HomeMy WebLinkAbout12-06-2011, C2-REDUCTION IN MANAGEMENT COMPENSATIONMeeting Darn
hum Number
council.
ac cn Oa Repont
C I T Y O F S A N L U I S O B I S P O
FROM :
Monica Irons, Director of Human Resource s
SUBJECT : REDUCTION IN MANAGEMENT COMPENSATIO N
RECOMMENDATIO N
1.Adopt a resolution reducing compensation for appointed officials, department heads, an d
management employees resulting in an estimated $807,000 annually in savings during th e
term of the resolution, January 1, 2012 through December 31, 2013 .
2.Accept the City Manager's waiver of car allowance .
3.Adopt a resolution ceasing to pay and report the value of the employer paid membe r
contribution (EPMC) to California Public Employees Retirement System (Ca1PERS).
4.Authorize the Mayor to execute amended contracts of employment with the City Manage r
and the City Attorney reducing their compensation as specified in this report .
DISCUSSIO N
Backgroun d
The City's management group includes 73 employees : 11 department heads (including tw o
appointed officials); and 62 other management or exempt level employees . Compensation an d
benefits for this group of employees is set by resolution that expires December 31, 2011 . Sinc e
these employees are unrepresented, there are no negotiations, as there are for other regula r
employees . Instead, the group provides the City Manager with a recommendation afte r
discussing the issues among its members .
This group's discussions were grounded in the City's fiscal reality and Council's labor relation s
objectives . The group discussed the adoption of a series of budget balancing strategies during th e
2011-13 Financial Plan process including reducing the cost of personnel via negotiate d
concessions . The management group's recommendations were guided by the following labo r
relations objectives provided by Council :
1.Implement sustainable actions to reduce total employee compensation costs by 6 .8% or a
total of $3 .1 million annually for all funds ($2 .6 million in the General Fund only) as se t
forth in the 2011-13 Financial Plan ; and ,
2.Achieve "significant progress" in the area of long-term systemic pension cos t
containment and reduction, including :
o a shift to employees paying the full member contribution required by Ca1PER S
(eight percent for Miscellaneous employees and nine percent for Safet y
!1
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employees); thus moving away from EPMC for current and future employees ;
and ,
o implementation of a second tier retirement benefit, or ,
o other actions that meet this objective .
The management group determined the following recommendations most closely achieve d
Council's labor relations objectives :
1.Effective the first full payroll period in January 2012 the unrepresented managemen t
group will pay the full member contributions to Ca1PERS (eight percent fo r
Miscellaneous and nine percent for Safety employees).
2.A resolution term of two years (January 1, 2012 through December 31, 2013) with n o
across the board (e .g . cost of living) salary increases and no changes to the Cit y
contribution to health insurance .
3.The group recognizes the necessity of implementing a second tier retirement benefit .
The City currently pays the member contribution to Ca1PERS for the management, confidential ,
San Luis Obispo City Employees Association (SLOCEA), and the International Association o f
Firefighters, Local 3523 (Fire Union). Several years ago, the San Luis Obispo Police Officer s
Association (POA), the San Luis Obispo Police Staff Officers Association (SLOPSOA), and th e
Battalion Chiefs agreed to pay the member contribution to Ca1PERS and received equivalen t
salary increases . The management group will not receive any offsetting or across the boar d
salary increases during the term of this agreement . Further, the City currently reports the value o f
the member contribution to Ca1PERS as additional compensation . By adopting the two propose d
resolutions, this practice will cease and the member contribution will no longer be reported t o
Ca1PERS as additional compensation .
In addition to the management recommendations outlined above, the department heads als o
recommended to the City Manager the elimination of the department heads' ability to cash ou t
unused administrative leave at year end . This option had been suspended in the 201 1
Management Compensation Resolution . The elimination of this benefit saves approximatel y
$40,000 annually that is a budgeted expense based on past experience .
The City Manager is committed to taking a continued leadership role in the area of sustainability
and therefore, waives her monthly car allowance in addition to the above actions . Both the Cit y
Manager's and City Attorney's contracts preclude reductions during the term of their contracts ,
but both appointed officials have agreed to the reductions outlined . Thus, staff recommends tha t
Council authorize the Mayor to execute the necessary amendments to the appointed officials '
contracts to implement the reductions approved by the attached resolutions .
These reductions in compensation are significant, especially when taken in combination wit h
average Ca1PERS health plan premiums increases of three percent and an almost three percen t
increase in the consumer price index during the past twelve months .
However, the City's managers remain committed to leading by example, continuing to provid e
excellent community service, and advancing Council priorities . The managers recognize the
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need for sustainable financial solutions, including pension cost reductions and containment .
Thus, while the group is concerned about the City's ability to attract well qualified employee s
with a reduced pension benefit, they understand the trend is to implement second tier pensio n
formulas for new hires and they intend to continue to support efforts toward achieving the City's
long term fiscal sustainability.
In reviewing the Management Compensation Resolution (Attachment 1, Exhibit A) mino r
clarifications to be consistent with the City's past practice have been included in Section I and J .
Section I states that approval of vacation requests can be considered in light of the operationa l
needs of the City . When an employee reaches the maximum vacation accrual amount, a n
extension can be granted by a department head or the City Manager to allow the employee to us e
the accrued vacation instead of losing it . In the past exceptions have been occasionally granted t o
provide up to a six-month period to use the accrued vacation . If the vacation is not used durin g
the approved period no further extension is granted and it is lost . Further, a modification i n
Section J clarifies that administrative leave is not paid out upon termination of employment .
Neither modification has any fiscal impact .
FISCAL IMPAC T
These reductions in compensation of $807,000 exceed the financial target of $759,000 for th e
group by approximately $48,000 per year and result in an ongoing 7 .2% reduction in tota l
compensation costs for this employee group .
ALTERNATIVE S
Do not approve the resolutions and contract amendments.This alternative is not recommended ,
as the resolutions and contract amendments are consistent with the Council's labor relation s
objectives and the City's employer-employee relations policies .
ATTACHMENT S
1.Management compensation resolution .
2.Resolution ceasing to pay and report the value of EPMC to Ca1PERS for th e
unrepresented management group .
3.Amended City Manager Contract of Employment .
4.Amended City Attorney Contract of Employment .
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ATTACHMENT 1
RESOLUTION NO . (2011 Series )
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISP O
REGARDING MANAGEMENT COMPENSATION FOR APPOINTED OFFICIALS ,
DEPARTMENT HEADS, AND MANAGEMENT EMPLOYEES AND SUPERSEDIN G
PREVIOUS RESOLUTIONS IN CONFLIC T
WHEREAS,the unrepresented management employees (Appointed Officials, Department
Heads, and Management employees) of the City of San Luis Obispo met multiple times during th e
months of September and October to identify sustainable reductions in total compensation costs t o
achieve Council's labor relations objectives to reduce total compensation costs and implemen t
sustainable pension cost containment and reductions ; and
WHEREAS,the City of San Luis Obispo strives to provide excellent service to th e
community at all times, and supports this standard by promoting organizational values includin g
customer service, productivity, accountability, innovation, initiative, stewardship, and ethics ; and
WHEREAS,to achieve its service standards the City must attract and retain well qualifie d
employees who exemplify its organizational values, an d
WHEREAS,the unrepresented management employees acknowledge the fiscal challenge s
facing the City of San Luis Obispo and are committed to working with the City to help achiev e
long-term sustainable solutions ; an d
WHEREAS,the unrepresented management employees have demonstrated sensitivity t o
the fiscal challenges facing the City for several years by agreeing to no across the board salar y
increases (e .g . "cost of living" increases) since January 2009 ; and
WHEREAS,the unrepresented management employees have also agreed to no increases i n
the City's contribution to health care for the past two calendar years, while medical premiums hav e
increased in that same timeframe and will increase again in 2012 ; an d
WHEREAS,the unrepresented management employees remain committed to providin g
high quality service to the citizens of San Luis Obispo in an efficient and effective manner ;
NOW, THEREFORE, BE IT RESOLVED,that the Council of the City of San Luis Obispo
hereby revises management compensation as follows :
SECTION 1 .Unrepresented management employees will begin paying the full Membe r
Contribution to Ca1PERS (e .g . eight percent of salary for Miscellaneous employees and nin e
percent of salary for Safety employees) and the City will no longer report to Ca1PERS the Membe r
Contribution as additional compensation, effective the first full payroll period in January 2012 .
SECTION 2 . There will be no across the board salary increases (e .g . "cost of living"
increases).
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ATTACHMENT 1
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increases).
SECTION 3 .There will be no increase to the City's health contribution .
SECTION 4 .Cash out of administrative leave is eliminated .
SECTION 5 .City Manager's car allowance as set forth in Resolution 9440 (200 3
Series) is eliminated .
SECTION 7 . The City shall continue to provide employees certain fringe benefits as se t
forth in Exhibit "A", fully incorporated by reference .
SECTION 8 .Unrepresented management employees acknowledge the City's need t o
achieve long term financial sustainability and pension cost reductions through the establishmen t
of a second tier retirement formula for new employees . If the City amends the Ca1PER S
Miscellaneous contract to provide a second tier retirement formula, management employees wil l
participate as required by Ca1PERS .
SECTION 9 .All prior resolutions relating to management and appointed officia l
compensation and benefits are hereby superseded to the extent inconsistent with this resolution .
SECTION 10 .This resolution shall be in effect from January 1, 2012 through December
31, 2013 .
SECTION 11 .The Director of Finance and Information Technology shall reduce th e
appropriate accounts to reflect the compensation changes .
Upon motion of , seconded b y
, and on the following vote :
AYES :
NOES :
ABSENT :
The foregoing resolution was adopted this 6th day of December, 2011 .
Mayor Jan Marx
ATTEST :
Elaina Can o
City Clerk
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ATTACHMENT 1
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APPROVED AS TO FORM :
Richard C . Bolano s
Partner, Liebert Cassidy Whitmore
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EXHIBIT "A "
Page 1 of 6
MANAGEMENT FRINGE BENEFITS 201 2
Section A
Medical, Dental, Visio n
The City shall establish and maintain medical, dental and vision insurance plans for departmen t
head and management employees and their dependents . The City reserves the right to choose th e
method of insuring and plans to be offered .
The City has elected to participate in the PERS Health Benefit Program pursuant to the Publi c
Employees' Medical and Hospital Care Act (PEMHCA) with the "unequal contribution option "
at the PERS minimum contribution rates, $112 .00 per month for active employees and $106 .4 0
for retirees as of January 1, 2012 . The City's contribution toward retirees shall be increased b y
5% per year of the City's contribution for the active employees until such time as contribution s
for employees and retirees are equal .
Employees with proof of medical insurance elsewhere are not required to participate in th e
medical insurance plan and may receive the unused portion of the City's contribution (afte r
dental and vision insurance is deducted) in cash in accordance with the City's cafeteria plan .
Those employees will be assessed $16 .00 per month to be placed in the Retiree Health Insuranc e
Account. This account will be used to fund the City's contribution toward retiree premiums an d
the City 's costs for the Public Employees 'Contingency Reserve Fund and Administrative Costs .
However, there is no requirement that these funds be used exclusively for this purpose, nor an y
guarantee that they will be sufficient to fund retiree health costs, although they will be used fo r
employee benefits .
Employees will be required to participate in the City's dental and vision plans at the employee -
only rate . Should they elect to cover dependents in the City's dental and vision plans, they ma y
do so, even if they do not have dependent coverage for medical insurance .
Employees shall participate in term life insurance of $4,000 through payroll deduction as a par t
of the cafeteria plan .
Section B
Cafeteria Plan Contributio n
The City's contribution to the Cafeteria Plan for regular, full-time employees will remain th e
same as the 2010 amounts .
Employee Only
$469 monthl y
Employee + 1
$938 monthl y
Employee + Family
$1254 monthl y
Employees with proof of medical insurance elsewhere may elect to opt out of the City's medica l
plan and receive a $200 cafeteria contribution . Employees who opted out of the City's medica l
insurance coverage and were hired prior to August 31, 2008 were "grandfathered" in at the $79 0
per month contribution level, until that time when they elected to be covered under the tiere d
contribution structure . An employee elects to be covered under the tiered contribution structur e
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Resolution No . (2012 Series)
EXHIBIT "A "
Management Fringe Benefits 2012
Page 2 of 6
when he or she enrolls as an employee only or with dependents (employee plus one or family).
At that time the employee would no longer be grandfathered in at the $790 per month
contribution, but would receive the tiered contribution amount .
Employees hired prior to August 31, 2008 that had employee only medical insurance coverag e
were "grandfathered" in at the $790 per month contribution level, until such time when the y
added dependents or opted out . At that time the employee would no longer be grandfathered i n
at the $790 per month contribution, but would receive the tiered contribution amount .
Less than full-time employees shall receive a prorated share of the City's contribution .
The City agrees to continue its contribution to the cafeteria plan for two (2) pay periods in th e
event that an employee has exhausted all paid time off due to an employee's catastrophic illness .
Section C
Life and Disability Insuranc e
The City shall provide the following special insurance benefits in recognition of management
responsibilities :
1.Long-term disability insurance providing 66 2/3% of gross salary (maximum benefi t
$5,500 per month) to age 65 for any sickness or accident, subject to the exclusions i n
the long-term disability policy, after a 30-day waiting period .
2.
In addition to $4,000 term life insurance purchased by the employee through the
cafeteria plan a $100,000 term life insurance for department heads and $50,000 term
life insurance for management employees, including accidental death an d
dismemberment .
Section D
Retiremen t
The City shall provide the California Public Employees' Retirement System 's (Ca1PERS) 2 .7 %
at 55 plan to all eligible employees including the amendments permitting conversion of unused
sick leave to additional retirement credit, the 1959 survivor's benefit (Level Four), one year fina l
compensation, and pre-retirement Option 2 death benefit.
The Police and Fire Chiefs shall receive the same retirement formula as sworn personnel in thei r
departments .
The employee is responsible for paying the employee's contribution to CaIPERS (8% fo r
miscellaneous, 9% for safety) effective the first full pay period in January 2012 .
The City shall no longer report as salary all Employer-Paid Member Contributions (EPMC) t o
Ca1PERS for the purposes of retirement credit in accordance with Government Code Sectio n
20636 (c) (4) effective the first full pay period in January 2012 .
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Resolution No . (2012 Series)
EXHIBIT "A "
Management Fringe Benefits 2012
Page 3 of 6
Section E
Supplemental Retiremen t
The City shall contribute 1% of salary for management employees and 2% of salary fo r
department heads to a defined contribution supplemental retirement plan established i n
accordance with sections 401 (a) and 501 (a) of the Internal Revenue Code of 1986 an d
California Government Code sections 53215-53224 .
Section G
Retiree Medical Benefit Trus t
Management employees participate in the San Luis Obispo Employees Retiree Medical Trust .
This trust aims to provide for health insurance and other medical expense reimbursements to Sa n
Luis Obispo City Employees Association (SLOCEA) and management employees afte r
retirement . The Trust is administered separately by SLOCEA and a Board of Trustees . The City
is not involved with the establishment or administration of the Trust . Included in the funding fo r
the Trust will be amounts designated by SLOCEA to be deducted from each employees '
paycheck . The City's sole responsibility is to forward the designated amounts to the Trust . The
employee contribution is currently $100 per month and $6 .50 per month to SLOCEA fo r
administration of the Trust.
Appointed officials and public safety chiefs have opted not to participate in the Retiree Medica l
Trust .
Section H
Pay for Performanc e
In 1996 the City Council established the Management Pay for Performance System fo r
management employees . The system is designed to recognize and reward excellen t
performance by managers and to provide an incentive for continuous improvement an d
sustained high performance . Instead of step increases, the management employee move s
through his/her salary range solely according to accomplishment of objectives and job -
related behavior . Further information about the Management Pay for Performanc e
System can be found in the Management Pay for Performance System Guide .
Section I
Vacation
Vacation leave is governed by section 2 .36 .440 of the Municipal Code, except that it may b e
taken after the completion of the sixth calendar month of service since the benefit date . Vacatio n
leave shall be accrued as earned each payroll period provided that not more than twice the annua l
rate may be carried over to a new calendar year .
However, if the City Manager determines that a department head has been unable to tak e
vacation due to the press of City business, the City Manager may approve up to a six-mont h
extension of maximum vacation accrual . The City Manager may, within two years of appointin g
a department head, increase the rate of vacation accrual to a maximum of 120 hours per year .
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Resolution No . (2012 Series)
EXHIBIT "A "
Management Fringe Benefits 2012 Page 4 of6
Vacation schedules for management employees shall be based upon the needs of the City an d
then, insofar as possible, upon the wishes of the employee . A department head may not deny a
management employee's vacation request if such denial will result in the loss of vacation accrua l
by the employee, except that, a department head may approve up to a six-month extension o f
maximum vacation accrual . However, in no event shall more than one such extension be grante d
in any calendar year .
Department Head and management employees are eligible, once annually in December, t o
request payment for up to 40 hours of unused vacation leave provided that an employee's overall
performance and attendance practices are satisfactory .
Section J
Administrative Leave
Department heads and appointed officials shall be granted 80 hours of administrative leave pe r
calendar year .
Management employees shall be granted 48 hours of administrative leave per calendar year .
Administrative leave hours shall be pro-rated when a department head or management employe e
is appointed or leaves employment during the calendar year . The employee's final check will b e
adjusted to reflect the pro-rated hours, however there is no provision to receive cash payment fo r
unused administrative hours .
Department Heads and Managers are considered exempt from the overtime provisions of the Fai r
Labor Standards Act (FLSA) and not eligible for overtime payment. In general, managemen t
employees are expected to work the hours necessary to successfully carry out their duties an d
frequently must return to work or attend meetings and events outside their normal workin g
hours . However, when specifically authorized by the department head due to extraordinar y
circumstances, a management employee may receive overtime payment of time and one-half fo r
hours worked above and beyond what would be considered normal work requirements during a n
emergency event lasting at least eight (8) hours .
Section K
Holiday s
Department heads and management employees shall receive 11 fixed plus 2 floating holidays pe r
year . The floating holidays shall be accrued on a semi-monthly basis and added to the vacatio n
accrual .
Section L
Sick Leav e
Sick leave is governed by section 2 .36 .420 of the Municipal Code . An employee may take up t o
16 hours per year of sick leave if required to be away from the job to personally care for a
member of his/her immediate family as defined in Section 2 .36 .420 . This may be extended to 40
hours per year if the family member is part of the employee's household and to 56 hours if a
household family member is hospitalized and the employee submits written verification of such
hospitalization . If the family member is a child, parent, domestic partner or spouse, an employe e
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Resolution No . (2012 Series)
EXHIBIT "A "
Management Fringe Benefits 2012 Page 5 of6
may use up to 48 hours annually to attend to the illness of the child, parent or spouse, instead o f
the lesser maximums above, in accordance with Labor Code Section 233 .
In conjunction with existing leave benefits, department head and management employees wit h
one year of City service who have worked at least 1,280 hours in the previous year may b e
eligible for up to 12 weeks of Family/Medical Leave in accordance with the federal Family an d
Medical Leave Act and the California Family Rights Act .
Sick leave may be used to be absent from duty due to the death of a member of the employee's
immediate family as defined in Section 2 .36 .420, provided such leave shall not exceed fort y
working hours for each incident . The employee may be required to submit proof of relative's
death before being granted sick leave pay . False information concerning the death o r
relationship shall be cause for discharge .
Upon termination of employment by death or retirement,a percentage of the dollar value of th e
employee's accumulated sick leave will be paid to the employee, or the designated beneficiary o r
beneficiaries according to the following schedule :
(A)Death — 25 %
(B)Retirement and actual commencement of Ca1PERS benefits :
(1)After ten years of continuous employment — 10%
(2)After twenty years of continuous employment — 15 %
Section M Workers' Compensation Leave
An employee who is absent from duty because of on-the-job injury in accordance with Stat e
workers' compensation law and is not eligible for disability payments under Labor Code Sectio n
4850 shall be paid the difference between his/her base salary and the amount provided b y
workers' compensation law during the first ninety (90) business days of such temporar y
disability absence . Eligibility for workers' compensation leave requires an open workers '
compensation claim .
Section N
Vehicle Assignmen t
For those department heads requiring the use of an automobile on a regular 24-hour basis t o
perform their normal duties, the City will, at City option, provide a City vehicle or an appropriat e
allowance for the employee's use of a personal automobile . Department heads who are no t
provided a City vehicle shall receive a car allowance of $236 per month .
The use of a personal automobile for City business will be eligible for mileage reimbursement i n
accordance with standard City policy .
Section 0
Uniform Allowanc e
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Resolution No . (2012 Series)
EXHIBIT "A "
Management Fringe Benefits 2012 Page 6 of6
For employees required to wear a uniform, including the Fire Chief, Fire Marshall and Polic e
Chief, shall receive the same uniform allowance as those they directly supervise .
Section P
Appointed Officials
The fringe benefits outlined in this exhibit for department heads apply to appointed officials ,
except where they have been modified by council resolution .
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ATTACHMENT 2
RESOLUTION NO . (2011 Series )
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO CEASIN G
TO PAY AND REPORT THE VALUE OF EMPLOYER PAID MEMBE R
CONTRIBUTIONS FOR APPOINTED OFFICIALS AND MANAGEMENT EMPLOYEE S
AND SUPERSEDING PREVIOUS RESOLUTIONS IN CONFLICT
WHEREAS,the Council of the City of San Luis Obispo has the authority to implemen t
Government Code Section 20636(c) (4) pursuant to Section 20691 ; an d
WHEREAS,the Council of the City of San Luis Obispo has a resolution which no longe r
provides for the normal member contributions to be paid by the employer and reported as additiona l
compensation for appointed officials and management employees ; and
WHEREAS,one of the steps in the procedures to implement Section 20691 is the adoptio n
by the Council of the City of San Luis Obispo of a Resolution to no longer pay and report the valu e
of said Employer Paid Member Contributions (EPMC); an d
WHEREAS,the governing body of the City of San Luis Obispo has identified th e
following conditions for the purpose of its election to no longer pay EPMC ;
•This benefit shall no longer apply to all employees of the Appointed Officials ,
Department Heads, and Management classifications .
•Zero percent of the normal contributions will be paid as EPMC, and the same zer o
percent (value) of compensation earnable {excluding Government Code Sectio n
20636(c)(4)} will be reported as additional compensation .
•The effective date of this Resolution shall be January 26, 2012 ;
NOW, THEREFORE, BE IT RESOLVED,that the Council of the City of San Lui s
Obispo hereby :
SECTION 1 .Elects to no longer pay or report the value of EPMC, as set forth above .
SECTION 2 .Directs that prior resolutions relating to management and appointed officia l
compensation and benefits are hereby superseded to the extent inconsistent with this resolution .
Upon motion of , seconded b y
, and on the following vote :
AYES :
NOES :
reports ()1 1 ,.,Managem t C i .in t
I t ,_ [tie ')_'~-nu _j.c, ren t
Resolution 201 2 ;°2I'11 .d?c
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ATTACHMENT 2
Page 2 of 2
ABSENT :
The foregoing resolution was adopted this 6th day of December, 2011 .
Mayor Jan Marx
ATTEST :
Elaina Cano
City Clerk
APPROVED AS TO FORM :
Richard C . Bolano s
Partner, Liebert Cassidy Whitmor e
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ATTACHMENT 3
CONTRACT OF EMPLOYMENT WITH KATIE E . LICHTI G
CITY MANAGE R
THIS CONTRACT is ent e red intoamended as of this 15th 6th day o fDecember,2009 2011by and between the CITY OF SAN LUIS OBISPO, State
of California (hereinafter referred to as "CITY"), and KATIE E . LICHTIG,a
contract employee (hereinafter referred to as " KATIE LICHTIG");
WITNESSETH :
WHEREAS, Charter Section 703 provides that the SAN LUIS OBISP O
CITY COUNCIL (hereinafter referred to as "COUNCIL") is responsible for th eappointment and removal of the CITY MANAGER, an d
WHEREAS, the COUNCIL, on behalf of the CITY acknowledges an d
accepts the responsibility for supervision of the CITY MANAGER ; an d
WHEREAS, the COUNCIL is desirous of appointing a CITY MANAGE R
and wishes to set the terms and conditions of said employment ; an d
WHEREAS, KATIE LICHTIG desires to accept the position of CIT Y
MANAGER consistent with certain terms and conditions of said employment, a sset forth in this CONTRACT .
NOW, THEREFORE, the parties do mutually agree as follows :
SectionI .Effective Date .
A.The appointment of KATIE LICHTIG is effective January 19, 2010 .
B.Nothing in this Contract shall prevent, limit or otherwise interfere wit h
the right of the COUNCIL to terminate the services of KATIE LICHTIG at an y
time, subject only to San Luis Obispo CITY Charter Section 709 and th e
provisions set forth in Section 13 of this Contract .
C.Nothing in this Contract shall prevent, limit or otherwise interfere wit h
the right of KATIE LICHTIG to resign at any time from her position with the CITY ,
subject only to the provision set forth in Section 14 of this Contract .
Section 2 .Duties and Salary .
A . CITY agrees to employ KATIE LICHTIG as full-time City Manager o f
the City to perform the functions and duties specified in the Charter an d
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CityMgrKLichtigContractAmended .doc
ATTACHMENT 3
Municipal Code and to perform such other legally permissible and proper dutie s
and functions as the COUNCIL may from time to time assign .
B.It is recognized KATIE LICHTIG is an exempt employee but i s
expected to engage in those hours of work that are necessary to fulfill th e
obligations of the City Manager's position . The parties acknowledge KATI E
LICHTIG will not regularly participate in a formal 9-80 work schedule as i s
provided to department heads and certain other City employees as part of th eCity's Trip Reduction Incentive Program . However, KATIE LICHTIG i s
authorized, with appropriate notification to Council, to from time to time modif y
her regular work schedule in order to take time off with pay while ensurin g
appropriate coverage of her duties as City Manager . Leave pursuant to thi s
provision shall not be used in lieu of vacation or administrative leave .
C.COUNCIL agrees to pay KATIE LICHTIG, for her services rendere d
pursuant hereto, a starting annual base salary of $221,500 payable i n
installments at the same time as the other management employees of the CIT Y
are paid . In addition, COUNCIL agrees to increase said base salary by the cost-
of-living adjustment approved by the COUNCIL for all CITY managemen t
employees under the Management Pay-for-Performance System (Resolution No .10036 (2008 Series) and any successors .
Section 3 .Benefits .
In addition to the salary set forth in Section 2 of this CONTRACT, KATI E
LICHTIG shall be entitled to the same benefits as those offered by the CITY t o
the CITY MANAGER, in accordance with Resolution No . 1-8036--(2808-Series),Resolution O'I10 (2003 Series),Resolution 8661 (1997 series) and successors .
Notwithstanding the above, KATIE LICHTIG shall be entitled to the followin g
leave benefits : An initial balance of 40 hours of sick leave and 40 hours o f
vacation leave ; and a vacation leave accrual rate of 160 hours per year in light o f
her past public sector service .
Section 4.Performance Evaluation .
A . By April 30, 2010, COUNCIL and KATIE LICHTIG shall establis h
mutually agreeable written goals, performance objectives, and priorities for th eperformance period ending March 30, 2011 . Further, Council shall conduct a n
"interim" evaluation by October 29, 2010 . An annual formal Council evaluatio n
will be conducted in March of 2011 in accordance with the City's Appointe d
Official Evaluation Process . Consistent with the schedule outlined above, base d
on the Appointed Officials Evaluation Process, and subject to performance a s
assessed by the COUNCIL, the CITY MANAGER compensation shall b e
reviewed by COUNCIL in April 2011 consistent with the Management Pay-for -
Performance System in place at that time .
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B . Each calendar year thereafter, COUNCIL shall review and evaluate th e
performance and compensation of KATIE LICHTIG in accordance with th e
adopted Appointed Officials Evaluation Process and adopted Management Pay-
for-Performance System, or any successor systems .
Section 5 .Outside Activities, Conduct and Behavior .
A.KATIE LICHTIG shall not engage in teaching, consulting or other non -
CITY connected business without the prior approval of COUNCIL .
B.KATIE LICHTIG shall comply with all local and state requirement s
regarding conflicts-of-interest .
Section 6 .Dues and Subscriptions .
COUNCIL agrees to budget for and to pay for professional dues an d
subscriptions of KATIE LICHTIG necessary for her continuation and ful l
participation in national, regional, state, and local associations, and organization s
necessary and desirable for her continued professional participation, growth, an d
advancement, and for the good of the CITY .
Section 7 .Professional Development.
A.COUNCIL hereby agrees to budget for and to pay for travel an d
subsistence expenses of KATIE LICHTIG for professional and official travel ,
meetings, and occasions adequate to continue the professional development o f
KATIE LICHTIG and to adequately pursue necessary official functions for th e
CITY, including but not limited to the League of California Cities Annua l
Conference, International City/County Managers' Association and such othe r
national, regional, state, and local governmental organizations, groups and/o r
committees .
B.COUNCIL also agrees to budget for and to pay for travel an d
subsistence expenses of KATIE LICHTIG for short courses, institutes, an d
seminars that are necessary for her professional development and for the goo d
of the CITY .
C.Other professional development may be agreed upon from time to tim e
between the COUNCIL and KATIE LICHTIG .
Section 8 .General Expenses .
COUNCIL recognizes that certain expenses of a non-personal and job -
affiliated nature are incurred by the CITY MANAGER, and hereby agrees t o
authorize the Finance Director to reimburse or to pay said general an d
reasonable expenses, consistent with CITY policies, upon receipt of dul y
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executed expense or petty cash vouchers, receipts, statements or persona l
affidavits .
Section 9 . Relocation Assistance .
A.The CITY shall pay or reimburse KATIE LICHTIG all reasonabl e
relocation expenses incurred in moving her residence and family from Lo s
Angeles County to the City of San Luis Obispo . These expenses shall be limite d
to the cost of packing, moving, and temporary storage of household furnishing s
and up to two house-hunting trips .
B.The CITY shall reimburse KATIE LICHTIG a monthly temporar y
housing rental expense not to exceed $2,500 per month to assist her whil e
relocating her personal residence to a new principal residence in San Lui s
Obispo . This allowance shall be made available only through July 31, 2010 .
C.The CITY shall make available a loan to KATIE LICHTIG, to assist wit h
the purchase of a principal residence within the corporate limits of the City of Sa n
Luis Obispo CITY and KATIE LICHTIG shall execute such notes, deeds of trust ,
escrow instructions, agreements and other documents as the City Attorney ma y
determine are reasonably necessary to effectuate this second mortgag e
assistance in a form mutually determined by the City Attorney and KATI E
LICHTIG and executed by the Mayor on behalf of CITY . The maximum amoun t
of such a loan shall not exceed $125,000 . The interest rate shall be variable ,
adjusted annually, and tied to the City's Local Agency Investment Fund rate . Th e
term of the loan shall be for ten years . Payments shall be amortized over 3 0
years . The loan shall be structured to allow for interest-only payments with a
balloon payment at the end of ten years . Rollover of existing equity in anothe r
residence shall not be required .
Section 10 .Indemnification .
In addition to that required under state and local law, CITY shall defend ,
save harmless, and indemnify KATIE LICHTIG against any claims, demands ,
causes of actions, losses, damages, expenses (including but not limited to
attorney's fees as may be authorized against public entities or officers consisten t
with state law) or liability of any kind whether stated in or arising from tort ,
professional liability or any other legal action or equitable theory, whethe r
groundless or otherwise arising out of an alleged act or omission occurring in th e
performance of KATIE LICHTIG'S duties as CITY MANAGER to the fullest exten t
permitted by law . CITY may compromise and settle any such claim or suit, an d
shall pay the amount of any settlement or judgment rendered thereon .
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Section 11 .Other Terms and Conditions of Employment .
The COUNCIL, in consultation with KATIE LICHTIG, shall fix any suc h
other terms and conditions of employment, as it may determine from time to time ,
relating to the performance of KATIE LICHTIG, provided such terms an d
conditions are not inconsistent with or in conflict with the provisions of thi s
CONTRACT, the CITY Charter or any other law .
Section 12 .No Reduction of Pay and/or Benefits .
COUNCIL shall not at any time during the term of this CONTRACT ,
reduce the salary, compensation or other financial benefits of KATIE LICHTIG ,
except to the degree of such a reduction across-the-board for all employees o f
the CITY .
Section 13 .Termination and Severance Pay .
A.In the event KATIE LICHTIG'S employment is terminated by th e
COUNCIL, or she resigns at the request of a majority of the COUNCIL durin g
such time that she is otherwise willing and able to perform the duties of CIT Y
MANAGER, the COUNCIL agrees to pay her a lump sum cash payment equal t o
nine (9) months compensation (salary and all appointed officials fringe benefits).
Additionally, CITY shall extend to KATIE LICHTIG the right to continue an d
purchase at her expense health insurance pursuant to the terms and condition o f
the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) or an y
successor legal requirement . KATIE LICHTIG is the City Manager for th e
purposes of the benefits under the California Joint Powers Insurance Authority o f
which the CITY is a member . Any associated severance benefit as a result of
termination shall be in accordance with the terms and conditions of the Californi a
Joint Powers Insurance Authority's Memorandum of Liability Coverage in effec t
at the time of termination .
B.In the event that KATIE LICHTIG is terminated for "good cause" th e
COUNCIL shall have no obligation to pay the lump sum severance paymen t
mentioned above . For the purpose of this CONTRACT, "good cause" shall mea n
any of the following :
(1)Malfeasance, dishonesty for personal gain, willful violation of law ,
corrupt misconduct, or conviction of any felony .
(2)Conviction of a misdemeanor arising directly out of KATIE LICHTIG's
duties pursuant to this Agreement .
(3)Willful abandonment of duties outlined in this Agreement .
"Good cause" shall not mean a mere loss of support or confidence by a
majority of the COUNCIL .
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C . Any termination of employment shall be done consistent with limitation s
established in the City Charter Section 709 . Additionally, the CITY shall provide a
minimum of 30 days prior written notice to KATIE LICHTIG of the intent t o
terminate this Agreement .
Section 14 .Resignation .
In the event KATIE LICHTIG voluntarily resigns her position with the CITY ,
she shall give the COUNCIL at least two (2) months advance written notice .
Section 15 .General Provisions .
A.The text herein shall constitute the entire CONTRACT between th e
parties .
B.This CONTRACT shall be binding upon and inure to the benefit of th e
heirs at law and executors of the parties .
C.It is the intent of the COUNCIL that this CONTRACT and th e
appointment of KATIE LICHTIG as CITY MANAGER are in accordance with th e
requirements and provisions of the Charter . Wherever possible, the provisions of
this CONTRACT shall be construed in a manner consistent with the Charter . If
any provision of this CONTRACT conflicts with the Charter, the Charter shal l
control .
D.If any provision, or any portion thereof, contained in this CONTRACT i s
held unconstitutional, invalid or unenforceable, the remainder of thi s
CONTRACT, or portion thereof, shall be deemed severable, shall not b e
affected, and shall remain in full force and effect .
IN WITNESS WHEREOF, CITY and EMPLOYEE have executed thi s
Contract on the day and year first set forth above .
KATIE E . LICHTIG DAT E
JAN MARX, MAYOR DAT E
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ATTEST :
ELAINA CANO DAT E
CITY CLER K
APPROVED AS TO FORM :
RICHARD C . BOLANOS
PARTNER, LIEBERT CASSIDY WHITMOR E
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CONTRACT OF EMPLOYMENT WITH J . CHRISTINE DIETRIC K
CITY ATTORNEY
THIS CONTRACT is e n tered intoamended this 15th 6th day of December ,
2009 2011by and between the CITY OF SAN LUIS OBISPO, State of Californi a
(hereinafter referred to as "CITY"), and J . CHRISTINE DIETRICK, a contrac t
employee (hereinafter referred to as " CHRISTINE DIETRICK");
WITNESSETH :
WHEREAS, Charter Section 703 provides that the SAN LUIS OBISP O
CITY COUNCIL (hereinafter referred to as "COUNCIL") is responsible for th e
appointment and removal of the CITY ATTORNEY, an d
WHEREAS, the COUNCIL, on behalf of the CITY acknowledges an d
accepts the responsibility for supervision of the CITY ATTORNEY ; an d
WHEREAS, the COUNCIL is desirous of appointing a CITY ATTORNE Y
and wishes to set the terms and conditions of said employment ; and
WHEREAS, CHRISTINE DIETRICK desires to accept the position of CIT Y
ATTORNEY consistent with certain terms and conditions of said employment, a s
set forth in this CONTRACT .
NOW, THEREFORE, the parties do mutually agree as follows :
Section 1 .Effective Date .
A.The appointment of CHRISTINE DIETRICK is effective January 1 ,
2010 .
B.Nothing in this Contract shall prevent, limit or otherwise interfere wit h
the right of the COUNCIL to terminate the services of CHRISTINE DIETRICK a t
any time, subject only to San Luis Obispo CITY Charter Section 709 and th e
provisions set forth in Section 12 of this Contract .
C.Nothing in this Contract shall prevent, limit or otherwise interfere wit h
the right of CHRISTINE DIETRICK to resign at any time from her position wit h
the CITY, subject only to the provision set forth in Section 13 of this Contract .
Section 2 .Duties and Salary .
A . CITY agrees to employ CHRISTINE DIETRICK as full-time CIT Y
ATTORNEY of the City to perform the functions and duties specified in th e
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Charter and Municipal Code and to perform such other legally permissible an d
proper duties and functions as the COUNCIL may from time to time assign .
B . COUNCIL agrees to pay CHRISTINE DIETRICK, for her service s
rendered pursuant hereto, a starting annual base salary of $155,000 payable i n
installments at the same time as the other management employees of the CIT Y
are paid . In addition, COUNCIL agrees to increase said base salary by the cost-
of-living adjustment approved by the COUNCIL for all CITY managemen t
employees under the Management Pay-for-Performance System (Resolution No .
10036 (2008 Series) and any successors .
Section 3 .Benefits .
In addition to the salary set forth in Section 2 of this CONTRACT ,
CHRISTINE DIETRICK shall be entitled to a car allowance of $250 per month,a
City contribution of 3 .5% of salary to a 401(a) supplemental retirement plan an d
the same benefits as those offered by the CITY to the CITY ATTORNEY, i n
accordance with Resolution No . -1-0436-(2-048-Series) and successors .
Section 4 .Performance Evaluation .
A.By April 30, 2010, COUNCIL and CHRISTINE DIETRICK shal l
establish mutually agreeable written goals, performance objectives, and prioritie s
for the performance period ending March 30, 2011 . Further, Council shal l
conduct an "interim" evaluation by October 29, 2010 . An annual formal Counci l
evaluation will be conducted in March of 2011 in accordance with the City's
Appointed Official Evaluation Process . Consistent with the schedule outline d
above, based on the Appointed Officials Evaluation Process, and subject t o
performance as assessed by the COUNCIL, the CITY ATTORNEY compensatio n
shall be reviewed by COUNCIL in April 2011 consistent with the Managemen t
Pay-for-Performance System in place at that time .
B.Each calendar year thereafter, COUNCIL shall review and evaluate th e
performance and compensation of CHRISTINE DIETRICK in accordance wit h
the adopted Appointed Officials Evaluation Process and adopted Managemen t
Pay-for-Performance System, or any successor systems .
Section 5 .Outside Activities, Conduct and Behavior .
A.CHRISTINE DIETRICK shall not engage in teaching, consulting o r
other non-CITY connected business without the prior approval of COUNCIL .
B.CHRISTINE DIETRICK shall comply with all local and stat e
requirements regarding conflicts-of-interest .
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Section 6 .Dues and Subscriptions .
COUNCIL agrees to budget for and to pay for professional dues an d
subscriptions of CHRISTINE DIETRICK necessary for her continuation and ful l
participation in national, regional, state, and local associations, and organization s
necessary and desirable for her continued professional participation, growth, an d
advancement, and for the good of the CITY .
Section7 .Professional Development.
A.COUNCIL hereby agrees to budget for and to pay for travel an d
subsistence expenses of CHRISTINE DIETRICK for professional and officia l
travel, meetings, and occasions adequate to continue the professiona l
development of CHRISTINE DIETRICK and to adequately pursue necessar y
official functions for the CITY, including but not limited to the League of Californi a
Cities Annual Conference, League of California Cities City Attorneys Departmen t
Conference, and such other national, regional, state, and local governmenta l
organizations, groups and/or committees .
B.COUNCIL also agrees to budget for and to pay for travel an d
subsistence expenses of CHRISTINE DIETRICK for short courses, institutes ,
and seminars that are necessary for her professional development and for th e
good of the CITY .
C.Other professional development may be agreed upon from time to tim e
between the COUNCIL and CHRISTINE DIETRICK .
Section 8 .General Expenses .
COUNCIL recognizes that certain expenses of a non-personal and job -
affiliated nature are incurred by the CITY ATTORNEY, and hereby agrees t o
authorize the Finance Director to reimburse or to pay said general an d
reasonable expenses, consistent with CITY policies, upon receipt of dul y
executed expense or petty cash vouchers, receipts, statements or persona l
affidavits .
Section 9 .Indemnification .
In addition to that required under state and local law, CITY shall defend ,
save harmless, and indemnify CHRISTINE DIETRICK against any claims ,
demands, causes of actions, losses, damages, expenses (including but no t
limited to attorney's fees as may be authorized against public entities or officer s
consistent with state law) or liability of any kind whether stated in or arising fro m
tort, professional liability or any other legal action or equitable theory, whethe r
groundless or otherwise arising out of an alleged act or omission occurring in th e
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performance of CHRISTINE DIETRICK'S duties as CITY ATTORNEY to th e
fullest extent permitted by law . CITY may compromise and settle any such clai m
or suit, and shall pay the amount of any settlement or judgment rendere d
thereon .
Section 10 .Other Terms and Conditions of Employment .
The COUNCIL, in consultation with CHRISTINE DIETRICK, shall fix an y
such other terms and conditions of employment, as it may determine from time t o
time, relating to the performance of CHRISTINE DIETRICK, provided such term s
and conditions are not inconsistent with or in conflict with the provisions of thi s
CONTRACT, the CITY Charter or any other law .
Section 11 .No Reduction of Pay and/or Benefits .
COUNCIL shall not at any time during the term of this CONTRACT ,
reduce the salary, compensation or other financial benefits of CHRISTIN E
DIETRICK, except to the degree of such a reduction across-the-board for al l
employees of the CITY .
Section 12 .Termination and Severance Pay .
A.In the event CHRISTINE DIETRICK'S employment is terminated by th e
COUNCIL, or she resigns at the request of a majority of the COUNCIL durin g
such time that she is otherwise willing and able to perform the duties of CIT Y
ATTORNEY, the COUNCIL agrees to pay her a lump sum cash payment equa l
to nine (9) months compensation (salary and all appointed officials fring e
benefits). Additionally, CITY shall extend to CHRISTINE DIETRICK the right t o
continue and purchase at her expense health insurance pursuant to the term s
and condition of the Consolidated Omnibus Budget Reconciliation Act of 198 6
(COBRA) or any successor legal requirement . CHRISTINE DIETRICK is th e
CITY ATTORNEY for the purposes of the benefits under the California Join t
Powers Insurance Authority of which the CITY is a member . Any associate d
severance benefit as a result of termination shall be in accordance with the term s
and conditions of the California Joint Powers Insurance Authority's Memorandu m
of Liability Coverage in effect at the time of termination .
B.In the event that CHRISTINE DIETRICK is terminated for "good cause "
the COUNCIL shall have no obligation to pay the lump sum severance paymen t
mentioned above . For the purpose of this CONTRACT, "good cause" shall mea n
any of the following :
(1)Malfeasance, dishonesty for personal gain, willful violation of law ,
corrupt misconduct, or conviction of any felony .
(2)Conviction of a misdemeanor arising directly out of CHRISTIN E
DIETRICK's duties pursuant to this Agreement .
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(3) Willful abandonment of duties outlined in this Agreement .
"Good cause" shall not mean a mere loss of support or confidence by amajority of the COUNCIL .
C . Any termination of employment shall be done consistent with limitation sestablished in the City Charter Section 709 . Additionally, the CITY shall provide aminimum of 30 days prior written notice to CHRISTINE DIETRICK of the intent t oterminate this Agreement .
Section 13 .Resignation .
In the event CHRISTINE DIETRICK voluntarily resigns her position wit hthe CITY, she shall give the COUNCIL at least two (2) months advance writte nnotice.
Section 14 .General Provisions .
A.The text herein shall constitute the entire CONTRACT between th eparties.
B.This CONTRACT shall be binding upon and inure to the benefit of th eheirs at law and executors of the parties .
C.It is the intent of the COUNCIL that this CONTRACT and th eappointment of CHRISTINE DIETRICK as CITY ATTORNEY are in accordanc ewith the requirements and provisions of the Charter . Wherever possible, th eprovisions of this CONTRACT shall be construed in a manner consistent with th eCharter. If any provision of this CONTRACT conflicts with the Charter, th eCharter shall control .
D.If any provision, or any portion thereof, contained in this CONTRACT i sheld unconstitutional, invalid or unenforceable, the remainder of thi sCONTRACT, or portion thereof, shall be deemed severable, shall not b eaffected, and shall remain in full force and effect .
IN WITNESS WHEREOF, CITY and EMPLOYEE have executed thi sContract on the da and year first set forth above .
//lot//4.6 //DATJ. CHRISTINE DIETRIC K
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5
ATTACHMENT 4
JAN MARX, MAYOR DAT E
ATTEST :
ELAINA CANO DAT E
CITY CLER K
APPROVED AS TO FORM :
RICHARD C . BOLANO S
PARTNER, LIEBERT CASSIDY WHITMOR E
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