HomeMy WebLinkAbout09-19-2017 Item 14 - Appointment of City Manager Meeting Date: 9/19/2017
FROM: Heidi Harmon, Mayor
Prepared By: Monica Irons, Director of Human Resources
SUBJECT: APPROVAL OF CITY MANAGER CONTRACT AND APPOINTMENT OF
CITY MANAGER
RECOMMENDATION
1. Approve contract of employment with Mr. Derek Johnson and authorize the Mayor to sign;
and
2. Appoint Derek J. Johnson as City Manager.
DISCUSSION
On August 7, 2017 City Manager Katie Lichtig announced her intent to join the City of Santa
Monica as the Chief Operating Officer/Assistant City Manager and resign from the City of San
Luis Obispo effective September 29, 2017. Lichtig has been the City Manager since January
2010.
On August 15, 2017 Council met in closed session and provided unanimous direction to proceed
with an assessment of the skills and fit of Derek J. Johnson, Assistant City Manager, for the
positon of City Manager. Council carefully weighed the options of focusing their search for a
City Manager within the City organization or broadening it to a national search. They expressed
appreciation for the proactive investment in succession planning, a desire for a seamless
transition, and a hope that the positive momentum on many fronts would continue under the
leadership of the next City Manager. A brief survey was distributed to City employees and
community members with results provided to Council in preparation for their assessment of Mr.
Johnson.
On September 6, 2017 Council thoroughly evaluated Mr. Johnson’s qualifications, skills,
abilities, and fit as the next City Manager. Mr. Johnson holds a Bachelor of Arts in
Environmental Studies from the University of California Santa Barbara and has spent the last
twenty plus years leading organizations, large and small, including experience in the public, non-
profit, and private sectors. Mr. Johnson served as the General Manager of the Isla Vista
Recreation and Park District for 10 years, as the Director of Long Range Planning for the County
of Santa Barbara, and as the Community Development Department Director/Deputy Director
RDA for the City of Capitola prior to joining the City of San Luis Obispo. He was the
Community Development Department Director for four years before transitioning to the position
of Assistant City Manager in 2015. He also served as the Interim Director of Finance and
Information Technology for almost a year. Mr. Johnson’s extensive executive leadership, vision
and practical experience in areas such as planning and community-engagement were particularly
appealing to Council and resulted in them unanimously and enthusiastically supporting his
appointment as City Manager.
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Terms and Conditions of the Employment Contract
On September 6, 2017 Council also directed a contract of employment be negotiated with Mr.
Johnson. The Contract of Employment (Attachment A) sets forth the complete terms and
conditions of the City Manager appointment. In considering appropriate compensation for the
position, Council considered the highly complex nature of the job that requires development and
implementation of an approximately $142 million budget, supervision of nine department heads,
management of an organization with over 400 employees with four represented employee
associations/unions, and “full service City” responsibilities (police, fire, public works, parks &
recreation, water, and wastewater services). Council considered compensation data for
comparison agencies (those similar in population, city services, coastal or close proximity,
proximity to a major college or university, tourism is an important part of the agency’s economy)
that indicated a median city manager salary of approximately $224,000, as well as local city
manager data. The City Manager contract includes the following key components:
1. Annual salary of $209,900.
2. Health and other benefits consistently granted appointed officials. Given Mr. Johnson
was a department head with the City, health, life, disability, and paid time off benefits
remain the same.
3. A severance benefit of six months’ pay and fringe benefits consistent with industry
standards.
Next Steps
Following approval of the contract of employment, Mr. Johnson will be sworn in as City
Manager on Friday, September 29, 2017 to ensure a smooth transition following Ms. Lichtig’s
departure. A formal community swearing-in is planned for the City Council meeting of October
3, 2017 at 6:00 p.m.
FISCAL IMPACT
This action will result in a positive fiscal impact of this appointment as the overall cost of the
salary and benefits package will be less than what is currently budgeted.
Attachments:
a - City Manager Contract of Employment
b - Exhibit A - General Release
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CONTRACT OF EMPLOYMENT WITH DEREK J. JOHNSON
CITY MANAGER
THIS CONTRACT is entered into as of this _____ day of ________, 2017
by and between the CITY OF SAN LUIS OBISPO, State of California (hereinafter
referred to as "CITY"), and DEREK J. JOHNSON, a contract employee
(hereinafter referred to as " DEREK J. JOHNSON”);
WITNESSETH:
WHEREAS, Charter Section 703 provides that the SAN LUIS OBISPO
CITY COUNCIL (hereinafter referred to as “COUNCIL”) is responsible for the
appointment and removal of the CITY MANAGER, and
WHEREAS, the COUNCIL, on behalf of the CITY acknowledges and
accepts the responsibility for supervision of the CITY MANAGER; and
WHEREAS, the COUNCIL wishes to appoint a CITY MANAGER and to
set the terms and conditions of said employment; and
WHEREAS, DEREK J. JOHNSON desires to accept the position of CITY
MANAGER consistent with certain terms and conditions of said employment, as
set forth in this CONTRACT.
NOW, THEREFORE, the parties do mutually agree as follows:
Section 1. Effective Date.
A. The appointment of DEREK J. JOHNSON is effective September
29, 2017.
B. Nothing in this Contract shall prevent, limit or otherwise interfere
with the right of the COUNCIL to terminate the services of DEREK J. JOHNSON
at any time, subject only to San Luis Obispo CITY Charter Section 709 and the
provisions set forth in Section 12 of this Contract.
C. Nothing in this Contract shall prevent, limit or otherwise interfere
with the right of DEREK J. JOHNSON to resign at any time from his position with
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 DEREK J. JOHNSON as full-time City
Manager of the City to perform the functions and duties specified in the Charter
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and Municipal Code and to perform such other legally permissible and proper
duties and functions as the COUNCIL may from time to time assign.
B. It is recognized DEREK J. JOHNSON is an exempt employee but is
expected to engage in those hours of work that are necessary to fulfill the
obligations of the City Manager’s position. The parties acknowledge DEREK J.
JOHNSON will not regularly participate in a formal 9-80 work schedule as is
provided to department heads and certain other City employees as part of the
City’s Trip Reduction Incentive Program. However, DEREK J. JOHNSON is
authorized, with appropriate notification to Council, to from time to time modify
his regular work schedule in order to take time off with pay while ensuring
appropriate coverage of his duties as City Manager. Leave pursuant to this
provision shall not be used in lieu of vacation or administrative leave.
C. COUNCIL agrees to pay DEREK J. JOHNSON, for his services
rendered pursuant hereto, a starting annual base salary of $209,900 payable in
installments at the same time as the other management employees of the CITY
are paid. In addition, COUNCIL agrees to increase said base salary by the cost-
of-living adjustment approved by the COUNCIL for all CITY management
employees under any successor Management Compensation Resolutions.
Section 3. Benefits.
A. In addition to the salary set forth in Section 2 of this CONTRACT,
DEREK J. JOHNSON shall be entitled to the same benefits as those offered by
the CITY to the CITY MANAGER, in accordance with the Resolution 10785
(2017 Series), Resolution 8661 (1997 series) and any successors.
B. DEREK J. JOHNSON hereby agrees that his monthly car allowance
will be as provided in Resolution 10630 (2015 Series).
Section 4. Performance Evaluation.
A. Upon appointment to the position of City Manager DEREK J.
JOHNSON will assume the goals established by Council for the former City
Manager until such time as DEREK J. JOHNSON and Council mutually agree on
new goals. On or before January 31, 2018, Council will provide feedback to
DEREK J. JOHNSON on performance to goals and expectations. Further,
Council shall conduct an “interim” evaluation by March 30, 2018. An annual
formal Council evaluation will be conducted in March of 201 9 in accordance with
the City’s Appointed Official Evaluation Process. Consistent with the schedule
outlined above, based on the Appointed Officials Evaluation Process, and subject
to performance as assessed by the COUNCIL, the CITY MANAGER
compensation shall be reviewed by COUNCIL no later than April 2019.
B. Each calendar year thereafter, COUNCIL shall review and evaluate
the performance and compensation of DEREK J. JOHNSON in accordance with
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the adopted Appointed Officials Evaluation Process, best management practices,
and informed by comparison agency data.
Section 5. Outside Activities, Conduct and Behavior.
A. DEREK J. JOHNSON shall not engage in teaching, consulting or
other non-CITY connected business without the prior approval of COUNCIL.
B. DEREK J. JOHNSON shall comply with all local and state
requirements regarding conflicts-of-interest.
Section 6. Dues and Subscriptions.
COUNCIL agrees to budget for and to pay for professional dues and
subscriptions of DEREK J. JOHNSON necessary for his continuation and full
participation in national, regional, state, and local associations, and organizations
necessary and desirable for his continued professional participation, growth, and
advancement, and for the good of the CITY.
Section 7. Professional Development.
A. COUNCIL hereby agrees to budget for and to pay for travel and
subsistence expenses of DEREK J. JOHNSON for professional and official
travel, meetings, and occasions adequate to continue the professional
development of DEREK J. JOHNSON and to adequately pursue necessary
official functions for the CITY, including but not limited to the League of California
Cities meetings and conferences, International City/County Managers’
Association and such other national, regional, state, and local governmental
organizations, groups and/or committees.
B. COUNCIL also agrees to budget for and to pay for travel and
subsistence expenses of DEREK J. JOHNSON for short courses, institutes, and
seminars that are necessary for his professional development and for the good of
the CITY.
C. Other professional development may be agreed upon from time to time
between the COUNCIL and DEREK J. JOHNSON.
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 to
authorize the Finance Director to reimburse or to pay said general and
reasonable expenses, consistent with CITY policies, upon receipt of duly
executed expense or petty cash vouchers, receipts, statements or personal
affidavits.
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Section 9. Indemnification.
In addition to that required under state and local law, CITY shall defend,
save harmless, and indemnify DEREK J. JOHNSON 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
consistent 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, whether
groundless or otherwise arising out of an alleged act or omission occurring in the
performance of DEREK J. JOHNSON’S duties as CITY MANAGER to the fullest
extent permitted by law. CITY may compromise and settle any such claim or
suit, and shall pay the amount of any settlement or judgment rendered t hereon.
Section 10. Other Terms and Conditions of Employment.
The COUNCIL, in consultation with DEREK J. JOHNSON, shall fix any
such other terms and conditions of employment, as it may determine from time to
time, relating to the performance of DEREK J. JOHNSON, provided such terms
and conditions are not inconsistent with or in conflict with the provisions of this
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 DEREK J.
JOHNSON, except to the degree of such a reduction across-the-board for all
employees of the CITY or DEREK J. JOHNSON provides written consent to the
reduction.
Section 12. Termination and Severance Pay.
A. In the event DEREK J. JOHNSON’S employment is terminated by
the COUNCIL without cause, or he resigns at the request of a majority of the
COUNCIL during such time that he is otherwise willing and able to perform the
duties of CITY MANAGER, and if DEREK J. JOHNSON signs, delivers to the
City Council, and does not revoke, the General Release Agreement in the form
attached hereto as Exhibit A, the COUNCIL agrees to pay him a lump sum cash
payment equal to six (6) months compensation. For the purposes of this clause
“compensation” shall include base salary, car allowance, City contribution to
deferred compensation, and City contribution to health insurance at time of
separation as well as cash out of accrued Administrative Leave and cash out of a
portion of accrued sick leave as if CITY MANAGER was retiring as provided in
the Management Compensation Resolution 10785 (2017 Series) and any
successors.
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B. In the event that DEREK J. JOHNSON is terminated for “good
cause” the COUNCIL shall have no obligation to pay the lump sum severance
payment mentioned above. For the purpose of this CONTRACT, “good cause”
shall mean 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 DEREK J.
JOHNSON’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.
C. Any termination of employment shall be done consistent with
limitations established in the City Charter Section 709. Additionally, the CITY
shall provide a minimum of 30 days prior written notice to DEREK J. JOHNSON
of the intent to terminate this Agreement.
D. In the event the CITY terminates the CITY MANAGER for any reason
or no reason, the CITY and the CITY MANAGER agree that no member of the
COUNCIL, the City Management staff, nor the CITY MANAGER, shall make any
written, oral or electronic statement to any member of the public, the press, or
any city employee concerning the CITY MANAGER’S termination except in the
form of a joint press release or statement, the content of which is mutually
agreeable to the City and the CITY MANAGER. The joint press release or
statement shall not contain any text or information that is disparaging to either
party. Either party may verbally repeat the substance of the joint press release
or statement in response to an inquiry. Nothing herein shall be construed to
prevent the City from referring to or responding to inquiries about third party or
outside agency investigations or actions pertaining to the official performance of
the CITY MANAGER.
Section 13. Resignation.
In the event DEREK J. JOHNSON voluntarily resigns his position with the
CITY, he shall give the COUNCIL at least 45 days advance written notice.
Section 14. General Provisions.
A. The text herein shall constitute the entire CONTRACT between the
parties.
B. This CONTRACT shall be binding upon and inure to the benefit of
the heirs at law and executors of the parties.
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C. It is the intent of the COUNCIL that this CONTRACT and the
appointment of DEREK J. JOHNSON as CITY MANAGER are in accordance
with the requirements and provisions of the Charter. W herever 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 shall control.
D. If any provision, or any portion thereof, contained in this
CONTRACT is held unconstitutional, invalid or unenforceable, the remainder of
this CONTRACT, or portion thereof, shall be deemed severable, shall not be
affected, and shall remain in full force and effect.
IN WITNESS W HEREOF, CITY and EMPLOYEE have executed this
Contract on the day and year first set forth above.
_____________________________ _______________
DEREK J. JOHNSON DATE
_____________________________ ________________
HEIDI HARMON, MAYOR DATE
ATTEST:
____________________________ ________________
CARRIE GALLAGHER DATE
CITY CLERK
APPROVED AS TO FORM:
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__________________________________
J. CHRISTINE DIETRICK
CITY ATTORNEY
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GENERAL RELEASE AGREEMENT
This GENERAL RELEASE AGREEMENT (“RELEASE AGREEMENT”) is entered into by and
between ("CITY MANAGER") and CITY OF SAN LUIS OBISPO
(“CITY"), in light of the following facts:
MANAGER’S employment with CITY concluded on ___________________.
Certain disputes have arisen between CITY and CITY MANAGER.
CITY and CITY MANAGER each deny any liability whatsoever to the other.
CITY and CITY MANAGER wish to fully and finally resolve any and all disputes they may have
with each other.
CITY MANAGER is hereby informed that he/she has twenty-one (21) days from receipt of this
Agreement to consider it. CITY hereby advises CITY MANAGER to consult with his/her legal
counsel before signing this Agreement._________(initial)
CITY MANAGER acknowledges that for a period of seven (7) days following the signing of this
Agreement ("Revocation Period"), he/she may revoke the Agreement. This Agreement shall
not become effective or enforceable until the day following the expiration of the Revocation
Period. ______(initial)
CITY MANAGER acknowledges that the Salary Payment referenced in paragraph
1 of this Agreement represents all compensation, including salary, accrued benefit balances
and reimbursed expenses, due and payable to him/her through the date of employment
termination. CITY MANAGER also acknowledges that CITY has made this Salary Payment
without regard to whether he/she signs this Agreement. The Salary Payment does not constitute
consideration for this Agreement.
Section 1. Receipt of Salary Payment. CITY MANAGER hereby acknowledges receipt of a
check or checks for all compensation owing to him/her, including salary, accrued benefit balances
and reimbursed expenses ("Salary Payment") from CITY.
Section 2. Severance. Within five (5) days following CITY MANAGER’S signing, delivering to the
CITY, and following the expiration of the revocation period set forth in this Agreement, CITY
shall pay CITY MANAGER the gross amount provided for in Section 12.A. of the attached
Contract of Employment, less applicable deductions consistent with customary City payroll
practices. CITY MANAGER acknowledges that the Severance is in excess of all amounts due
and owing him as a result of his employment by CITY.
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Section 3. General Release. In consideration of the Severance to be paid and provided to
CITY MANAGER, and other good and valuable consideration, CITY MANAGER hereby
releases and discharges CITY and its past and present CITY Council Members, employees,
representatives and agents, except as to claims that cannot be released under applicable law ,
from all rights, claims, causes of action, and damages, both known and unknown, in law or in
equity, concerning and/or arising out of his/her employment by CITY which he/she now has, or
ever had, including but not limited to any rights, claims, causes of action or damages arising
under Title VII of the Civil Rights Act of 1964, the Vocational Rehabilitation Act of 1973, the
Employee Retirement Income Security Act, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, the Older Workers Benefits Protection Act, the Family and
Medical Leave Act of 1993, the Domestic Partners Act of 2003, the California Labor Code, the
Private Attorneys General Act of 2004, the California Moore-Brown-Roberti Family Rights Act,
the California Unruh Civil Rights Act, the California Fair Employment and Housing Act, any
other federal, state, or local employment practice legislation, or any federal or state common
law, including wrongful discharge, breach of express or implied contract, or action in violation of
public policy.
CITY MANAGER hereby waives and relinquishes all rights and benefits afforded by Section
1542 of the Civil Code of California. CITY MANAGER understands and acknowledges the
significance and consequences of this specific waiver of Section 1542. Section 1542 of the
Civil Code of California states as follows:
"A general release does not extend to claims which the creditor does not know or suspect to exist
in his or her favor at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor."
Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full
and complete release and discharge of CITY and its past and present CITY Council Members,
employees, representatives and agents, CITY MANAGER expressly acknowledges that this
General Release is intended to include in its effect, without limitation, all claims which he/she
does not know or suspect to exist in his/her favor. ________(initial)
CITY MANAGER further acknowledges that he/she has read this General Release and that
he/she understands that this is a general release, which shall apply to all unknown or
unanticipated results of the transactions and occurrences described above, as well as those
known and anticipated, and that he/she intends to be legally bound by the same.
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Section 4. Fees and Costs. CITY MANAGER and CITY agree that in the event of litigation
relating to this Release Agreement, the prevailing party shall be entitled to recover
his/her/its reasonable attorneys' fees and costs.
IN WITNESS WHEREOF, CITY and EMPLOYEE have executed this RELEASE
AGREEMENT on the day and year first set forth below.
_____________________________ _______________
CITY MANAGER DATE
_____________________________ ________________
MAYOR DATE
ATTEST:
____________________________ ________________
CITY CLERK DATE
APPROVED AS TO FORM:
__________________________________
CITY ATTORNEY
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City Manager Employment ContractMonica Irons, Human Resources DirectorSeptember 19, 201709-19-2017, Item 14 - Staff Presentation
Recommendation Approve Contract of Employment with Derek JohnsonAppoint Derek Johnson as City Manager effective September 29, 2017City of SLO Assistant City Manager since 2015City of SLO Community Development Department Director 2011 – 2015Other public sector leadership positions include: City of Capitola CDD DirectorCounty of Santa Barbara Director of Long Range PlanningIsla Vista Parks and Recreation District General Manager09-19-2017, Item 14 - Staff Presentation
Overview of Employment ContractSalary: $209,900 annuallyHealth, Life, Disability, Retirement, and Paid Time Off: No change; same as Department HeadsPerformance Evaluated by Council annually in AprilSeverance:If Council terminates City Manager without cause or requests resignation.Six months salary and benefits, with signed release of claims.09-19-2017, Item 14 - Staff Presentation
Fiscal Impact & Next StepsPositive fiscal impact as the cost of the proposed salary and benefits are lower than that of the current City Manager. Authorize Mayor to execute agreementSwearing in by City Clerk on September 29thto ensure seamless transitionOfficial swearing in at October 3rdCity Council Meeting09-19-2017, Item 14 - Staff Presentation
Questions09-19-2017, Item 14 - Staff Presentation