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it JULY 10. 1811 * MEMORANDUM
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TO: CITY COUNCIL �/
FROM: TIMOTHY J. CARMEL, CITY ATTORNEY/
SUBJECT: CONSIDERATION OF CITY MANAGER EMPLOYMENT AGREEMENT
DATE: APRIL 22, 2014
RECOMMENDATION:
It is recommended the City Council approve a new Employment Agreement
("Agreement") with the City Manager.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Approval of the Agreement will result in an increase to the FY 2014-15 General Fund
Budget of $15,236. The budget will be amended to reflect the change as part of the
year-end budget amendments. Sufficient funds are projected to be available to cover
this cost and maintain a balanced budget. Staff has also prepared long-range financial
projections to ensure the costs can be maintained in the future with ongoing revenues,
which is determined to be feasible under a number of alternative economic scenarios.
BACKGROUND:
The City Manager has not received an equity adjustment in salary for over six (6) years.
His salary is more than 23% below the median city manager salary in San Luis Obispo
County.
ANALYSIS OF ISSUES:
The City Manager has effectively led the City through the Great Recession with almost
no reduction or disruption in City services. His creativity in restructuring City
departments and best utilizing personnel and resources were critical in moving the City
through economic hard times.
The proposed salary increase for the City Manager is consistent with the criteria and
formula established for the management compensation adjustments:
• A 3% Cost of Living Adjustment, effective July 4, 2014; and
• An equity adjustment of 7.5% based upon his current salary being 23.04% below
the County median for city managers, effective July 4, 2014.
Item 8.g. - Page 1
CITY COUNCIL
CONSIDERATION OF CITY MANAGER EMPLOYMENT AGREEMENT
APRIL 22, 2014
PAGE 2
With the salary increase, the City Manager will still be more than 12% below the median
salary for city managers within the County.
In order to effectuate the change to the City Manager's salary a new Employment
Agreement has been prepared. It should be noted that the new Agreement includes a
provision (added to Section 6.B.) mandated by the passage of AB 1344 in response to
the abuses in Bell, California. It requires reimbursement of any cash settlement related
to termination of employment if the employee is convicted of a crime involving an abuse
of his or her position.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
- Approve the proposed Employment Agreement;
- Modify as appropriate and approve the Employment Agreement;
- Do not approve the Employment Agreement;
- Provide direction to staff.
ADVANTAGES:
Approval of the proposed Employment Agreement will help address a significant
inequity in the City Manager's compensation.
DISADVANTAGES:
The recommendation will increase costs.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, April 17, 2014 and on the
City's website on Friday, April 18. No comments were received.
Item 8.g. - Page 2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 22nd day of April, 2014, by and
between the CITY OF ARROYO GRANDE, a municipal corporation of the State of
California (the "City"), and STEVEN DUANE ADAMS, an individual (the "Employee"),
both of whom understand as follows:
WITNESSETH:
WHEREAS, City desires to continue to employ the services of Employee as the City
Manager as provided by State law and the Arroyo Grande Municipal Code; and
WHEREAS, it is the desire of City to establish certain conditions of employment and to
set working conditions of Employee; and
WHEREAS, it is the desire of City to (a) secure and retain Employee and to provide
inducement for him to remain in such employment; (b) to make possible full work
productivity by assuring Employee's morale and peace of mind with respect to future
security; (c) to act as a deterrent against malfeasance or dishonesty for personal gain
on the part of Employee; (d) to provide a just means for terminating Employee's
services at such time as he may be unable to fully discharge his duties or when City
may desire to otherwise terminate his employment; and
WHEREAS, Employee desires to continue employment as City Manager of City; and
WHEREAS, this Agreement shall supersede and replace the previous Employment
Agreement between the parties dated October 22, 2013.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties agree as follows:
Section 1: Term.
A. City hereby agrees to continue to employ Employee as City Manager for an
indefinite term.
B. Nothing in this Agreement shall prevent, limit, or otherwise interfere with the
right of Employee to resign at any time from his position with City, subject only
to the provision set forth in Section 6, Paragraph A., of this Agreement.
C. Nothing in this Agreement shall prevent, limit, or otherwise interfere with the
right of the City Council to terminate the services of Employee at any time, with
or without good cause, subject only to the provisions set forth in Section 6,
Paragraphs B. and C., of this Agreement.
Item 8.g. - Page 3
EMPLOYMENT AGREEMENT— STEVEN D. ADAMS
Page 2 of 6
D. Except as otherwise specified herein, Employee agrees to remain in the
exclusive employment of City and not become employed by any other employer
until a termination date is effected as hereinafter provided.
Section 2: Duties.
City hereby agrees to continue to employ Employee as City Manager to perform the
functions and duties specified in the Arroyo Grande Municipal Code and as provided by
State and Federal law and to perform other legally permissible and proper duties and
functions as the City Council shall from time to time assign.
Section 3: Salary.
City agrees that Employee's annual base salary shall be increased to $157,294
commencing on July 4, 2014, which increase includes both an equity adjustment and a
cost of living increase for fiscal year 2014-15. The annual base salary is payable in
equal installments at the same time as other employees of City are paid.
Section 4: Other Compensation.
City agrees to provide Employee additional compensation and benefits as provided to
other management employees of the City, and any future overall cost of living
adjustments approved by the City Council for management employees.
Section 5: Performance Evaluation.
City agrees to increase the base salary and/or other benefits of Employee in such
amounts and to such extent as the City Council may determine that it is desirable to do
so on the basis of annual performance evaluation which shall occur no later than the
end of October of each year.
The performance evaluation shall be in accordance with specific criteria developed
jointly by the City Council and Employee. Such criteria may be added to or deleted as
the City Council may from time to time determine in consultation with Employee.
Section 6. Resignation and Termination.
A. In the event Employee voluntarily resigns his position with City, Employee shall
give City forty-five (45) days written notice in advance, unless the parties
otherwise agree. Should Employee fail to give such period of notice, then
Employee shall pay to City as liquidated damages the sum of $40 per working
day for the difference between the number of actual days of prior notice and
forty-five (45) days.
Item 8.g. - Page 4
EMPLOYMENT AGREEMENT— STEVEN D. ADAMS
Page 3 of 6
B. It is understood and agreed that the employment relationship established hereby
shall be "at-will". In the event Employee is terminated by the City Council during
such time that Employee is willing and able to perform his duties under this
Agreement, then, in that event, City agrees to pay Employee a lump sum cash
payment equal to six (6) months salary and benefits in effect at the time of
termination (limited to the following: PERS, medical, dental, and vision
insurance).
Notwithstanding anything to the contrary in this subsection, pursuant to the
requirements set forth in Government Code Section 53243.2, regardless of
the term of this Agreement, if the Agreement is terminated, any cash
settlement related to the termination that Employee may receive from City shall
be fully reimbursed to City if Employee is convicted of a crime involving an
abuse of his office or position.
In the event Employee is terminated for good cause, then City shall have no
obligation to pay the sum designated in this paragraph. For the purpose of this
Agreement, "good cause" shall include, but not necessarily be limited to, any of
the following:
(1) A material breach of the terms of this Agreement;
(2) Misfeasance;
(3) Malfeasance;
(4) A failure to perform his duties in a professional and responsible manner
consistent with generally accepted standards of the profession;
(5) Conduct unbecoming the position of City Manager or likely to bring
discredit or embarrassment to City.
"Good cause" shall not mean a mere loss of support or confidence by a majority of the
Council.
C. In the event City at any time during this Agreement reduces the salary or other
financial benefits of Employee in a greater percentage than an applicable
across-the-board reduction for all employees of City, or in the event City
Item 8.g. - Page 5
EMPLOYMENT AGREEMENT— STEVEN D. ADAMS
Page 4 of 6
refuses, following written notice, to comply with any other provision benefiting
Employee herein, or Employee resigns following a formal suggestion by the City
Council that he resign, then, in that event, Employee may, at his option, be
deemed to be "terminated" at the date of such reduction or such refusal to
comply, within the meaning and context of Paragraph B. above.
Section 7: Outside Professional Activities.
Employee, with prior written approval of the City Council, may undertake outside
professional activities for compensation, including consulting, teaching, speaking, and
writing provided such activities do not interfere with Employee's normal duties and are
not done with any existing vendors or contractors of City. Under no circumstances
shall such outside activities create a conflict of interest with the duties of Employee and
the interests of City.
Section 8: Suspension.
City may suspend Employee with full pay and benefits at any time during the term of
this Agreement.
Section 9: Fringe Benefits.
City shall provide and pay for fringe benefits at the Department Director level in
accordance with the adopted annual Resolution establishing wages and benefits for
management employees.
Section 10: Annual Leave.
Employee shall accumulate Annual Leave in accordance with the adopted annual
Resolution establishing wages and benefits for management employees.
Section 11: Automobile.
Employee shall provide his own automobile. City shall provide Employee a $400
monthly automobile allowance. Employee shall receive no reimbursement for travel
mileage within a fifty (50) mile radius of City; for any required City travel mileage
outside the fifty (50) mile radius, Employee shall be reimbursed for mileage at the rate
as set forth by the City Council.
Section 12: Physical Examination.
Employee may receive an annual physical examination at City's expense.
Item 8.g. - Page 6
EMPLOYMENT AGREEMENT— STEVEN D. ADAMS
Page 5 of 6
Section 13: Other Terms and Conditions of Employment.
City, in consultation with Employee, shall fix, in writing, any such other terms and
conditions of employment, as it may determine from time to time, relating to the
performance of Employee, provided such terms and conditions are not inconsistent
with or in conflict with the provisions of this Agreement, the Arroyo Grande Municipal
Code, or any applicable State or Federal law.
Section 14: Notices.
Notices pursuant to this Agreement shall be given by deposit in the custody of the
United States Postal Services, postage prepaid, addressed as follows:
EMPLOYER: City of Arroyo Grande
Attn: City Clerk
300 E. Branch Street
Arroyo Grande, CA 93420
EMPLOYEE: Steven D. Adams
1597 Chilton Street
Arroyo Grande, CA 93420
Alternatively, notices required pursuant to this Agreement may be personally served in
the same manner as is applicable to 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.
Section 15: General Provisions.
The text herein shall constitute the entire agreement between the parties. Any
amendments to this Agreement must be in writing and executed by both parties.
This Agreement shall be binding upon and inure to the benefit of the heirs at law and
executors of Employee.
This Agreement shall become effective commencing April 22, 2014. If any provision,
or any portion thereof, contained in this Agreement is held unconstitutional, invalid, or
unenforceable, the remainder of this Agreement, or portion thereof, shall be deemed
severable, shall not be affected, and shall remain in full force and effect.
Item 8.g. - Page 7
EMPLOYMENT AGREEMENT— STEVEN D. ADAMS
Page 6 of 6
IN WITNESS WHEREOF, the City of Arroyo Grande has caused this Agreement to be
signed and executed in its behalf by its Mayor, and duly attested by its City Clerk, and
Employee has signed and executed this Agreement, both in duplicate, the day and
year first above written.
EMPLOYEE:
STEVEN D. ADAMS
EMPLOYER:
CITY OF ARROYO GRANDE
By:
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE
CITY CLERK
APPROVED AS TO FORM:
CARMEL & NACCASHA, LLP
By:
TIMOTHY J. CARMEL
CITY ATTORNEY
Item 8.g. - Page 8