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HomeMy WebLinkAboutC-3262 - City Manager Employment AgreementCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT �AN Agenda Item No. s January 13, 2009 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Homer Bludau, City Manager 949/644 -3000 or hbludau @city.newport- beach.ca.us SUBJECT: Recommendation to Amend the City Manager's Employment Agreement to Provide a Monthly Auto Allowance ISSUE: Does the City Council want to amend the City Manager's employment agreement to match the $500 monthly auto allowance recently provided to the City Attorney under his new contract? RECOMMENDATION: The City Council's City Attorney Recruitment Committee, with Councilman Webb as Chair, recommends the City Manager's employment contract be amended to provide for a $500 monthly auto allowance. BACKGROUND: The City Manager has been employed by contract since May 1999, with his sixth amended employment agreement being entered into in December 2007. That agreement's term is for two years — from September 2, 2007 until September 1, 2009. The City Council has recently successfully concluded a City Attorney recruitment with the hiring of David Hunt, whose employment agreement was approved at the December 9, 2008, Council meeting. That agreement included an auto allowance for the City Attorney in the amount of $500 monthly. DISCUSSION: The City Council's City Attorney Recruitment Committee recommends the City Manager's current employment contract be amended to also provide a $500 monthly auto allowance. The City Manager does not currently receive an auto allowance, and the recruitment of the City Attorney showed it is a general practice that City Managers and staff City Attorneys be provided an auto allowance. The $500 monthly amount being recommended appears to be an average auto allowance for these positions. The Committee believes it is an issue of • City Manager Auto Allowance January 13, 2009 Page 2 fairness that the City Manager should also receive the same benefit being provided to the newly hired City Attorney. Environmental Review: The City Council's approval of this Agenda Item does not require environmental review. Public Notice: This agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the Council considers the item). Submitted by: HOMER L. BLU AU City Manager 9 • • CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Supplemental Agenda Item No. 8 January 13, 2009 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Don Webb, Council Member 949/646 -3133 or dwebb @city.newport- beach.ca.us SUBJECT: Recommendation to Amend the City Manager's Employment Agreement to Provide a Monthly Auto Allowance ISSUE: Does the City Council want to amend the City Manager's employment agreement to match the $500 monthly auto allowance recently provided to the City Attorney under his new contract? • RECOMMENDATION: The City Council's City Attorney Recruitment Committee, with Councilman Webb as Chair, recommends the City Manager's employment contract be amended to provide for a $500 monthly auto allowance and by affirmative action on this matter the City Council authorizes the modification of the City Manager's contract accordingly. BACKGROUND: The City Manager has been employed by contract since May 1999, with his sixth amended employment agreement being entered into in December 2007. That agreement's term is for two years — from September 2, 2007, until September 1, 2009. The City Council has recently successfully concluded a City Attorney recruitment with the hiring of David Hunt, whose employment agreement was approved at the December 9, 2008, Council meeting. That agreement included an auto allowance for the City Attorney in the amount of $500 monthly. DISCUSSION: The City Council's City Attorney Recruitment Committee recommends the City Manager's current employment contract be amended to also provide a $500 monthly auto allowance. The City Manager does not currently receive an auto allowance, and the recruitment of the City Attorney showed it is a general practice that City Managers and staff City Attorneys be • provided an auto allowance. The $500 monthly amount being recommended appears to be an average auto allowance for these positions. The Committee believes it is an issue of • • City Manager Auto Allowance January 13, 2009 Page 2 fairness that the City Manager should also receive the same benefit being provided to the • newly hired City Attorney. Environmental Review: The City Council's approval of this Agenda Item does not require environmental review. Public Notice: This agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the Council considers the item). Submitted by: _ ! R Don Webb Council Member • 40 A! f u 0 FIFTH AMENDED EMPLOYMENT AGREEMENT C_3�'t02- This Fifth Amended Employment Agreement (Fifth Amended Agreement), which is effective as of the 7th of January, 2006, between the City of Newport Beach ("City") and Homer Bludau ("BLUDAU'? is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of City of Newport Beach (Original Agreement); B. The Original Agreement was amended first on February 28, 2000 (First Amended Agreement) and both the Original Agreement and the following three Amended Agreements required periodic evaluation of BLUDAU's performance as City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU's performance over the past twelve months and has determined that his performance warrants an increase in salary and modification of other benefits as specified in this Fifth Amended Agreement. Now, therefore, the Parties agree as follows: SECTION 1 Employment as City Manager City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cites generally and are performed by management employees of other municipalities. SECTION 2 Effective Date/Term This Fifth Amended Agreement shall take effect January 7, 2006 and remain in effect until January 7, 2008 or until amended by the Parties or terminated pursuant to Section 4. SECTION 3 Base Compensation City shall pay BLUDAU an annual base salary of $195,977.00, effective January 7, 2006, in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. Effective January 6, 2007, BLUDAU's annual base salary will increase to $203,806 and remain in effect until this agreement is changed by City Council action. This Fifth Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold from BLUDAU's base salary any and all sum 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. City shall also deduct sums BLUDAU is obligated to pay because of BLUDAU's participation in plans or programs generally described in Section 5 of this Fifth Amended Agreement. SECTION 4 Termination and Severance Pay A. BLUDAU may terminate this Fifth Amended Agreement by giving the City at least forty-five (45) days prior written notice of termination. B. City may terminate this Fifth Amended Agreement, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular or special meeting of the City Council. However, consistent with provisions of the City Charter, this Fifth Amended Agreement may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Fifth Amended Agreement, and any reasons for termination, if deemed appropriate by the City Council, at least forty-five (45) days prior to the effective date of termination. C. In the event this Fifth Amended Agreement is terminated by the City, BLUDAU shall, as of the effective date of termination, receive severance pay equal to one -half (1/2) of his then current annual base salary. However, BLUDAU shall not be entitled to any severance pay if this Fifth Amended Agreement is terminated because of BLUDAU's criminal conduct, malfeasance in office, or gross abuse of discretion. SECTION 5 Employee Benefits A. BLUDAU shall accumulate flex leave at the rate of twenty-six (26) days per year, commencing on the effective date of this Fifth Amended 2 Agreement. BLUDAU shall also be entitled to 120 hours of administrative leave per year. BLUDAU shall not be entitled to any compensation, or compensatory time off, for overtime. BLUDAU shall not be entitled to flex leave spill -over pay and shall not be subject to any flex leave accrual threshold. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to other non -safety management employees of the City such as short term and long term disability plans, life insurance plans, and deferred compensation plans. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $1,000.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Fifth Amended Agreement and the City Charter, the City Charter shall prevail. F. This Fifth Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non -safety management employees of the City. SECTION 6 Business Expenses A. Effective January 2006, BLUDAU shall receive a monthly car allowance of $450 for use of his personal car for City business. B. City shall reimburse BLUDAU for all reasonable business expenses (except automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Fifth Amended Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. 3 r R SECTION 7 Meetings and Conferences BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to the City Charter, the Newport Beach Municipal Code and this Fifth Amended Agreement. SECTION 8 Housing As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU's purchase of housing in Newport Beach, City has loaned BLUDAU the sum of $50,000 (Loan). The Loan has been, and shall be, used solely to purchase housing in Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15th of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Fifth Amended Agreement or BLUDAU's separation from City employment. In the event all or any portion of the Loan remains unpaid at the time of BLUDAU's separation, City shall have the right to withhold, from value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation, a sum equal to the amount of the then current unpaid balance. SECTION 9 Evaluation The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Fifth Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrant any modification of his base salary and /or benefits. However, any decision to modify BLUDAU's base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10 General Provisions A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements 2 _ r • ` specified in this Fifth Amended Agreement and /or relevant provisions of the City Charter of City ordinance. B. This Fifth Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. C. Any notice required by this Fifth Amended Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case of the City), or when properly addressed and deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested. D. This Fifth Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: a/,�,4 /0& Dated: a 0 APPROVED AS TO FORM: enn'. C � W^ -- Foi Robin Clauson City Attorney 5 (Z& Don Webb Mayor of Newport Beach /- Homer L. BI au City Manager of Newport Beach CITY OF NEWPORT BEACH e °c couNca CITY COUNCIL STAFF REPORT f,e;6RT s5Acm M 14 > ?, Agenda Item No. 13 7555nXIM February 14, 2006 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Council Ad Hoc Compensation Committee Mayor Don Webb Mayor Pro Tern Steve Rosansky Council Member Ed Selich SUBJECT: Proposed Modifications to City Manager Employment Agreement RECOMMENDATION: By Resolution, enter into a two year employment agreement with the City Manager, which includes a 5% salary increase the first year, effective January 7, 2006, and a 4% salary increase the second year, effective January 6, 2007. DISCUSSION: The City Council recently completed a performance evaluation on the City Manager for the 2005 calendar year and found him to have effectively carried out his job duties. The Council Committee composed of Mayor Don Webb, Mayor Pro Tern Steve Rosansky and Council Member Ed Selich has communicated with the City Manager regarding overall compensation and benefits. It is clear that the City Manager's total compensation is well below other Orange County cities used as comparisons; and therefore, we recommend an increase in compensation and benefits over a two year contract period. In April, 2005, the OC Register did an article on total compensation paid to City Managers in Orange County, using figures obtained in 2004. The Newport Beach City Manager's total compensation was found to rank 15th of the 34 Orange Council cities at $211,932 per year. The survey information is almost two years old, and our City Manager has not received a compensation adjustment since that time, placing him even further behind many of his peers in the County. We believe that Newport Beach is a city that requires a higher level of management oversight that most Orange County cities, given it is a full service city and given the issues relating to water quality, the Coastal Commission, John Wayne Airport and the City's $190M budget. 00posed Modifications to City Manor Employment Agreement February 14, 2006 Page 2 Based on these findings, the Council Committee recommends the following modifications be made in the City Manager's contract: Enter into a two year employment contract with the City Manager with only those changes included within this recommendation. 2. Establish an annual base salary of $195,977 (5% increase) effective January 7, 2006, until the first payroll period in 2007, at which time the City Manager's annual base salary would increase by 4% to $203,816. 3. Effective January, 2006 the City Manager would be provided a car allowance of $450 per month for the use of his personal car for City business. 4. The City Manager's Administrative Leave time (time provided in -lieu of overtime, but not carried over from year to year) be increased from 10 to 15 days per year. It is our belief these compensation adjustments will place our City Manager around 10th in total compensation paid to Orange County City Managers, which we believe is fair to both our City Manager and the community. We have spoken with the City Manager and he is agreeable to these contract terms. 0 0 RESOLUTION NO. 2006- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADJUSTING THE COMPENSATION PAID TO THE CITY MANAGER WHEREAS, the City Council has evaluated the performance of the City Manager during the preceding (12) months; WHEREAS, an adjustment to the base salary and term modifications to the current employment agreement are appropriate given the performance of the City Manager and the compensation paid to other City Managers within Orange County; and WHEREAS, the proposed modifications to compensation and benefits are reflected in the Fifth Amended Employment Agreement that is attached to this Resolution as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that the salary and benefits of the City Manager shall be as specified in Exhibit A and that the Mayor is authorized to execute Exhibit A on behalf of the City Council. ADOPTED this 14`h day of February 2006. Don Webb Mayor ATTEST: Lavonne Harkless City Clerk • EXHIBIT A FIFTH AMENDED EMPLOYMENT AGREEMENT This Fifth Amended Employment Agreement (Fifth Amended Agreement), which is effective as of the 7th of January, 2006, between the City of Newport Beach ("City") and Homer Bludau ("BLUDAU') is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of City of Newport Beach (Original Agreement); B. The Original Agreement was amended first on February 28, 2000 (First Amended Agreement) and both the Original Agreement and the following three Amended Agreements required periodic evaluation of BLUDAU's performance as City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU's performance over the past twelve months and has determined that his performance warrants an increase in salary and modification of other benefits as specified in this Fifth Amended Agreement. Now, therefore, the Parties agree as follows: SECTION 1 Employment as City Manager City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cites generally and are performed by management employees of other municipalities. SECTION 2 Effective Date/Term This Fifth Amended Agreement shall take effect January 7, 2006 and remain in effect until January 7, 2008 or until amended by the Parties or terminated pursuant to Section 4. 0 0 SECTION 3 Base Compensation City shall pay BLUDAU an annual base salary of $195,977.00, effective January 7, 2006, in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. Effective January 6, 2007, BLUDAU's annual base salary will increase to $203,806 and remain in effect until this agreement is changed by City Council action. This Fifth Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold from BLUDAU's base salary any and all sum 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. City shall also deduct sums BLUDAU is obligated to pay because of BLUDAU's participation in plans or programs generally described in Section 5 of this Fifth Amended Agreement. SECTION 4 Termination and Severance Pay A. BLUDAU may terminate this Fifth Amended Agreement by giving the City at least forty-five (45) days prior written notice of termination. B. City may terminate this Fifth Amended Agreement, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular or special meeting of the City Council. However, consistent with provisions of the City Charter, this Fifth Amended Agreement may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Fifth Amended Agreement, and any reasons for termination, if deemed appropriate by the City Council, at least forty-five (45) days prior to the effective date of termination. C. In the event this Fifth Amended Agreement is terminated by the City, BLUDAU shall, as of the effective date of termination, receive severance pay equal to one -half (1/2) of his then current annual base salary. However, BLUDAU shall not be entitled to any severance pay if this Fifth Amended Agreement is terminated because of BLUDAU's criminal conduct, malfeasance in office, or gross abuse of discretion. SECTION 5 Employee Benefits A. BLUDAU shall accumulate flex leave at the rate of twenty-six (26) days per year, commending on the effective date of this Fifth Amended 2 0 0 Agreement. BLUDAU shall also be entitled to 120 hours of administrative leave per year. BLUDAU shall not be entitled to any compensation, or compensatory time off, for overtime. BLUDAU shall not be entitled to flex leave spill -over pay and shall not be subject to any flex leave accrual threshold. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to other non -safety management employees of the City such as short term and long term disability plans, life insurance plans, and deferred compensation plans. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $1,000.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Fifth Amended Agreement and the City Charter, the City Charter shall prevail. F. This Fifth Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non -safety management employees of the City. SECTION 6 Business Expenses A. Effective January 2006, BLUDAU shall receive a monthly car allowance of $450 for use of his personal car for City business. B. City shall reimburse BLUDAU for all reasonable business expenses (except automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Fifth Amended Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. 3 SECTION 7 Meetings and Conferences BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to the City Charter, the Newport Beach Municipal Code and this Fifth Amended Agreement. SECTION 8 Housing As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU's purchase of housing in Newport Beach, City has loaned BLUDAU the sum of $50,000 (Loan). The Loan has been, and shall be, used solely to purchase housing in Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15"' of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Fifth Amended Agreement or BLUDAU's separation from City employment. In the event all or any portion of the Loan remains unpaid at the time of BLUDAU's separation, City shall have the right to withhold, from value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation, a sum equal to the amount of the then current unpaid balance. SECTION 9 Evaluation The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Fifth Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrant any modification of his base salary and /or benefits. However, any decision to modify BLUDAU's base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10 General Provisions A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated 'gat will" and without specification of cause, subject only to the procedural requirements 0 • • specified in this Fifth Amended Agreement and /or relevant provisions of the City Charter of City ordinance. B. This Fifth Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. C. Any notice required by this Fifth Amended Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case of the City), or when properly addressed and deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested. D. This Fifth Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: Dated: APPROVED AS TO FORM: Robin Clauson City Attorney 5 Don Webb Mayor of Newport Beach Homer L. Bludau City Manager of Newport Beach - - - 0 i C '3)0- TO: CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 23 February 24, 2004 HONORABLE MAYOR AND MEMBERS OF THE CITY FROM: Council Ad Hoc Compensation Committee Tod Ridgeway, Chair John Heffernan Don Webb FEB 2 4 2004 SUBJECT: Proposed Modifications to City Manager Employment Agreement RECOMMENDATION: By Resolution, enter into a two year employment agreement with the City Manager which includes a one time 4% salary increase for the period from January 3, 2004 through January 3, 2006. DISCUSSION: The City Council recently completed an evaluation of the job performance of the City Manager during the past year. The City Council concluded that the City Manager deserves additional compensation because he has performed his duties in an exemplary manner and his current compensation is below that of his peers and certain other City of Newport Beach employees. The total compensation current paid to the City Manager ranks 15th out of 23 Orange County cities surveyed by the Committee. In light of the evaluation of the City Manager and his compensation compared to his peers, the City Council Ad Hoc Compensation Committee has asked me to recommend the following modifications the City Manager's employment contract: 1. Enter into a 2 -year employment contract with the City Manager that changes only the items included in this report. 2. Establish an annual base salary of $186,645 effective January 3, 2004, which provides for a one -time 4% salary increase over current salary. This salary amount would remain constant over the 2 -year period (until January 3, 2006) of the employment agreement, unless otherwise changed by the City Council. 0 r roposed Modifications to City Manager Employment Agreement February 24, 2004 Page 2 3. Provide the City Manager with the same health insurance benefits that are negotiated with the Key & Management employees during the term of this employment agreement. This agreement does not change the compensation that would be due the City Manager if he was terminated from his position by the City Council during the agreement's term. If approved, it would place him 13`h out of the 23 Orange County cities surveyed in terms of total compensation provided city managers. The City Manager is agreeable to these terms. RESOLUTION NO. 2004- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADJUSTING THE COMPENSATION PAID TO THE CITY MANAGER WHEREAS, the City Council has evaluated the performance of the City Manager during the preceding (12) months; WHEREAS, an adjustment to the base salary and term modifications to the current employment agreement are appropriate given the performance of the City Manager and the compensation paid to other City Managers within Orange County; and WHEREAS, the proposed modifications to compensation and benefits are reflected in the Fourth Amended Employment Agreement that is attached to this Resolution as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that the salary and benefits of the City Manager shall be as specified in Exhibit A and that the Mayor is authorized to execute Exhibit A on behalf of the City Council. ADOPTED this 24th day of February 2004. Tod W. Ridgeway Mayor ATTEST: Lavonne Harkless City Clerk EXHIBIT A FOURTH AMENDED EMPLOYMENT AGREEMENT This Fourth Amended Employment Agreement (Fourth Amended Agreement), which is effective as of the 3rd of January, 2004, between the City of Newport Beach ("City') and Homer Bludau ("BLUDAU"} is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of City of Newport Beach (Original Agreement); B. The Original Agreement was amended first on February 28, 2000 (First Amended Agreement) and both the Original Agreement and the following three Amended Agreements required periodic evaluation of BLUDAU's performance as City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU's performance over the past twelve months and has determined that his performance warrants an increase in salary and modification of other benefits as specified in this Fourth Amended Agreement. Now, Therefore, the Parties agree as follows: SECTION 1 Employment as City Manager City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cites generally and are performed by management employees of other municipalities. SECTION 2 Effective Date/Term This Fourth Amended Agreement shall take effect January 3, 2004 and remain in effect until January 3, 2006 or until amended by the Parties or terminated pursuant to Section 4. SECTION 3 Base Compensation City shall pay BLUDAU an annual base salary of $186,645.00, effective January 3, 2004, in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. This Fourth Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold from BLUDAU's base salary any and all sum 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. City shall also deduct sums BLUDAU is obligated to pay because of BLUDAU's participation in plans or programs generally described in Section 5 of this Fourth Amended Agreement. SECTION 4 Termination and Severance Pay A. BLUDAU may terminate this Fourth Amended Agreement by giving the City at least forty-five (45) days prior written notice of termination. B. City may terminate this Fourth Amended Agreement, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular or special meeting of the City Council. However, consistent with provisions of the City Charter, this Fourth Amended Agreement may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Fourth Amended Agreement, and any reasons for termination, if deemed appropriate by the City Council, at least forty- five (45) days prior to the effective date of termination. C. In the event this Fourth Amended Agreement is terminated by the City, BLUDAU shall, as of the effective date of termination, receive severance pay equal to one -half (1/2) of his then current annual base salary. However, BLUDAU shall not be entitled to any severance pay if this Fourth Amended Agreement is terminated because of BLUDAU's criminal conduct, malfeasance in office, or gross abuse of discretion. SECTION 5 Employee Benefits A. BLUDAU shall accumulate flex leave at the rate of twenty-six (26) days per year, commending on the effective date of this Fourth Amended Agreement. BLUDAU shall also be entitled to eighty hours of administrative leave per year. BLUDAU shall not be entitled to any 7 0 compensation, or compensatory time off, for overtime. BLUDAU shall not be entitled to flex leave spill -over pay and shall not be subject to any flex leave accrual threshold. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to other non -safety management employees of the City such as short term and long term disability plans, life insurance plans, and deferred compensation plans. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $1,000.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Fourth Amended Agreement and the City Charter, the City Charter shall prevail. F.. This Fourth Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non -safety management employees of the City. SECTION 6 Business Expenses City shall reimburse BLUDAU for all reasonable business expenses (except automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Fourth Amended Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7 Meetings and Conferences BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to the City Charter, the Newport Beach Municipal Code and this Fourth Amended Agreement. SECTION 8 Housing 0 As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU's purchase of housing in Newport Beach, City has loaned BLUDAU the sum of $50,000 (Loan). The Loan has been, and shall be, used solely to purchase housing in Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) In which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15th of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Fourth Amended Agreement or BLUDAU's separation from City employment. In the event all or any portion of the Loan remains unpaid at the time of BLUDAU's separation, City shall have the right to withhold, from value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation, a sum equal to the amount of the then current unpaid balance. SECTION 9 Evaluation The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Fourth Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrant any modification of his base salary and /or benefits. However, any decision to modify BLUDAU's base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10 General Provisions A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specified in this Fourth Amended Agreement and /or relevant provisions of the City Charter of City ordinance. B. This Fourth Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. M C. Any notice required by this Fourth Amended Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case of the City), or when properly addressed and deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested. D. This Fourth Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: Dated: APPROVED AS TO FORM: Robert H. Burnham City Attorney Wi Tod W. Ridgeway } Mayor of Newport Beach Homer L. Bludau City Manager of Newport Beach CITY OF ORT BEACH MINUTE EXIRRPT CITY COUNCIL MEETING OF NOVEMBER 26, 2002 ROLL CALL Present: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Absent: None CURRENT CALENDAR 22. ADJUSTMENTS TO THE COMPENSATION OF THE CITY CLERK, CITY ATTORNEY AND CITY MANAGER. Action: Based on successful performance evaluations, increased the salaries of the City Clerk, City Attorney and City Manager by 2% for cost of living plus an additional 3% for merit. The motion carried by the following roll call vote: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Proctor, Mayor Ridgeway Noes: None Abstain: None Absent: None CERTIFIED AS A TRUE AND CORRECT COPY City Clerk of the City of Newport Beach DATE: i1 /3 7 (0� �r Nov 2. g 2002 • C - 3a It; CITY OF NEWPORT BEACH (3$) CITY COUNCIL STAFF REPORT Agenda Item No. 22 November 26, 2002 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Homer L. Bludau, City Manager 644 -3000, hbludau @city.newport- beach.ca.us SUBJECT: Adjustments to the Compensation of the City Clerk, City Attorney, and City Manager RECOMMENDATION: Based on successful performance evaluations, adopt the three resolutions making changes to the total compensation packages. DISCUSSION: The City Clerk, City Attorney, and City Manager are the three City employees who work directly for the City Council. Each of their employment agreements require them to be evaluated for job performance by the City Council each year. Their evaluations will take place during Council's Closed Session. Based on their evaluations, adjustments to total compensation packages are likely to change, but that is unknown at this time. Should there be adjustments to the total compensation packages, those will be reflected in new attachments to the resolutions provided. Submitted by: 4 Homer L. .'I 0 0 RESOLUTION NO. 2002- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, ADJUSTING THE COMPENSATION OF THE CITY CLERK WHEREAS, pursuant to the City Clerk's Employment Agreement which establishes performance evaluations at least on an annual basis, the City Council conducted an annual evaluation on November 12, 2002; and WHEREAS, an adjustment to the base salary are appropriate in light of the performance of the City Clerk and the compensation paid to other city clerks in Orange County. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Newport Beach authorizes an amendment to the employment agreement between the City and the City Clerk to increase the City Clerk's base salary to $ effective DATED this 26th day of November 2002. MAYOR ATTEST: CITY CLERK F RESOLUTION NO. 2002- E A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADJUSTING THE COMPENSATION PAID TO THE CITY ATTORNEY WHEREAS, the City Council evaluates the performance of the City Attorney each year; and WHEREAS, an adjustment to the base salary and minor modifications to other provisions of the current employment agreement are appropriate in light of the performance of the City Attorney and the compensation paid to other in house city attorneys in Orange County WHEREAS, the proposed modifications to compensation and benefits are reflected in the Employment Agreement that is attached to this Resolution as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the City of Council of the City of Newport Beach that the salary and benefits of the City Attorney shall be as specified in Exhibit A and that the Mayor is authorized to execute Exhibit A on behalf of the City Council. ADOPTED, this 26th day of November 2002. Tod Ridgeway Mayor of the City of Newport Beach ATTEST: LaVonne Harkless, City Clerk • • RESOLUTION NO. 2002- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADJUSTING THE COMPENSATION PAID TO THE CITY MANAGER WHEREAS, the City Council has evaluated the performance of the City Manager during the preceding (12) months; WHEREAS, an adjustment to the base salary (Third Amended Agreement) is appropriate given the excellent performance of the City Manager and the compensation paid to other City Manager's within Orange County; and WHEREAS, the proposed modifications to compensation are reflected in the Third Amended Agreement that is attached to this resolution as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the City of Council of the City of Newport Beach that the salary and benefits of the City Manager shall be as specified in Exhibit A and the Mayor is authorized to execute Exhibit A on behalf of the City Council. ADOPTED, this 26th day of November 2002. Tod Ridgeway Mayor of the City of Newport Beach ATTEST: LaVonne Harkless, City Clerk 0 0 SECOND AMENDED EMPLOYMENT AGREEMENT This Second Amended Employment Agreement (Second Amended Agreement), which is effective as of the 261' day of March 2002, between the City of Newport Beach ( "City") and Homer Bludau ( "BLUDAU ") is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of the City of Newport Beach (Original Agreement); B. The Original Agreement was amended on February 28, 2000 (First Amended Agreement) and both the Original Agreement and the First Amended Agreement required periodic evaluation of BLUDAU'S performance as City Manager to determine if his `base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU'S performance over the past twelve months and has determined that his performance warrants an increase in salary and modification of other benefits as specified in this Second Amended Agreement. Now, Therefore, the Parties agree as follows: SECTION 1. Emplovment as Citv Manager. City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties assigned by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cities generally and are performed by management employees of other municipalities. SECTION 2. Effective Date/Term This Second Amended Agreement shall remain in effect until amended by the Parties or terminated pursuant to Section 4. SECTION 3. Base Compensation. City shall pay BLUDAU an annual base salary of $170,000.00, effective December 1, 2001, in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. This Second Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold 0 0 from BLUDAU's base salary 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. City shall also deduct sums BLUDAU is obligated to pay because of BLUDAU'S participation in plans or programs generally described in Section 5 of this Second Amended Agreement. SECTION 4. Termination and Severance Pa v. A. BLUDAU may terminate this Second Amended Agreement by giving the City at least forty -five (45) days prior written notice of termination. B. City may terminate this Second Amended Agreement, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular or special meeting of the City Council. However, consistent with provisions of the City Charter, this Second Amended Agreement may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Second Amended Agreement, and any reasons for termination, if deemed appropriate by the City Council, at least forty -five (45) days prior to the effective date of termination. C. In the event this Second Amended Agreement is terminated by the City, BLUDAU shall, as of the effective date of termination, receive severance pay equal to one -half (1/2) of his then current annual base salary. However, BLUDAU shall not be entitled to any severance pay if this Second Amended Agreement is terminated because of BLUDAU'S criminal conduct, malfeasance in office, or gross abuse of discretion. SECTION 6. Employee Benefits. A. BLUDAU shall accumulate flex leave at the rate of twenty-six (26) days per year, commencing on the effective date of this Second Amended Agreement. BLUDAU shall also be entitled to eighty hours of administrative leave per year. BLUDAU shall not be entitled to any compensation, or- compensatory time off, for overtime. BLUDAU shall not be entitled to flex leave spill -over pay and shall not be subject to any flex leave accrual threshold. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to mgnemp.agt 2 0 0 other non - safety management employees of the City such as short term and long -term disability plans, life insurance plans, and deferred compensation plans. In addition, BLUDAU shall be entitled to continued participation in the International City Management Association 457 Deferred Compensation Plan (ICMA Plan). BLUDAU'S participation in the ICMA Plan shall be at BLUDAU'S discretion, at no cost to the City, and any BLUDAU contributions to the ICMA Plan will be at his sole cost without any City contribution. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $1000.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Second Amended Agreement and the City Charter, the City Charter shall prevail. F. This Second Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non -safety management employees of the City. SECTION 6. Business Expenses. City shall reimburse BLUDAU for all reasonable business expenses (except automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Second Amended Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7. Meetings and Conferences. BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to the City Charter, the Newport Beach Municipal Code and this Second Amended Agreement. SECTION 8. Housing. As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU'S purchase of housing in Newport Beach, City has loaned BLUDAU the sum of $50,000 (Loan). The Loan has been, and shall be, used solely to purchase housing in mgnemp.agt 3 0 0 Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15th of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre- payment penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Second Amended Agreement or BLUDAU'S separation from City employment In the event all or any portion of the loan remains unpaid at the time of BLUDAU'S separation, City shall have the right to withhold, from value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation, a sum equal to the amount of the then current unpaid balance. . SECTION 9. Evaluation. The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Second Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrant any modification of his base salary and /or benefits. However, any decision to modify BLUDAU'S base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10. General Provisions. A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specified in this Second Amended Agreement and /or relevant provisions of the City Charter or City ordinance. B. This Second Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. C. Any notice required by this Second Amended Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case of the City), or when properly addressed and deposited. in the United States mail, registered or certified, with postage prepaid and return receipt requested. mgre p.agt n 0 0 D. This Second Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: _:? —,W' aZ Dated: 4gA 24x2 16' 01 1 Homer Bludfiu APPROVED AS TO FORM: CITY ATTORNEY F:\ cat\ shared \Ag \CityManager1032602finalk.doc mgremp.agt • . March 26, 2002 Agenda Item No. 4 1 J CITY OF NEWPORT BEACH Office of the City Council TO: Mayor. & Members of the City Council SEW PC) FROM: Dennis D. O'Neil, Chair Council Ad Hoc Compensation Committee RE: City Manager Employment Agreement Proposed Modification to Compensation 4c'FOaN DATE: March 26. 2002 The City Council recently completed an evaluation of the performance of the City Manager during the past year. The City Council concluded that the City Manager deserves additional compensation because he has accomplished substantially all of the goals established at the prior evaluation, has performed his duties in an exemplary manner and his current compensation is below that of his peers and other City employees. The City Manager has played a significant role in the annexation of Newport Coast, obtaining unanimous Board support for an extension of the JWA Settlement Agreement, adopting a new Personnel Manual and completing a "class and comp" study for key and management employees. The total compensation currently paid to the City Manager ranks 16th out of the 17 Orange County cities surveyed by the Committee. The City Manager is currently paid less than the Chief of Police and the City Attorney. In light of the evaluation of the City Manager and his compensation compared to his peers, the City Council Ad Hoc Compensation Committee has asked. me to recommend the following modifications to the City Manager's employment contract: 1. Establish an annual base salary of $170,000.00 effective December 1, 2001; 2. Eliminate the existing car allowance; 3. Increase, from $500.00 to $1000.00, the maximum amount of reimbursement for the cost of an annual physical examination. The City Attorney has suggested minor modifications to the contract and these modifications and the adjustments to compensation described above are shown in the redlined version of the "Second Amended Agreement that is Exhibit A to the resolution that accompanies this Memo. anoR�N °Ewaoa WAW Dennis D. O'Neil MAR i ii 1002 Chair, Ad Hoc Council Compensation Committee � AnoPTED r'Lesa.� LION 1.b2 w� RESOLUTION NO. 2002- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADJUSTING THE COMPENSATION PAID TO THE CITY MANAGER WHEREAS, the City Council has evaluated the performance of the City Manager during the preceding (12) months; WHEREAS, an adjustment to the base salary and minor modifications to other provisions of the current employment agreement are appropriate given the excellent performance of the City Manager and the compensation paid to other management employees; and WHEREAS, the proposed modifications to compensation and benefits are reflected in the Second Amended Employment Agreement that is attached to this Resolution as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the City of Council of the City of Newport Beach that the salary and benefits of the City Manager shall be as specified in Exhibit A and that the Mayor is authorized to execute Exhibit A on behalf of the City Council. ADOPTED, this 26th day of March 2002. ATTEST: LaVonne Harkless, City Clerk Tod Ridgeway Mayor of the City of Newport Beach -1- 0 0 SECOND AMENDED EMPLOYMENT AGREEMENT This Second Amended Employment Agreement (§j econd Amended Agreement), which is effective as of the 26' 2r -day of MarchFe�, 20028, between the City of Newport Beach ( "City ") and Homer Bludau ("BLUDAU ") is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of the City of Newport Beach (Original Agreement); B. The Original Agreement was amended on February 28, 2000 (First Amended Agreement) and both the Original Agreement and the First Amended Agreement required periodic evaluation of BLUDAU'S performance as City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU'S performance over the past twelve months frorn his date of hire and has determined that his performance warrants an increase in salary and modification of other benefits as specified in this Second Amended Agreement. Now, Therefore, the Parties agree as follows: SECTION 1. Emplovment as Citv Manager. City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties assigned by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cities generally and are performed by management employees of other municipalities. SECTION 2. Effective Date/Term. This Second Amended Agreement shall remain in effect until amended by the Parties or aalessand- aptil- terminated pursuant to Section 4. SECTION 3. Base Compensation. City shall pay BLUDAU an annual base salary of $17045,0600.00, effective December 1, 2001, in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. The aRRUal base salary of 13LUDAI-1 rhall be established by the Gity . This Second Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in EABIBIT 0 1i which management employees are paid. City shall have the right to deduct or withhold from BLUDAU's base salary 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. City shall also deduct sums BLUDAU is obligated to pay because of BLUDAU'S participation in plans or programs generally described in Section 5 of this Second Amended Agreement. SECTION 4. Termination and Severance Pay. A. BLUDAU may terminate this Second Amended Agreement by giving the City at least forty -five (45) days prior written notice of termination. B. City may terminate this Second Amended AgreementBLUBAU, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular or special meeting of the City Council. However, consistent with provisions of the City Charter, this Second Amended Agreement la IDAI I may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Second Amended Agreement, and any reasons for termination, if deemed appropriate by the City Council, at least forty -five (45) days prior to the effective date of termination. C. In the event this Second Amended Agreement is terminated by the City, BLUDAU shall, as of the effective date of termination, receive severance pay equal to one -half (1/2) of his then current annual base salary- as -ef4he However, BLUDAU shall not be entitled to any severance pay if this Second Amended Agreement BL61BAU is terminated because of BLUDAU'S criminal conduct, malfeasance in office, or a -gross abuse of discretion. SECTION 5. Employee Benefits. A. BLUDAU shall accumulate flexpaid leave at the rate of twenty-six (26) days per year, commencing on the effective date of this Second Amended Agreement. BLUDAU shall also be entitled to eighty hours of administrative leave per year. BLUDAU shall not be entitled to any compensation, or compensatory time off, for overtime. BLUDAU shall not be entitled to flex leave spill -over pay and shall not be subject to any flex leave accrual threshold. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. mgcemp.agt ! 0 C. BLUDAU shall be entitled to participate in plans and programs available to other non - safety management employees of the City such as short term and long -term disability plans, life insurance plans, and deferred compensation plans. In addition, BLUDAU shall be entitled to continued participation in the International City Management Associations 457 Deferred Compensation Plan (ICMA Plan). BLUDAU'S participation in the ICMA Plan shall be at BLUDAU'S discretion, at no cost to the City, and any BLUDAU contributions to the ICMA Plan will be at his sole cost without any City contribution. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $10500.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Second Amended Agreement and the City Charter, the City Charter shall prevail. FG. This Second Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non - safety management employees of the City. SECTION 6. Business Expenses. City shall reimburse BLUDAU for all reasonable business expenses (except automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Second Amended Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7. Meetings and Conferences. BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to the City Charter, the Newport Beach Municipal Code and this Second Amended Agreement. SECTION 8. Housino mgremp.agt 0 0 As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU'S purchase of housing in Newport Beach, City has w4t— loaned BLUDAU the sum of $50,000 (Loan). The Loan has been, and shall be,, used solely to purchase housing in Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15th of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Second Amended Agreement or BLUDAU'S separation from City employment In the event all or any portion of the loan remains unpaid at the time of BLUDAU'S separation, City shall have the right to withhold from value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation, a sum equal to the amount of the fed, ice -t#e then current unpaid balance_ by thes value 9f aRy aGGumulated paid SECTION 9. Evaluation. The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Second Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrant any modification of his base salary and /or benefits. However, any decision to modify BLUDAU'S base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10. General Provisions. A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specified in this Second Amended Agreement and /or relevant provisions of the City Charter or City ordinance. B. This Second Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. C. Any notice required by this Second Amended Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case mgzemp.agt 0 of the City), or when properly addressed and deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested. D. This Second Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: Tod RidgewayJehn -Noyes Mayor of Newport Beach Dated: Homer Bludau APPROVED AS TO FORM: Robert H. Burnham, CITY ATTORNEY F:icatl sharedl Ag \CityManager1031997-029final.doc mgremp.agt 9 a 31a (" boa • lfr. Jim Hildreth 120 The Grand Canal Newport Beach, CA 92662 26 March 2002 Re: City Council Agenda Item #4 Newport Beach City Council 3300 Newport Blvd. Newport Beach, CA 92663 Dear City Council Members: In the "First Amended Agreement" for the City Manager, Mr. Bludau, his salary increased three percent (3%). When this was being considered, I said he was an asset to the community. Now he is being considered for a "Second Amended Agreement" with which you will increase his annual base salary seventeen percent (17 %), from $145,600.00 to $170,000.00. Allow me to note four (4) of the accomplishments I feel Mr. Bludau has per- formed during his brief tenure as a public official and how much of an asset he has become to others of the City through these accomplishments. First, he has taken the Harbor Environmental Division, formerly part of the Fire and Marine Department, under his wing, which has been a relief to the Fire Chief, Mr. Timothy Riley. (As you know that Division is now called the Harbor Resources Division under the City Managers Office.) Second, he has coddled Mr. Tony Melum and Mr. Wes Armand. In my opinion, his instruction to them on how they can legally withhold requested documents seems to have helped them to maintain their employment. Third, he has accepted the questionable and undocumented statements made by Mr. Melum and Mr. Armand as being totally and completely true. Fourth, on 2 February 2001, Mr. Bludau stated that insurance coverage for my use of the City - installed ladder did not exist within the City's insurance policy. This clearly indicates how much he cares about the City's financial interests. I have noted that Mr. Bludau has yet to ridicule or scorn me in public - as has the members of the City Council. However, I should like to endorse the proposed increase of $500.00 (totally $1,000.00) towards his annual physical exam. After all, Mr. Kevin Murphy, former City Manager, resigned because he developed a healthy conscience and a good heart, so I have been told. Ver�v tr yours, Jim Hildreth i Wiz. • • CITY OF NEWPORT BEACH March 16, 2002 Mr. Jim Hildreth 120 The Grand Canal Newport Beach, CA 92662 Mr. Hildreth: This letter represents the City's response to your Ietter to Mr. Tony Melum of February 26, 2002. It remains the City's position that we have provided you with all records you have requested which are available to us. Sincerely, � DAVID A. KIFF Assistant City Manager cc: Mayor and City Council Homer Bludau, City Manager Tonv Melum, Director of Harbor RecnnrrPa CITY MANAGM CITY HALL 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California 92658 -8915 SERVICE REQUESTED e . � U.S.G85lAGE VAR 0 LAN RCC \ii � z9 MEffP nW \ CA 6747618 Mr. Jim Hildreth 120 The Grand Canal Newport Beach, CA 92662 0 0 RESOLUTION NO. 2002-25 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADJUSTING THE COMPENSATION PAID TO THE CITY MANAGER WHEREAS, the City Council has evaluated the performance of the City Manager during the preceding (12) months; WHEREAS, an adjustment to the base salary and minor modifications to other provisions of the current employment agreement are appropriate given the excellent performance of the City Manager and the compensation paid to other management employees; and WHEREAS, the proposed modifications to compensation and benefits are reflected in the Second Amended Employment Agreement that is attached to this Resolution as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the City of Council of the City of Newport Beach that the salary and benefits of the City Manager shall be as specified in Exhibit A and that the Mayor is authorized to execute Exhibit A on behalf of the City Council. ADOPTED this 26th day of March 2002. ATTEST: LaVonne Harkless City Clerk Tod W. Ridgewa7 Mayor 0 E SECOND AMENDED EMPLOYMENT AGREEMENT This Second Amended Employment Agreement (Second Amended Agreement), which is effective as of the 26" day of March 2002, between the City of Newport Beach ( "City ") and Homer Bludau ( "BLUDAU ") is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of the City of Newport Beach (Original Agreement); B. The Original Agreement was amended on February 28, 2000 (First Amended Agreement) and both the Original Agreement and the First Amended Agreement required periodic evaluation of BLUDAU'S performance as City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU'S performance over the past twelve months and has determined that his performance warrants an increase in salary and modification of other benefits as specified in this Second Amended Agreement. Now, Therefore, the Parties agree as follows: SECTION 1. Employment as City Manager. City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to, perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties assigned by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cities generally and are performed by management employees of other municipalities. SECTION 2. Effective Date/Term. This Second Amended Agreement shall remain in effect until amended by the Parties or terminated pursuant to Section 4. SECTION 3. Base Compensation. City shall pay BLUDAU an annual base salary of $170,000.00, effective December 1, 2001, in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. This Second Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold 0 0 from BLUDAU's base salary 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. City shall also deduct sums BLUDAU is obligated to pay because of BLUDAU'S participation in plans or programs generally described in Section 5 of this Second Amended Agreement. SECTION 4. Termination and Severance Pay. A. BLUDAU may terminate this Second Amended Agreement by giving the City at least forty -five (45) days prior written notice of termination. B. City may terminate this Second Amended Agreement, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular or special meeting of the City Council. However, consistent with provisions of the City Charter, this Second Amended Agreement may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Second Amended Agreement, and any reasons for termination, if deemed appropriate by the City Council, at least forty -five (45) days prior to the effective date of termination. C. In the event this Second Amended Agreement is terminated by the City, BLUDAU shall, as of the effective date of termination, receive severance pay equal to one -half (112) of his then current annual base salary. However, BLUDAU shall not be entitled to any severance pay if this Second Amended Agreement is terminated because of BLUDAU'S criminal conduct, malfeasance in office, or gross abuse of discretion. SECTION 5. Employee Benefits. A. BLUDAU shall accumulate flex leave at the rate of twenty-six (26) days per year, commencing on the effective date of this Second Amended Agreement. BLUDAU shall also be entitled to eighty hours of administrative leave per year. BLUDAU shall not be entitled to any compensation, or compensatory time off, for overtime. BLUDAU shall not be entitled to flex leave spill -over pay and shall not be subject to any flex leave accrual threshold. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non- safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to mqremp.agt 2 0 0 other non - safety management employees of the City such as short term and long -term disability plans, life insurance plans, and deferred compensation plans. In addition, BLUDAU shall be entitled to continued participation in the International City Management Association 457 Deferred Compensation Plan (ICMA Plan). BLUDAU'S participation in the ICMA Plan shall be at BLUDAU'S discretion, at no cost to the City, and any BLUDAU contributions to the ICMA Plan will be at his sole cost without any City contribution. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $1000.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Second Amended Agreement and the City Charter, the City Charter shall prevail. F. This Second Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non -safety management employees of the City. SECTION 6. Business Exaenses. City shall reimburse BLUDAU for all reasonable business expenses (except automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Second Amended Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7. Meetings and Conferences. BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to the City Charter, the Newport Beach Municipal Code and this Second Amended Agreement. SECTION 8. Housing. As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU'S purchase of housing in Newport Beach, City has loaned BLUDAU the sum of $50,000 (Loan). The Loan has been, and shall be, used solely to purchase housing in mgxemp.agt 0 41 Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15th of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Second Amended Agreement or BLUDAU'S separation from City employment In the event all or any portion of the loan remains unpaid at the time of BLUDAU'S separation, City shall have the right to withhold, from value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation, a sum equal to the amount of the then current unpaid balance. . SECTION 9. Evaluation. The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Second Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrant any modification of his base salary and/or benefits. However, any decision to modify BLUDAU'S base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10. General Provisions. A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specified in this Second Amended Agreement and /or relevant provisions of the City Charter or City ordinance. B. This Second Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. C. Any notice required by this Second Amended Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case of the City), or when properly addressed and deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested. mgcemP.aq[ 0 0 D. This Second Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: Dated: APPROVED AS TO FORM: Robert H. Burnham, CITY ATTORNEY F:lca haredLAg \CityManager\032602finalk.doc mgramp.agt 5 Tod Ridgeway Mayor of Newport Beach Homer Bludau STATE OF CALIFORNIA } COUNTY OF ORANGE CITY OF NEWPORT BEACH } I, LaVonne M. Harkless, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2002 -25 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 26th day of March, 2002, and that the same was so passed and adopted by the following vote, to wit: Ayes: Heffernan, O'Neil, Bromberg, Glover, Adams, Mayor Ridgeway Noes: None Absent:. Proctor Abstain: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 27th day of March, 2002. (Seal) City Clerk Newport Beach, California CITY OF NEWPORT BEACH CITY , ^,F.,..__. J4 L tCl2: Ay*kA Prlki "Uv I00 AGENDA ITEM NO. 5 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Mayor John Noyes DATE: December 12, 2000 SUBJECT: MODIFICATION TO CITY MANAGER'S CONTRACT The City Manager was recently evaluated and the City Council was generally pleased with his performance during the past twelve months. In the next year, the City Manager will be called upon to provide assistance on complex matters such as the proposed extension of the JWA Settlement Agreement and the proposed annexation of the Newport Coast, in addition to providing customer service leadership to staff. The City Council has recently granted pay increases to the City Attorney and City Clerk. I am proposing that the City Manager's contract be modified to reflect a three percent (3 %) increase in the current base salary for the position. I am recommending the City Council approve this amendment by adopting the Resolution that accompanies this memo. AntliwK Jo n oyes, INjayor City Hall • 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92659 -1768 RESOLUTION NO. 2000- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADJUSTING THE COMPENSATION PAID TO THE CITY MANAGER WHEREAS, the City Council has evaluated the performance of the City Manager during the past calendar year; and WHEREAS, an adjustment to the base salary is appropriate given the compensation paid to other department directors and the manner in which the City Manager has performed the duties of that position; and WHEREAS, the adjustments in compensation for the City Manager that are authorized by this Resolution are appropriate under the circumstances. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that the Mayor is authorized to execute amendments to the employment contract (Agreement) between the City and the City Manager consistent with the following: The current base salary of the City Manager shall be Increased three percent (3 %) effective the second pay period in December, 2000. ADOPTED, this 12th day of December, 2000. Mayor, City of Newport Beach ATTEST: City Clerk 0 RESOLUTION NO. 2000- 100 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADJUSTING THE COMPENSATION PAID TO THE CITY MANAGER WHEREAS, the City Council has evaluated the performance of the City Manager during the past calendar year; and WHEREAS, an adjustment to the base salary is appropriate given the compensation paid to other department directors and the manner in which the City Manager has performed the duties of that position; and WHEREAS, the adjustments in compensation for the City Manager that are authorized by this Resolution are appropriate under the circumstances. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that the Mayor is authorized to execute amendments to the employment contract (Agreement) between the City and the City Manager consistent with the following: The current base salary of the City Manager shall be increased three percent (3 %) effective the second pay period in December, 2000. ADOPTED, this 1e day of December, 2000. ATTEST: �f , 4ad City Clerk Mayor, City of Ne STATE OF CALIFORNIA } COUNTY OF ORANGE CITY OF NEWPORT BEACH } I, LAVONNE M. HARKI FSS, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2000.100 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 12th day of December, 2000, and that the same was so passed and adopted by the following vote, to wit: Ayes: Heffernan, O'Neil, Ridgeway, Glover, Bromberg, Proctor, Mayor Adams Noes: None Absent: None Abstain: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 130' day of December, 2000. (Seal) ✓}AOL X7L, , y1) - /✓ {i,"/dJ � City Clerk Newport Beach, California 0 0 LOAN AGREEMENT This Loan Agreement (Agreement) between the City of Newport Beach ("City ") and Homer Bludau ( "BLUDAU "), effective as of March 31, 2000, is made in light of the following: RECITALS A. City and BLUDAU entered into an Amended Employment Agreement (Amended Agreement) on February 28, 2000 pursuant to which the City modified the terms and conditions of BLUDAU's employment as the City Manager of the City of Newport Beach; B. The Amended Agreement contemplates, among other things, a loan from the City to BLUDAU to be used exclusively for the purpose of purchasing housing in Newport Beach. C. The purpose of this Agreement is to implement the loan contemplated in the Amended Agreement. Now, Therefore, the Parties agree as follows: SECTION 1. Loan to City Manager. City shall ban BLUDAU the sum of $50,000 (Loan) under the terms and conditions specified in this Agreement. BLUDAU shall use the loan solely for the purpose of purchasing housing in Newport Beach. SECTION 2. Interest. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion of any fiscal year) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15th of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. SECTION 3. Prepayment BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment penalty. • • SECTION 4. Payment of Loan BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Amended Agreement or BLUDAU'S separation from City employment, whichever occurs first. In the event all or any portion of the loan remains unpaid at the time of BLUDAU'S separation, City shall have the right to reduce the unpaid balance by the value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation. SECTION 6. Binding Agreement This Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. SECTION 6. Entire Agreement. This Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: A'PWL 9;,, 2,uoD Dated: ZD a o AS TO FORM: Robert H. Burnham, CITY ATTORNEY mgtemp.agt Mayor of Newp6rt Beach %4tw - omer Blu au City Manager AMENDED EMPLOYMENT AGREEMENT This Amended Employment Agreement (Amended Agreement), which is effective as of the 28"' day of February, 2000, between the City of Newport Beach ( "City ") and Homer Bludau ( "BLUDAU ") is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of the City of Newport Beach (Original Agreement); B. The Original Agreement required periodic evaluation of BLUDAU'S performance as City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU'S performance from his date of hire and determined that his performance warrants an increase in salary and modification of other benefits. Now, Therefore, the Parties agree as follows: SECTION 1. Employment as City Manager. City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties assigned by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cities generally and are performed by management employees of other municipalities. SECTION 2. Effective Date/Term. This Amended Agreement shall remain in effect unless and until terminated pursuant to Section 4. SECTION 3. Base Compensation. City shall pay BLUDAU an annual base salary of $145,600.00 in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. The annual base salary of BLUDAU shall be established by the City Council. This Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold from BLUDAU's base salary 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. City shall also deduct sums BLUDAU is obligated to pay because of participation in plans or programs 0 0 described in Section 5 of this Amended Agreement. SECTION 4. Termination and Severance Pay. A. BLUDAU may terminate this Amended Agreement by giving the City at least forty -five (45) days prior written notice of termination. B. City may terminate BLUDAU, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular meeting. However, consistent with provisions of the City Charter, BLUDAU may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Amended Agreement, and any reasons for termination, if appropriate, at least forty -five (45) days prior to the effective date of termination. C. In the event this Amended Agreement is terminated by the City, BLUDAU shall receive severance pay equal to one -half (1/2) of his annual base salary as of the date of termination. However, BLUDAU shall not be entitled to any severance pay if BLUDAU is terminated because of criminal conduct, malfeasance in office, or a gross abuse of discretion. SECTION 6. Employee Benefits. A. BLUDAU shall accumulate paid leave at the rate of twenty-six (26) days per year, commencing on the effective date of this Amended Agreement. BLUDAU shall also be entitled to eighty hours of administrative leave per year. BLUDAU shall not be entitled to any compensation, or compensatory time off, for overtime. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to other non -safety management employees of the City such as short term and long -term disability plans, life insurance plans, and deferred compensation plans. In addition, BLUDAU shall be entitled to continued participation in the International City Management Associations 457 Deferred Compensation Plan (ICMA Plan). BLUDAU'S participation in the ICMA Plan shall be at BLUDAU'S discretion, at no cost to the City, and any BLUDAU contributions to the ICMA Plan will be at his sole cost without any City contribution. mgremp.agt 2 0 D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $500.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Amended Agreement and the City Charter, the City Charter shall prevail. F. City shall pay BLUDAU $300 per month as an automobile allowance. G. This Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non -safety management employees of the City. SECTION 6. Business Expenses. City shall reimburse BLUDAU for all reasonable business, expenses (except automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7. Meetings and Conferences. BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to this Amended Agreement. SECTION 8. Housing. As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU'S purchase of housing in Newport Beach, City will loan BLUDAU the sum of $50,000 (Loan). The Loan shall be used solely to purchase housing in Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15th of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment mgremp.agt 9 0 penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Amended Agreement or BLUDAU'S separation from City employment In the event all or any portion of the loan remains unpaid at the time of BLUDAU'S separation, City shall have the right to reduce the unpaid balance by the value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation. SECTION 9. Evaluation. The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrant any modification of his base salary and /or benefits. However, any decision to modify BLUDAU'S base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10. General Provisions. A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specified in this Amended Agreement and /or relevant provisions of the City Charter or City ordinance. B. This Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. C. Any notice required by this Amended Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case of the City), or when properly addressed and deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested. D. This Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: /—z d!% mgremp.agt 4 Dated: .z- 10aD (:)L Homer Brudau APPROVED AS TO FORM: ,/Robert H. Bumham, CITY ATTORNEY F:lcatl shared \Ag\CityManager1030700final.doc mgxemp.agt • • • (3 ?) C -3a6a- CITY OF NEWP APPROVED AGENDA ITEM NO. 16 TO: MEMBERS OF THE CITY COUNCIL FROM: Mayor John Noyes Council Members Dennis O'Neil and Tod Ridgeway DATE: March 14, 2000 SUBJECT: CITY MANAGER'S AMENDED EMPLOYMENT AGREEMENT RECOMMENDED ACTION Adopt the three recommended changes to the City Manager's Employment Agreement. DISCUSSION City Manager Homer Bludau signed an Employment Agreement with the City on March 8, 1999. The Agreement calls for periodic performance evaluations and compensation adjustments. The City Manager recently received a satisfactory performance evaluation from the City Council based on his eleven month job performance. Given the successful performance evaluation, a City Council subcommittee composed of Mayor Noyes and Council Members O'Neil and Ridgeway met with the City Manager to discuss employment agreement issues. Based on that meeting, the Council Subcommittee recommends approval of the following Employment Agreement amendments: A salary adjustment of four percent (4 %) to $145,600 annually (Section 3); 2. The availability of the International City Management Association's 457 Deferred Compensation Plan for employee contributions at no cost to the City (Section 5C Employee Benefits); 3. A loan of $50,000 to the City Manager to be applied towards the purchase of housing, with interest payments being made annually by the City Manager and with specific requirements on loan repayments (Section 8 Housing). These three issues constitute the only recommended changes to the Employment Agreement. The Subcommittee makes this recommendation unanimously. A draft of the Agreement with changes in included for action. City Hall . 3300 Newport Boulevard • Post Office Box 1768 9 Newport Beach, California 92659 -1768 0 • AMENDED EMPLOYMENT AGREEMENT This Amended Employment Agreement (Amended Agreement), which is effective as of the 28`" day of February, 2000, between the City of Newport Beach ( "City") and Homer Bludau ( "BLUDAU ") is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of the City of Newport Beach (Original Agreement); B. The Original Agreement required periodic evaluation of BLUDAU'S performance as. City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU'S performance from his date of hire and determined that his performance warrants an increase in salary and modification of other benefits. Now, Therefore, the Parties agree as follows: SECTION 1. Employment as City Manager. City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties assigned by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cities generally and are performed by management employees of other municipalities. SECTION 2. Effective Date/Term. This Amended Agreement shall remain in effect unless and until terminated pursuant to Section 4. SECTION 3. Base Compensation. City shall pay BLUDAU an annual base salary of $145,600.00 in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. The annual base salary of BLUDAU shall be established by the City Council. This Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold from BLUDAU's base salary 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. City shall also deduct sums BLUDAU is obligated to pay because of participation in plans or programs 0 • described in Section 5 of this Amended Agreement. SECTION 4. Termination and Severance Pay. A. BLUDAU may terminate this Amended Agreement by giving the City at least forty-five (45) days prior written notice of termination. B. City may terminate BLUDAU, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular meeting. However, consistent with provisions of the City Charter, BLUDAU may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Amended Agreement, and any reasons for termination, if appropriate, at least forty-five (45) days prior to the effective date of termination. C. In the event this Amended Agreement is terminated by the City, BLUDAU shall receive severance pay equal to one -half (1/2) of his annual base salary as of the date of termination. However, BLUDAU shall not be entitled to any severance pay if BLUDAU is terminated because of criminal conduct, malfeasance in office, or a gross abuse of discretion. SECTION 5. Employee Benefits. A. BLUDAU shall accumulate paid leave at the rate of twenty -six (26) days per year, commencing on the effective date of this Amended Agreement. BLUDAU shall also.be entitled to eighty hours of administrative leave per year. BLUDAU shall not be entitled to any compensation, or compensatory time off, for overtime. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to other non -safety management employees of the City such as short term and long -term disability plans, life insurance plans, and deferred compensation plans. In addition, BLUDAU shall be entitled to continued participation in the International City Management Associations 457 Deferred Compensation Plan (ICMA Plan). BLUDAU'S participation in the ICMA Plan shall be at BLUDAU'S discretion, at no cost to the City, and any BLUDAU contributions to the ICMA Plan will be at his sole cost without any City contribution. mgremp.agt C n L r1 U D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $500.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Amended Agreement and the City Charter, the City Charter shall prevail. F. City shall pay BLUDAU $300 per month as an automobile allowance. G. This Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non - safety management employees of the City. SECTION 6. Business Expenses. City shall reimburse BLUDAU for all reasonable business, expenses (except automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7. Meetings and Conferences. BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to this Amended Agreement. SECTION 8. Housing. As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU'S purchase of housing in Newport Beach, City will loan BLUDAU the sum of $50,000 (Loan). The Loan shall be used solely to purchase housing in Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15th of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre- payment mgremp. agt • penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Amended Agreement or BLUDAU'S separation from City employment In the event all or any portion of the loan remains unpaid at the time of BLUDAU'S separation, City shall have the right to reduce the unpaid balance by the value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation. SECTION 9. Evaluation. The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrant any modification of his base salary and /or benefits. However, any decision to modify BLUDAU'S base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10. General Provisions. A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specified in this Amended Agreement and /or relevant provisions of the City Charter or City ordinance. B. This Amended Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. C. Any notice required by this Amended Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case of the City), or when properly addressed and deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested. D. This Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. Dated: mgremp.agt 151 John Noyes Mayor of Newport Beach • Dated: APPROVED AS TO FORM: Robert H. Burnham, CITY ATTORNEY F:\cat\shared\Ag\CityManager1030700final.doc mgremp. agt 5 0 Homer Bludau �&I6f • • 3«) EMPLOYMENT AGREEMENT The City of Newport Beach ( "City ") and Homer Bludau ( "BLUDAU ") agree as follows: SECTION 1. Emolovment as Citv Manaaer City shall employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specified in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties assigned by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cities generally and are performed by management employees of other municipalities. SECTION 2. Effective Date/Term. This Agreement shall be effective, and BLUDAU shall report to work, on May 3, 1999. This Agreement shall remain in effect unless terminated pursuant to Section 4. SECTION 3. Base Compensation. City shall pay BLUDAU an annual base salary of $140,000.00 in twenty-six (26) equal installments paid at the same time other management employees of the City are paid. The annual base salary of BLUDAU 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. City shall have the right to deduct or withhold from BLUDAU's base salary 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. City shall also deduct sums BLUDAU is obligated to pay because of participation in plans or programs described in Section 6 of this Agreement. SECTION 4. Termination and Severance Pay. A. BLUDAU may terminate this Agreement by giving the City at least forty-five (45) days prior written notice of termination. B. City may terminate BLUDAU, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular meeting. However, consistent with provisions of the City Charter, BLUDAU may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Agreement, and any reasons for termination, if appropriate, at • 0 least forty-five (45) days prior to the effective date of termination. C. In the event this Agreement is terminated by the City, BLUDAU shall receive severance pay equal to one -half (1/2) of his annual base.salary as of the date of termination. However, BLUDAU shall not be entitled to any severance pay if BLUDAU is terminated because of criminal conduct, malfeasance in office, or a gross abuse of discretion. SECTION S. Employee Benefits. A. BLUDAU shall accumulate paid leave at the rate of twenty -six (26) days per year, commencing on the effective date of this Agreement. BLUDAU shall also be entitled to eighty hours of administrative leave per year. BLUDAU shall not be entitled to any compensation, or compensatory time off, for overtime. B. BLUDAU shall receive the same health insurance and retirement benefits as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to other non - safety management employees of the City such as short term and long term disability plans, life insurance plans, and deferred compensation plans. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $500.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Agreement and the City Charter, the City Charter shall prevail. F. City shall pay BLUDAU $300 per month as an automobile allowance. G. This Agreement shall be deemed amended whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non - safety management employees of the City. SECTION 6. Business Expenses. City shall reimburse BLUDAU for all reasonable business, expenses (except mgremp.agt V, 0 0 automobile expenses) actually incurred by BLUDAU in the performance of services pursuant to this Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7. Meetings and Conferences. BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of the City Manager and pursuant to this Agreement. SECTION 8. Moving Expenses. City shall pay BLUDAU the sum of $15,000 to assist in relocating to Newport Beach (relocation assistance). The payment of relocation assistance is in lieu of reimbursement for specific expenses actually incurred by BLUDAU in moving to Newport Beach. City shall pay relocation assistance to BLUDAU on the effective date of this Agreement. SECTION 9. Housing. As required by the City Charter, BLUDAU shall become a full time resident and elector of the City of Newport Beach within ninety (90) days after the effective date of this Agreement and remain a resident and elector of the City of Newport Beach during the term of this Agreement. SECTION 10. Evaluation. The City Council shall conduct an initial evaluation of BLUDAU's performance within six (6) months from the effective date of this Agreement. Subsequent to the initial evaluation, the City Council shall annually evaluate BLUDAU's performance. The City Council shall, as part of the evaluation, determine if BLUDAU's base salary or benefits should be modified. SECTION 11. General Provisions. A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specified in this Agreement and/or relevant provisions of the City Charter or City ordinance. B. This Agreement shall be binding on, and inure to the benefit of, the heirs, executors, and assigns of BLUDAU. mgremp.agt u n u C. Any notice required by this Agreement shall be in writing and deemed given when personally delivered (to the City Clerk in the case of the City), or when properly addressed and deposited in the United States mail, registered or certified, with postage prepaid and return receipt requested. D. This Agreement represents the entire understanding of the parties and any modification is effective only if it is in writing and signed by the party to be charged. Dated: ���►��"� S / Dated: g 1f°9,!F APPROVED AS TO FORM: Dennis D. O'Neil Mayor of Newport Beach MG_ �.,. obert H. Burnham, CITY ATTORNEY F:\cat\shared\Ag\CityManager1030899final.doc mgremp.agt SIXTH AMENDED EMPLOYMENT AGREEMENT This Sixth Amended Employment Agreement (Sixth Amended Agreement), which is effective as of the 1st of September, 2007, between the City of Newport Beach ( "City ") and Homer Bludau ( "BLUDAU ") is made in light of the following: RECITALS A. City and BLUDAU entered into an agreement on March 8, 1999 pursuant to which City employed BLUDAU as the City Manager of City of Newport Beach (Original Agreement); B. The Original Agreement was amended first on February 28, 2000 (First Amended Agreement) and both the Original Agreement and the following five Amended Agreements required periodic evaluation of BLUDAU's performance as City Manager to determine if his "base salary or benefits should be modified." C. The Newport Beach City Council has conducted an evaluation of BLUDAU's performance over the past twelve months and has determined that his performance warrants an increase in salary and modification of other benefits as specified in this Sixth Amended Agreement. Now, therefore, the Parties agree as follows: SECTION 1 Employment as City Manager City shall continue to employ BLUDAU as City Manager of the City of Newport Beach to perform the functions and duties of that position as specked in the City Charter and Municipal Code of the City of Newport Beach. BLUDAU shall also perform other duties by the City Council, without additional compensation, so long as those duties are related to matters of concern to the City of Newport Beach or cites generally and are performed by management employees of other municipalities. SECTION 2 Effective Date/Term This Sixth Amended Agreement shall take effect September 1, 2007, and remain in effect until September 1, 2009, or until amended by the Parties or terminated pursuant to Section 4. SECTION 3 Base Compensation City shall pay BLUDAU an annual base salary of $218,338.00, effective September 1, 2007, in twenty -six (26) equal installments paid at the same time other management employees of the City are paid. Effective September 1, 2008, BLUDAU's annual base salary will increase by 4.5% and remain in effect until this agreement is changed by City Council action. This Sixth Amended Agreement shall be deemed modified to be consistent with any subsequent resolution adopted by the City Council changing the base salary of the City Manager or the manner (but not the amount) in which management employees are paid. City shall have the right to deduct or withhold from BLUDAU's base salary any and all sum 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. City shall also deduct sums BLUDAU is obligated to pay because of BLUDAU's participation in plans or programs generally described in Section 5 of this Sixth Amended Agreement. SECTION 4 Termination and Severance Pay A. BLUDAU may terminate this Sixth Amended Agreement by giving the City at least one hundred and twenty (120) days prior written notice of termination. B. City may terminate this Sixth Amended Agreement, without cause, upon the affirmative votes of a majority of the members of the City Council at any regular or special meeting of the City Council. However, consistent with provisions of the City Charter, this Sixth Amended Agreement may not be terminated within ninety (90) days after any municipal election for the selection or recall of one or more members of the City Council. BLUDAU shall be furnished with written notice stating the Council's intention to terminate this Sixth Amended Agreement, and any reasons for termination, if deemed appropriate by the City Council, at least forty -five (45) days prior to the effective date of termination. C. In the event this Sixth Amended Agreement is terminated by the City, BLUDAU shall, as of the effective date of termination, receive severance pay equal to one -half (112) of his then current annual base salary. However, BLUDAU shall not be entitled to any severance pay if this Sixth Amended Agreement is terminated because of BLUDAU's criminal conduct, malfeasance in office, or gross abuse of discretion. SECTION 5 Employee Benefits A. BLUDAU shall continue to accumulate flex leave at the rate of twenty -six (26) days per year. BLUDAU shall also be entitled to 120 hours of administrative leave per year. BLUDAU shall not be entitled to any 2 compensation, or compensatory time off, for overtime. BLUDAU shall not be entitled to flex leave spill -over pay and shall not be subject to any flex leave accrual threshold. B. BLUDAU shall be entitled to the same health insurance and retirement benefits on the same terms and conditions as are available to other non - safety management employees of the City. C. BLUDAU shall be entitled to participate in plans and programs available to other non - safety management employees of the City such as short term and long term disability plans, life insurance plans, and deferred compensation plans. D. BLUDAU shall undergo an annual physical examination. City shall reimburse BLUDAU for the actual costs of the annual physical examination up to a maximum of $1,000.00. E. The then current City personnel ordinances, resolutions, rules and policies shall apply to BLUDAU in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Sixth Amended Agreement and the City Charter, the City Charter shall prevail. F. This Sixth Amended Agreement shall be deemed modified whenever the City Council adopts a resolution or takes action changing the benefits, plans or other terms and conditions of employment generally applicable to other non - safety management employees of the City. SECTION 6 Business Expenses A. Effective January 1, 2008, BLUDAU shall no longer receive a monthly car allowance of $450 for use of his personal car for City business. B. City shall reimburse BLUDAU for all reasonable business expenses actually incurred by BLUDAU in the performance of services pursuant to this Sixth Amended Agreement. BLUDAU shall, to the extent possible, use a credit card issued in the name of the City of Newport Beach to pay for business expenses. SECTION 7 Meetings and Conferences BLUDAU shall, at City expense, be entitled to attend a reasonable number of local, state and national conferences relevant to the performance of duties required of a City Manager and pursuant to the City Charter, the Newport Beach Municipal Code and this Sixth Amended Agreement. 3 SECTION 8 Housing As required by the City Charter and the Original Agreement, BLUDAU has established residency in, and become an elector of, the City of Newport Beach. To facilitate BLUDAU's purchase of housing in Newport Beach, City has loaned BLUDAU the sum of $50,000 (Loan). The Loan has been, and shall be, used solely to purchase housing in Newport Beach. BLUDAU shall pay simple interest on the unpaid balance of the Loan during each fiscal year (or portion) in which the Loan, or any portion of the Loan, remains unpaid. The interest payment for all or a portion of any fiscal year shall be due on or before September 15" of the following fiscal year. The interest rate on the Loan for each fiscal year shall be the average rate of return on all City investments during that fiscal year. BLUDAU may, but is not required to, make payments to reduce the principal amount of the Loan at any time and payments to reduce the principal shall not be subject to any pre - payment penalty. BLUDAU shall pay the entire unpaid balance of the Loan upon the expiration of ten (10) years from the effective date of this Sixth Amended Agreement or BLUDAU's separation from City employment. In the event all or any portion of the Loan remains unpaid at the time of BLUDAU's separation, City shall have the right to withhold, from value of any accumulated paid leave for which BLUDAU would otherwise be paid upon separation, a sum equal to the amount of the then current unpaid balance. SECTION 9 Evaluation The City Council shall conduct regular evaluations of BLUDAU's performance during the term of this Sixth Amended Agreement. The City Council may, as part of the evaluation, discuss if BLUDAU's performance warrants any modification of his base salary and /or benefits. However, any decision to modify BLUDAU's base salary or benefits shall be made by the City Council only at a duly noticed public meeting held in compliance with the Ralph M. Brown Act. SECTION 10 General Provisions A. BLUDAU shall serve at the pleasure of the City Council as specified in the Newport Beach City Charter and may be terminated "at will" and without specification of cause, subject only to the procedural requirements specked in this Sixth Amended Agreement and/or relevant provisions of the City Charter of City ordinance. B. This Sixth Amended Agreement shall be binding on, and inure to the benefit of, the heirs, and assigns of BLUDAU. C. Any notice required by Amended Agreement shall be in writing and deemed given delivered (to the City Clerk in the case of the City), or and 4 .• • , . • • deposited in the United States mail, postage prepaid and return receipt requested. D. This Sixth Amended Agreement represents the entire understanding of the Parties and any modification is effective only if it is in writing and signed by the Party to be charged. 1 Dated: ` EatSelich Mayor of Newport Beach Dated: APPROVED AS TO FORM: Robin Clauson City Attorney Homer L. Bludau City Manager of Newport Beach La onne Harkless City Clerk G3z62 ! 3 ion -aa av n+e am couxcu CfIY DF NBYYPONT BEIU CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 2 December 18, 2007 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Council Ad Hoc Compensation Committee Mayor Ed Selich Council Member Steve Rosansky Council Member Don Webb SUBJECT: Proposed Modifications to City Manager Employment Agreement RECOMMENDATION: Approve the Proposed Employment Agreement for the Newport Beach City Manager. DISCUSSION: The City Manager has been provided his annual work performance evaluation for 2007, and has had an opportunity to dialogue with the City Council as to its contents. Both parties found the process to be both constructive and positive. In the December 11, 2007, Closed Session the City Council appointed us to be the City Council's negotiation team with the City Manager to reach mutually acceptable terms and conditions for a new employment agreement with City Manager Homer Bludau. As you know, the Brown Act does not allow the City Manager to negotiate salary and employment conditions with the complete City Council; thus, a committee of less than a quorum of the City Council serves as the negotiation team. At the time of this memo, we have not concluded our negotiations with the City Manager; however, we hope to do so and have a recommendation to you for the December 18, 2007, Closed Session, so Council action can be completed as part of the December 18, 2007, Council agenda. The terms and conditions of the employment agreement would be made public at that time. Should that not happen, we intend to pull this item from the agenda and continue it until a future City Counpli meeting, when all discussions are completed.