HomeMy WebLinkAbout15 - Amendment to City Manager Employment AgreementCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 15
September 28, 2010
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Attorney's Office
Mynette D. Beauchamp, Assistant City Attorney
(949) 644 -3131 or mbeauchampaa.newportbeachca.gov
SUBJECT: AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE
CITY OF NEWPORT BEACH AND DAVID KIFF
F1Y114
To allow the extension of the City Manager's Employment Agreement to establish his residency
in Newport Beach to December 31, 2010.
RECOMMENDATION:
Approve Amendment No. 1 to City Manager's Employment Agreement to extend the time to
December 31, 2010 to establish his residency in the City of Newport Beach.
DISCUSSION:
On August 18, 2009 the City Council approved the City Manager's Employment Agreement
( "Agreement "). Exhibit A to the Agreement states the City Manager has up to 12 months to
establish his residency in the City of Newport Beach. The City Manager is requesting an
extension to December 31, 2010 to establish his residency as his remodeling efforts have not
yet been completed despite his best efforts to do so.
Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act (72 hours
in advance of the public meeting at which the City Council considers the item).
Prepared & Submitted by
„NlynetefD. uc m ,
Assistant City tt hney
MDB:da
Attachment 1: Employment Agreement dated. August 28, 2009
Attachment 2: Amendment No. 1 to the Employment Agreement
ATTACHMENT 1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ( "Agreement ") is made effective as of August a,
2009 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.
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 since January 5, 1998 at which time he was
employed as Assistant to the City Manager.
C. Employee was reclassified to Deputy City Manager in September 1999 and then to
Assistant City Manager on April 20, 2001.
D. Per Section 500 of the City Charter, in making this selection, the City Council has
screened all qualified applicants and other qualified persons known by the Council
to be available.
E. The City Council believes Employee to be the best qualified on the basis of
executive and administrative qualifications, with special reference to the experience
and knowledge of accepted practice in respect to the duties of the office of City
Manager as set forth in the City Charter.
F. The City desires to employ Employee as City Manager and to enter into an
Agreement with Employee upon the terms and conditions in this Agreement.
G. Employee is willing to accept such employment on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as
follows:
Page 1 of 9
SECTION 1: Term
Unless sooner terminated, as provided in this Agreement, this Agreement shall remain
in full force and effect from September 12, 2009 ( "Effective Date'), to and including
September 11, 2011, subject to renewal upon the mutual agreement of both parties.
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 and 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
A. Effective September 12, 2009, Employer agrees to pay Employee an annual
base salary of $225,000 (Two Hundred Twenty -Five Thousand Dollars), subject
to deduction and withholding of any and all sums required for federal or state
income tax, social security tax 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 other 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 the City Manager or the manner (but not the amount)
in which management employees are paid.
B. Employer, by the City Council, and Employee will promptly set mutually agreed
goals for the first twelve (12) months of this Agreement. Employer, by the City
Council, shall conduct an initial evaluation of Employee's performance promptly
following the six (6) month anniversary of the Effective Date of this Agreement,
with annual evaluations beginning at the one year anniversary of the Effective
Date of this Agreement.
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. 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 year. As Employee is a
current employee of City, his current maximum accrual rate will be increased
from 648 hours to 1,000 hours effective September 12, 2009. The right to sell
back accumulated Flex Leave shall be consistent with the Compensation Plan.
B. 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
Page 2 of 9
conclusion of each calendar. Consistent with the Compensation Plan, there is no
right to sell back any accumulated Administrative Leave.
C. 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 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.
D. 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)_
E. 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.
F. 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.
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, airfare (where applicable), ground transportation and meals.
Page 3 of 9
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 this 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 V of the City Charter and Newport Beach Municipal Code
Chapter 2.08, 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. 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, 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 providing one hundred and twenty (120) calendar days prior written
notice to Employer.
SECTION 7: Severance and Benefit Payoff at Termination
A. If Employer terminates this Agreement (thereby terminating Employee's
Employment) without cause, as determined by the affirmative votes of majority of
the members of the City Council at any regular meeting as required by Section
506 of the City Charter, Employer shall provide Employee with forty -five (45)
calendar days written notice and shall pay Employee severance as follows:
1. If termination is effective on or before October 31, 2010, Employer shall
pay Employee a lump sum severance benefit equal to twelve (12) months
of his then applicable base salary, and provide twelve (12) months of
medical benefits as provided under the Compensation Plan beginning on
the Effective Date of termination.
2. If termination is effective from November 1, 2010 up to and including
September 10, 2011, Employer shall pay Employee a lump sum
severance benefit equal to nine (9) months of his then applicable base
salary, and provide nine (9) months of medical benefits as provided under
the Compensation Plan beginning on the Effective Date of termination.
3. If termination, including by non - renewal of this Agreement, is effective on
September 11, 2011 or any date thereafter, Employer shall pay Employee
a lump sum severance benefit equal to six (6) months of his then
applicable base salary, and provide six (6) months of medical benefits as
provided under the Compensation Plan beginning on the Effective Date of
termination.
Page 4 of 9
B. If Employer terminates this Agreement (thereby terminating Employee's
Employment) with cause, as determined by the affirmative votes of majority of
the members of the City Council at any regular or specially noticed meeting,
Employee shall not be entitled to any severance. 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. A pattern of repeated, willful and intentional failure to carry out materially
significant and legally constituted policy decisions of the City Council
made by the City Council as a body; and
5. Any other intentional or grossly negligent action or inaction by Employee
that materially and substantially: (a) impedes or disrupts the operations of
Employer or its organizational units; (b) is detrimental to employee or
public safety; (c) violates properly established rules or procedures of
Employer causing a material and substantial adverse impact on Employer;
or (d) has a material and substantial adverse effect on Employer's
interests as clearly defined and delineated by properly established City
Council action taken by the Council as a body, policy, regulations,
ordinances, or Charter provisions of Employer.
C. Except as otherwise mutually agreed, any dispute as to whether severance is
excused under Section 7, Paragraph B, Sub - Paragraphs 3, 4 and 5, above, shall
be referred to binding arbitration before a single neutral arbitrator selected from a
list of seven (7) arbitrators requested from the California State Mediation and
Conciliation Service. Employer will strike the first name and the parties will
alternate striking names until one person is left who shall be designated as the
arbitrator. The arbitrator's decision will be final and binding with no right of
appeal.
D. Consistent with the provisions of Section 506 of the City Charter, in no event may
Employee be terminated within ninety (90) days after any municipal election for
the selection or recall of one or more members of the City Council.
E. If Employee terminates this Agreement (thereby terminating Employee's
Employment), Employee shall not be entitled to any severance.
F. 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).
Page 6 of 9
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
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. All Confidential Information shall be promptly retumed to
the City immediately upon the effective date of any severance of employment.
B. 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: Moving Expenses
Employer shall pay to Employee up to $15,000 (Fifteen Thousand Dollars) to reimburse
Employee for specific relocation expenses actually incurred by Employee upon his
relocation of his residence to Newport Beach should Employee elect to make such a
move. Reimbursement shall be payable no later than six months following the date of
close of escrow of Employee's purchase of a residence in Newport Beach, as more
specifically described in Section 11 herein, or Employee's receiving possession of real
property to be used as his personal residence through a lease with a term of at least
one year.
Page 6 of 9
SECTION 12: Housing Assistance
Employer recognizes and accepts it cannot require Employee to relocate his residence
to the City. Employer shall, however, provide Employee with housing assistance to
enable and encourage Employee to become a resident of Newport Beach substantially
under the terms more specifically provided in Exhibit A hereto. Nothing in this
Agreement is intended to require Employee to relocate his residence to the City.
SECTION 13: Indemnification
Consistent with the California Government Code, Employer shall defend and indemnify
Employee, using legal counsel of Employers choosing, against expense or legal liability
for acts or omissions by Employee occurring within the course and scope of Employee's
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 14: Other Terms and Conditions of Emaloyment
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 15: 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
With a courtesy copy to:
City Attorney
City of Newport Beach
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 7 of 9
I
i
SECTION 16: 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. 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.
Page 8 of 9
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on
the dates reflected below each signature.
EMPLOYER
CITY OF NVEWPORT BEACH,
A Mumct661 Corporation
Date:
APPROVED AS TO FORM
By:,�
David R unt, qit Attorney
Date:
ATTEST: n
By:
Leilani Brown,
City Clerk
EMPLOYEE
By:
D <iff
Date: Av6 14 U0'j
Attachments: Exhibit A — Housing Assistance
A09-00538 Approved Final CMR Agreement
Page 9 of 9
EXHIBIT A
HOUSING ASSISTANCE
Employer shall provide housing assistance to Employee consistent with the following
terms:
• Shared equity ownership generally consistent with past practice. Specifics to be
mutually agreed upon, but with the following general parameters to the extent
feasible:
• City equity contribution of up to $550,000
• Loan encumbrances cannot exceed 50% of purchase price
• The total of City equity contribution and mortgage loans cannot exceed the
purchase price
• City and Kiff to share in appreciation /depreciation of property value on a cost
basis in proportion to initial equity /loan contribution of the parties and reflective of
any quantified, documented personal resources that Kiff invests in remodeling or
improving the property after Kiff's purchase of the property. City must approve
any proposed remodel or improvements that are to be reimbursed pursuant to
the Housing Assistance provisions prior to their construction and agree in writing
to their cost so as to avoid dispute over the issue in the future. The
improvements must be documented hard costs including materials and labor, but
shall not include soft costs such as personal efforts of Kiff or other owners. Kiff
shall have the burden of establishing the cost of all investments into the property
through appropriate documentation.
• Kiff to assume 100% responsibility for debt service, maintenance, taxes and all
expenses associated with the residence
• Kiff to use best efforts to establish residency in Newport Beach within 12 months
of Effective Date of employment agreement
• City equity contribution (as adjusted for appreciation /depreciation) to be
repayable within 12 months of termination of employment or retirement
Employer and Employee shall take all reasonably necessary action in good faith in
order to reach mutual agreement on all other terms and conditions reasonably
necessary to carry out the intent of these provisions. Nothing in this agreement,
however, shall be interpreted as a requirement that Employee relocate his residence to
the City.
Any dispute over the division of equity in property acquired pursuant this these
provisions shall be subject to binding arbitration as set out in Section 7, subsection C of
the Agreement.
Exhibit A.
Page 1 of 1
ATTACHMENT 2
AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN THE CITY OF
NEWPORT BEACH AND DAVID KIFF
THIS AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT ( "Amendment
One ") is entered into this — day of September 2010 by and between the City of
Newport Beach, a California municipal corporation and Charter City ( "City" or
"Employer ") and David Kiff, an individual ( "Kiff' or "Employee ") and is made with
reference to the following:
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 City's Charter.
B. Pursuant to that Employment Agreement dated August 18, 2009 ( "Agreement "),
Employer hired Employee to serve as City Manager upon the terms and
conditions contained in the Agreement.
C. The Parties acknowledge that Kiff is not required to establish residency in the
City under the Agreement, but that the City agreed to provide certain housing
assistance to Kiff if Kiff chose to do so, pursuant to the Housing Assistance
Agreement between the Parties dated October 13, 2009.
D. Kiff has purchased a residence in the City of Newport Beach and has been
actively and diligently pursuing its remodel.
E. The Parties hereto acknowledge that Kiff has used his best efforts to establish
his residency in the City as contemplated in Exhibit A to the Agreement,
however, the remodeling efforts are not yet complete despite Kiff's best efforts to
do so.
F. The Parties hereto desire to enter into this Amendment One to provide additional
time for Kiff to complete the remodel of his residence in Newport Beach and
establish residency in the City.
NOW, THEREFORE, City and Employee mutually desire to amend the agreement and
agree as follows:
1. Section 11 of the Agreement is hereby amended to provide that Employer shall
reimburse Employee for specific relocation expenses as defined therein, except that
such expenses shall be reimbursable to Employee by Employer no later than June 30,
2011.
2. Exhibit A to the Agreement is hereby amended to provide that Kiff shall have up
to and including December 31, 2010 to establish his residency in Newport Beach, which
the Parties hereto acknowledge shall satisfy Kiffs obligations to use best efforts to
establish said residency.
3. Except as expressly modified herein, all other provisions, terms, and covenants
set forth in Agreement shall remain unchanged and shall be in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
One as of the date set forth above.
EMPLOYEE
By: David Kiff
THE CITY OF NEWPORT BEACH,
a Charter City and Municipal Corporation
Keith Curry, Mayor
CITY OF NEWPORT BEACH
ATTEST:
By:
Leilani I. Brown, City Clerk
CITY OF NEWPORT BEACH
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
MynetKz. Beach p, Assistant City Attorney
CITY
OF NEWPORT BEACH
[END OF SIGNATURES]
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