
Provide direction to staff regarding City Council alternatives.
ADVANTAGES:
Hiring an Interim City Manager will provide the leadership and management for the City
to continue accomplishing required duties while recruiting for a permanent City
Manager. Mr. McFall’s familiarity and rapport with City staff will enable him to step into
this role quickly and continue moving the City forward during this time.
DISADVANTAGES:
The only disadvantage is the cost; however it is anticipated to be lower than previously
estimated and is within the approved budget for the City Manager position.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in accordance with Government Code Section 54954.2.
Item 9.e. - Page 3
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE APPOINTING ROBERT K.
MCFALL TO THE POSITION OF INTERIM CITY
MANAGER AND AUTHORIZING THE MAYOR TO
EXECUTE THE EMPLOYMENT AGREEMENT
WHEREAS, the city manager position within the City of Arroyo Grande (“City”) is vacant
and the City is recruiting for a permanent city manager; and
WHEREAS, the position of city manager requires specialized skills; and
WHEREAS, the City of Arroyo Grande desires to appoint Robert K. McFall as an interim
appointment retired annuitant to the position of Interim City Manager under Government
Code sections 7522.56 and 21221(h), effective August 24, 2016; and
WHEREAS, Government Code section 21221(h) allows a retired person to serve in an
interim appointment to a vacant position during recruitment for a permanent
appointment that requires specialized skills; and
WHEREAS, Robert K. McFall has demonstrated through his experience and work
history that he possesses the required specialized skills; and
WHEREAS, this section 21221(h) appointment shall only be made once to this vacant
position, and therefore will end no later than May 31, 2017; and
WHEREAS, the entire employment agreement between Robert K. McFall and the City
of Arroyo Grande has been reviewed by this body and is attached herein as Exhibit “A”
(“Employment Agreement”); and
WHEREAS, this appointment, including all matters, issues, terms or conditions related
to this employment and appointment shall be limited to 960 hours per fiscal year; and
WHEREAS, pursuant to Government Code section 21221(h), the compensation paid to
retirees cannot be less than the minimum nor exceed the maximum monthly base salary
paid to other employees performing comparable duties as listed on the pay schedule for
the vacant city manager position, divided by 173.333 to equal the hourly rate; and
WHEREAS, the monthly base salary rate paid to Robert K. McFall will be $14,917.00
and the hourly equivalent is $86.06; and
Item 9.e. - Page 4
RESOLUTION NO.
PAGE 2
WHEREAS, Robert K. McFall has not and will not receive any other benefit, incentive,
compensation in lieu of benefit, or any other form of compensation in addition to this pay
rate.
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo
Grande as follows:
1. That the above recitals are true and correct and incorporated herein.
2. The City Council does hereby appoint Robert K. McFall to the position of Interim
City Manager and hereby certifies the nature of the appointment of Robert K.
McFall as described herein and detailed in the attached Employment Agreement,
and that this appointment is necessary to fill the critically needed position of
Interim City Manager for the City of Arroyo Grande, until the recruitment process
is completed.
3. That the Mayor is authorized, on behalf of the City Council, to execute the
Employment Agreement, a copy of which is attached as Exhibit A, setting forth
the terms and conditions of employment for Robert K. McFall.
On motion of Council Member , seconded by Council Member , and on
the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this 23rd day of August, 2016.
Item 9.e. - Page 5
RESOLUTION NO.
PAGE 3
JIM HILL, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
GEOFF ENGLISH, ACTING CITY MANAGER
APPROVED AS TO FORM:
HEATHER K. WHITHAM, CITY ATTORNEY
Item 9.e. - Page 6
CITY OF ARROYO GRANDE
EMPLOYMENT AGREEMENT
THIS AGREEMENT, (hereinafter referred to as the “Agreement”) is made and entered
into this 23rd day of August 2016, by and between the City of Arroyo Grande, a
municipal corporation of the State of California (hereinafter referred to as the “City”) and
Robert K. McFall (hereinafter referred to as “McFall”).
SECTION 1 EMPLOYMENT
A. The City agrees to and shall employ McFall as Interim City Manager of the City of
Arroyo Grande. McFall agrees to perform the functions and duties of the position
of Interim City Manager of the City of Arroyo Grande as described by state law,
the Municipal Code of the City of Arroyo Grande, the job description of the
position of City Manager, and all other duties and functions as the City Council of
the City shall from time to time assign, including participating in the recruitment of
the permanent City Manager.
B. This interim position is created solely for a CalPERS retired annuitant to fill the
vacant position of City Manager during the recruitment to permanently fill the
vacancy, and complies with the provisions of the Post-Retirement Public
Employment under CalPERS and PEPRA Legislation, Government Code §
7522.56 and Government Code § 21221(h).
C. McFall, by virtue of having previously been employed as Assistant City Manager
for the City of Glendale and having 33 years of experience as a municipal
administrator, is uniquely qualified and has the requisite specialized skills,
training and experience to serve as Interim City Manager for the City.
D. McFall agrees to perform all such functions and duties to the best of his abilities
and in a competent and efficient manner.
E. McFall represents that he is a retired annuitant of the California Public
Employees’ Retirement System (“CalPERS”) within the meaning of Government
Code § 21221(h) as of the effective date of this Agreement. McFall
acknowledges that he is restricted to working no more than a combined 960
hours for the City, a state agency, or other CalPERS contracting agencies
(collectively “CalPERS Agencies”) during any fiscal year, and that his
compensation is statutorily limited as provided in Government Code § 21221(h).
McFall represents that he has not received any unemployment compensation
from any CalPERS Agencies during the 12-month period preceding the effective
date of this Agreement, that he has not received a retirement incentive upon
retirement within the meaning of Government Code § 7522.56(g), and that he
has attained normal retirement age within the meaning of Government Code §
21220.5.
EXHIBIT A
Item 9.e. - Page 7
City of Arroyo Grande
Employment Agreement
Robert K. McFall
Page 2 of 6
F. McFall will work an average of approximately thirty-two hours per week, more or
less, depending on City Council direction, not to exceed 960 hours.
G. City shall defend and indemnify McFall in accordance with Government Code
Sections 995 and 825 for any claims or actions arising out of McFall’s acts or
omissions occurring within the scope of his employment as Interim City Manager.
This provision shall survive termination of this Agreement.
SECTION 2 TERM
A. McFall shall serve at the will and pleasure of the City Council. Nothing in this
Agreement shall prevent, limit or otherwise interfere with the right of the City
Council to terminate the employment of McFall at any time and for any reason, or
for no reason.
B. This Agreement shall become effective on August 24, 2016, and unless
otherwise terminated, shall remain in effect until May 31, 2017 and will not
exceed 960 hours in any fiscal year.
C. Nothing in the Section shall or is intended to prevent, limit or otherwise interfere
with the right of the City or McFall to terminate the employment of McFall prior to
the expiration of this Agreement or any extension thereof.
SECTION 3 TERMINATION
A. The City Council and McFall may agree mutually in writing to terminate McFall’s
employment.
B. The City may terminate McFall’s employment at any time with or without cause
by providing two weeks’ notice. Upon termination, McFall shall only be entitled to
the salary then due and owing him through the last day actually worked. McFall
shall not be entitled to any severance under the Agreement.
C. McFall may terminate his employment at any time for any reason by providing
two weeks’ written notice to the City. In the event that McFall provides such
written notice, he shall be entitled to receive at the termination of this
employment only unpaid base wages as may be due and payable under
applicable City rule, regulation or policy, and/or under applicable local, state or
federal law. McFall shall not be entitled to any severance pay or other
compensation at the termination of his employment. During the period
subsequent to McFall’s submission of his notice terminating his employment, he
shall continue to perform his duties as Interim City Manager pursuant to this
Item 9.e. - Page 8
City of Arroyo Grande
Employment Agreement
Robert K. McFall
Page 3 of 6
Agreement unless removed from those duties and/or terminated by the City
Council pursuant to the terms of this Agreement.
D. As required by Government Code § 53260, if the Agreement is terminated, the
maximum cash settlement that McFall may receive shall be an amount equal to
the monthly salary of McFall multiplied by the number of months left on the
unexpired term of this Agreement. As stated above, McFall shall not be entitled
to any cash settlement, severance pay or other compensation upon termination
of this Agreement.
SECTION 4 SALARY AND COMPENSATION
A. Effective upon the commencement of this Agreement, the City shall pay to
McFall a base salary of $14,917.00 per month or $86.06 per hour. Pursuant to
Government Code § 7522.56, the pay rate is not less than the minimum nor
exceeds the maximum monthly base salary paid to other employees performing
comparable duties. This salary shall be paid on a pro rated basis in regular
installments pursuant to the City’s normal payroll procedures.
B. The City shall deduct or withhold from McFall’s salary any and all sums as McFall
may from time to time direct, or as required by law, including but not limited to,
sums for the payment of federal, state and/or local income taxes, Social Security
and Medicare tax withholding.
C. McFall shall not receive any benefit, incentive, compensation in lieu of benefits,
or other form of compensation in addition to the monthly pay rate.
D. McFall will comply with all applicable CalPERS rules and regulations governing
employment after retirement, including the recordation and reporting of all hours
worked for the City to CalPERS as may be required. The City shall assist in any
such reporting obligation to CalPERS. Additionally, McFall shall keep City
continually informed of any hours worked by McFall for other CalPERS agencies
during the term of this Agreement.
E. The City Council shall fix any other terms and conditions of employment relating
to McFall’s performance as the City Council may from time to time determine,
provided that such other terms and conditions of employment are not contrary to
or inconsistent with the terms set forth in this Agreement, the City’s rules,
regulations and ordinances, local, state and/or federal law.
SECTION 5 COMPLIANCE WITH AB 1344
A. Notwithstanding any other provision of this Agreement, the parties agree to fully
comply with the Government Code sections that are part of AB 1344, as it was
Item 9.e. - Page 9
City of Arroyo Grande
Employment Agreement
Robert K. McFall
Page 4 of 6
effective on January 1, 2012, (“AB 1344”) to the extent that they are applicable to
this Agreement and to fully comply with other applicable law as it exists as of the
date of execution of this Agreement. In that regard, to the extent that they are
applicable to this Agreement, the following Government Code sections are
hereby incorporated into the terms of this Agreement:
Section 53243.1. Reimbursement of legal criminal defense upon conviction of
crime involving office or position.
Section 53243.2. Reimbursement of cash settlement upon conviction of crime
involving office or position.
Section 53243.3. Reimbursement of non-contractual payments upon conviction
or crime involving office or position.
Section 53243.3. Abuse of office or position defined.
B. In addition, AB 1344 also includes Government Code Section 3511.2.
Notwithstanding any other provisions of this Agreement, the City is prohibited
through this Agreement or any amendment thereto or in any other way to provide
an automatic renewal of this Agreement that provides for an automatic
compensation increase in excess of a cost-of-living adjustment or a maximum
cash settlement in excess of certain limits established by Section 3511.2.
SECTION 6 NOTICE
Any notices to be given hereunder by either party to the other in writing may be
effected either by personal delivery or U.S. mail. Mailed notices shall be addressed
to the parties as set forth below, but each party may change its/his address by
written notice given in accordance with this Section. Notices delivered personally will
be deemed communicated as of actual receipt. Mailed notices will be deemed
communicated and received as of three calendar days following the date of mailing.
CITY: City of Arroyo Grande
Attention: Mayor
300 E. Branch Street
Arroyo Grande, CA 93420
Robert K. McFall: _______________________
_______________________
_______________________
_______________________
Item 9.e. - Page 10
City of Arroyo Grande
Employment Agreement
Robert K. McFall
Page 5 of 6
SECTION 7 GENERAL PROVISIONS
A. This Agreement constitutes the sole understanding and agreement of the City
and McFall with respect to the matters set forth herein and supersedes any and
all prior negotiations, statements, instructions, representations or agreement,
whether written or oral.
B. The parties agree and acknowledge that no representations, inducements,
promises or agreements, oral or otherwise, have been made by any party, or by
anyone acting on behalf of any party, which are not contained herein and that
any agreement, statement or promise not contained in this Agreement shall not
be valid or binding on either party.
C. Any amendment to this Agreement shall be valid only if in writing approved and
signed by both parties, unless otherwise specified in this Agreement.
D. If any provision of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remaining provisions shall nevertheless
continue in full force and effect.
E. If any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to recover reasonable
attorney’s fees and costs in addition to any other relief to which that party may be
entitled.
F. This Agreement shall be governed by and construed in accordance with the laws
of the State of California. Any action to interpret or enforce the terms of this
Agreement shall be held exclusively in a state court in San Luis Obispo County,
California.
G. The failure of either party to insist upon strict compliance with any of the terms,
covenants, or conditions of this Agreement by the other party shall not be
deemed a waiver of that term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power at any one time or times be deemed a
waiver or relinquishment of that right or power for all or any other times.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
date and year first written above.
City: McFall:
Jim Hill Robert K. McFall
Mayor
Item 9.e. - Page 11
City of Arroyo Grande
Employment Agreement
Robert K. McFall
Page 6 of 6
ATTEST:
___________________________
Kelly Wetmore,
City Clerk
APPROVED AS TO CONTENT:
___________________________
Geoff English,
Acting City Manager
APPROVED AS TO FORM:
___________________________
Heather K. Whitham,
City Attorney
Item 9.e. - Page 12