HomeMy WebLinkAbout07-17-2018 Item 2 - Adjustments to Compensation Unrepresented
Meeting Date: 7/17/2018
FROM: Monica Irons, Director of Human Resources
Prepared By: Nickole Sutter, Human Resources Analyst II
SUBJECT: ADJUSTMENTS TO THE COMPENSATION OF THE UNREPRESENTED
MANAGEMENT EMPLOYEES INCLUDING APPOINTED OFFICIALS
EVALUATIONS
RECOMMENDATION
1. Adopt a resolution with a three-year term (July 1, 2018 through June 30, 2021) adjusting the
compensation of the Unrepresented Management Employees (Attachments A & B).
2. Adopt two resolutions approving amendments to the City Attorney and City Manager’s
contracts (Attachments C - F).
DISCUSSION
Background
The unrepresented management group includes 89 employees: two appointed officials (City
Manager and City Attorney), nine department heads, and 78 other management employees.
These are professional-level employees, exempt from the overtime provisions of the Federal
Labor Standards Act (FLSA), including first-line supervisors, program managers, senior planners
and engineers, analysts, and other professionals. The compensation and benefits of unrepresented
management employees are set by resolution adopted by Council and the current resolution
expired on June 30, 2018. At the expiration of a resolution, the terms and conditions remain the
same until a subsequent resolution is adopted.
Because the two appointed officials serve at the will of the Council, employment contracts are
established that incorporate the Management Resolution. Each year, the performance of the
appointed officials is evaluated, and Council considers changes to their compensation. The
process is facilitated by a consultant who collects input on the appointed officials’ performance
in the areas of Council-City Manager or Council-City Attorney relationship, legal advocacy
(City Attorney only), leadership, community relations, financial management (City Manager
only), and progress to major goals. Council also reviews and approves goals for each appointed
official during this annual process.
Council met with the consultant in closed session on March 21, 2018 to discuss the appointed
officials’ performance and compensation. Council concluded the appointed officials had met or
exceeded performance expectations and accomplished the 2017-18 goals provided by Council.
Both appointed officials remain sensitive to the fiscal health of the organization and anticipated
discussions with the management group to meet the financial objective of the Fiscal Health
Response Plan (FHRP). Therefore, no compensation or benefit changes were proposed with the
performance evaluation other than aligning the City Manager’s ability to cash out vacation at the
end of the fiscal year with that of the City Attorney. The City Attorney’s contract includes the
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ability to cash out up to three weeks of vacation. Considering the City Manager and City
Attorney’s level in the organization, demands placed on them, and commitment to City priorities,
it is reasonable to allow the requested vacation cash out for the City Manager that aligns with
that of the City Attorney.
Framing the Recommendation for a Successor Management Resolution
Management employees are unrepresented, which means there are no formal negotiations, as
there are for other regular employees. The group met twice in May to form a recommendation
consistent with Council’s adopted Labor Relations Objectives (LROs) (Attachment G) and the
Fiscal Health Response Plan (FHRP). The FHRP, adopted by Council April 17, 2018, outlines
actions during the next three fiscal years (2018-19 through 2020-21) aimed at closing an
approximate $8.9 million budget gap due to CalPERS discount rate reduction, resulting in
increasing retirement costs to agencies. The FHRP anticipates employee concessions (anticipated
growth of employee wages and benefits at a rate less than inflation) equaling $1.9 million by
fiscal year 2020-21. The City’s focus and primary interests included achieving a three-year
agreement that provides certainty around compensation costs during the FHRP term, increases
employee contributions to retirement costs, and maintains competitive wages and benefits to
support recruitment and retention objectives.
The agreement includes modest cost of living increases (COLAs), which are partially offset
through increased retirement cost-sharing. This group last received a 2% COLA in January 2016
and a one-time lump-sum payment of $2,000 in April 2017 in lieu of a 2% COLA that other
represented employee groups received. These disparities in the sequence and amount of cost of
living increases can cause compaction between unrepresented management and represented
employees. A high-level review of this indicated a potential compaction issue between the
Police Chief and subordinate classification, Police Captain, when taking into consideration a
contractual cost of living increase of two percent (2%) in July 2018 and other differences in
benefits. An adjustment to the Police Chief salary range is therefore proposed to address the
compaction and aid in recruitment and retention.
Key Components of Unrepresented Management Resolution
The following is a summary of the key changes included in the Resolution:
1. Term of Resolution. July 1, 2018 to June 30, 2021
2. Cost of Living Adjustments. The COLA in 2018 is offset by the elimination of the
City’s one percent deferred compensation contribution. The 2019 and 2020 COLAs are
partially offset by PERS retirement cost-sharing and are in line with the FHRP and
Council’s LROs.
• 1% COLA August 2018; 1% City contribution to deferred compensation
eliminated.
• 2% COLA July 2019; Employee contribution to CalPERS increased by 1.5%
• 2% COLA July 2020; Employee contribution to CalPERS increased by an
additional 1.5%
3. Eliminate One Percent City Deferred Compensation Contribution. In August 2018,
the City will eliminate a one percent (1%) of salary employer contribution to a deferred
compensation plan.
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4. CalPERS Retirement Cost-Sharing. As indicated in the table below, all unrepresented
management employees will pay three percent (3%) more toward retirement costs. By
July 2020, management employees will be contributing between 56% and 74% of the
total normal cost of retirement (the amount needed to ensure current contributions fully
fund future benefits), exceeding the 50% requirement established for employees new to
CalPERS by the Public Employees’ Pension Reform Act (PEPRA).
5. Health Insurance Cost-Sharing. Maintain the current cost-sharing arrangement that
increases the City contribution by 50% of the average percent increase in CalPERS
medical premiums (For example, if the CalPERS medical premiums increase ten percent
(10%), the City contribution would increase five percent (5%), while employees would
absorb the remainder of the increased cost).
6. Increase the Police Chief Salary Range. The Police Chief’s direct reports are Police
Captains represented by the San Luis Obispo Police Staff Officers’ Association
(SLOPSOA). That bargaining unit has a scheduled two percent (2%) cost of living
increase in July 2018 pursuant to the terms of that group’s current four-year contract,
negotiated in 2015. That increase, along with differences in health and retirement
contributions, results in compaction between the Chief and Captain’s total compensation.
In order to address recruitment and retention in this area that is challenging not only for
the City but throughout the State and nation, staff recommends increasing the salary
range by seven percent (7%) effective August 2018. This adjustment does not
automatically result in an increase in salary of the incumbent but provides for increases
per the City’s pay for performance program.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this
report, because the action does not constitute a “Project” under CEQA Guidelines sec. 15278.
FISCAL IMPACT
The cumulative ongoing cost after all items are implemented for the successor management
resolution is approximately $250,000. The ongoing costs are modeled in the ten-year forecast,
are sustainable under the FHRP, and are consistent with Council adopted LROs.
The forecast assumed modest growth in total compensation and the proposed resolution balances
out modest salary increases and increased cost sharing of CalPERS benefits.
Employee Contribution Levels to PERS Retirement
(Percent of Salary)
Miscellaneous PERS Tier July 2018 July 2019 July 2020
Tier 1 (2.7% @ 55) 8% 9.5% 11%
Tier 2 (2% @ 60) 7% 8.5% 10%
Tier 3 (2% @ 62) 6.25% 7.75% 9.25%
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ALTERNATIVES
1. Do not approve recommended changes to the resolution. Instead, adopt a resolution that
continues unrepresented employee compensation without chan ges. This alternative is not
recommended as the resolution is in line with previous Council direction and is consistent
with the Fiscal Health Response Plan.
2. Do not approve the amended City Manager and City Attorney contracts. This alternative is
not recommended as there is no cost to the City.
Attachments:
a - Management Resolution 2018
b - Exhibit A to Attachment A (Legislative Draft)
c - 2018 City Attorney Resolution
d - 2018 City Manager Resolution
e - Exhibit A to Attachment C (Legislative Draft)
f - Exhibit A to Attachment D (Legislative Draft)
g - Labor Relations Objectives
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RESOLUTION NO. (2018 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO,
CALIFORNIA, REGARDING MANAGEMENT COMPENSATION FOR APPOINTED
OFFICIALS, DEPARTMENT HEADS, AND MANAGEMENT EMPLOYEES AND
SUPERSEDING PREVIOUS RESOLUTIONS IN CONFLICT
WHEREAS, the unrepresented management employees (Appointed Officials, Department
Heads, and Management Employees) of the City of San Luis Obispo have remained committed to
providing high quality service to the community and recognize the City’s commitment to fiscal
responsibility in alignment with the City’s Fiscal Health Response Plan; and,
WHEREAS, the unrepresented management employees have demonstrated sensitivity to
the fiscal challenges facing the City and agree to a shared approach including modest cost of
living increases, which are partially offset by employees’ increased contributions towards
retirement costs; and,
WHEREAS, the City Council is committed to providing competitive compensation to
attract and retain well qualified employees, as provided in the City’s adopted Compensation
Philosophy.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of San Luis Obispo
hereby revises unrepresented management compensation as follows:
SECTION 1. Term. The term of this Resolution shall be from July 1, 2018 through June
30, 2021.
SECTION 2. Cost of Living Adjustments. The City agrees to increase the salaries of
unrepresented management employees with a 1% cost of living adjustment (COLA) effective the
first full pay period in August 2018, a 2% COLA effective the first full pay period in July 2019,
and a 2% COLA effective the first full pay period in July 2020. The increases to salary shall be
partially offset over the term of this Resolution, as set forth in Sections 3 and 4 below.
SECTION 3. Reduction of City Deferred Compensation Contribution. Effective the
first full pay period in August 2018, the City shall cease making a one percent (1%) City
contribution to individual deferred compensation accounts for unrepresented management
employees and reduce contributions to Department Heads and Appointed Officials by one
percent. Those employees will have no further right to receive that City contribution for the term
of this Resolution or thereafter.
SECTION 4. Increased Employee Retirement Cost Sharing. Effective the first full
pay period in July 2019, the employee contribution to CalPERS retirement costs shall be
increased by one and one-half percent (1.5%) for all unrepresented management employees.
Effective the first full pay period in July 2020, the employee contribution to CalPERS retirement
costs shall be increased by an additional one and one-half percent (1.5%) for all unrepresented
management employees.
The City shall continue to provide employees certain fringe benefits as set forth in Exhibit “A”,
fully incorporated by reference.
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SECTION 5. The Director of Finance shall adjust the appropriate accounts to reflect the
compensation changes.
SECTION 6. Authorize the City Manager and Human Resources Director to take actions
to implement this Resolution.
Upon motion of _________________________, seconded by ____________________, and
on the following vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 17th day of July, 2018.
___________________________________
Mayor Heidi Harmon
ATTEST:
__________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
__________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington
City Clerk
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EXHIBIT “A”
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EXHIBIT “A”
Table of Contents
Section A Medical, Dental, Vision .............................................................................. 111
Section B Health Flex Allowance ................................................................................... 2
Section C Life and Disability Insurance ...................................................................... 333
Section D Retirement ................................................................................................. 333
Section E Supplemental Retirement .......................................................................... 666
Section F Pay for Performance .................................................................................. 666
Section G Vacation .................................................................................................... 666
Section H Administrative Leave ................................................................................. 878
Section I Holidays ..................................................................................................... 888
Section J Sick Leave ................................................................................................. 999
Section K Workers’ Compensation Leave............................................................ 101010
Section L Work Out-of-Classification ................................................................... 101010
Section M Vehicle Assignment ............................................................................. 101010
Section N Uniform Allowance ............................................................................... 111111
Section O Appointed Officials ............................................................................... 111111
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EXHIBIT “A”
Page 1 of 13
Section A Medical, Dental, Vision
The City shall establish and maintain medical, dental and vision insurance plans for
appointed officials, department heads and management employees and their
dependents. The City reserves the right to choose the method of insuring and plans to
be offered.
PERS Health Benefit Program
The City has elected to participate in the PERS Health Benefit Program. The City shall
contribute an equal amount towards the cost of medical coverage under the Public
Employee’s Medical and Hospital Care Act (PEMHCA) for both active employees and
retirees. The City’s contribution toward coverage under PEMHCA shall be the statutory
minimum contribution amount established by CalPERS on an annual basis. The City's
contribution will come out of that amount the City currently contributes to employees as
part of the City’s Cafeteria Plan. The cost of the City's participation in PERS will not
require the City to expend additional funds toward health insurance. In summary, this
cost and any increases will be borne by the employees.
Health Insurance Benefits for Domestic Partners
The City has adopted a resolution electing to provide health insurance benefits to
domestic partners (Section 22873 of the PEMHCA).
Conditional Opt Out
Employees who at initial enrollment or during the annual open enrollment period,
complete an affidavit and provide proof of other minimum essential coverage for
themselves and their qualified dependents (tax family) that is not a qualified health plan
coverage under an exchange/marketplace or an individual plan, will be allowed to waive
medical coverage for themselves and their qualified dependents (tax family).
The monthly conditional opt-out incentives are:
Opt Out $200
“Grandfathered” Opt Out $790 (hired before September 1, 2008)
The conditional opt-out incentive shall be paid in cash (taxable income) to the employee.
The employee must notify the City within 30 days of the loss of other minimum essential
coverage. The conditional opt-out payment shall no longer be payable, if the employee
and family members cease to be enrolled in other minimum essential coverage.
Employees receiving the conditional opt-out amount will also be assessed $16.00 per
month to be placed in the Retiree Health Insurance Account. This account will be used
to fund the City's contribution toward retiree premiums and the City's costs for the Public
Employee's Contingency Reserve Fund and the Administrative Costs. However, there is
no requirement that these funds be used exclusively for this purpose nor any guarantee
that they will be sufficient to fund retiree health costs, although they will be used for
negotiated employee benefits.
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EXHIBIT “A”
Page 2 of 13
Dental and Vision Insurance/Dependent Coverage
Effective March 23, 2017, employee participation in the City's dental and vision plans is
optional. Employees who elect coverage shall pay the dental and/or eye premium by
payroll deductions on a pre-tax basis through the City’s Cafeteria Plan.
Section B Health Flex Allowance
Employees electing medical coverage in the City’s plans shall receive a health flex
allowance, as defined by the Affordable Care Act (“ACA”) and shall purchase such
coverage through the City’s Cafeteria Plan. If the health flex allowance is less than the
cost of the medical plan, the employee shall have the opportunity to pay the difference
between the health flex allowance and the premium cost on a pre -tax basis through the
City’s Cafeteria Plan. Effective December 2017 (for January 2018 premiums), if If the
premium cost for medical coverage is less than the health flex allowance, the employee
shall not receive any unused health flex in the form of cash or purchase additional benefits
under the Cafeteria Plan.
Effective the first full pay period following the adoption of this resolution, theThe current
monthly health flex allowance amount for regular, full -time employees will increase as
outlined belowis outlined below:
Level of Coverage
*with no cash back option
effective Dec 2017
Monthly Rates
Upon Council
Adoption 2018
Monthly Health Flex
Allowance Rates
Employee Only $539
Employee Only
“Grandfathered”
$790
Employee Plus One $1,066
Family $1,442
Employees hired prior to September 1, 2008 that are grandfathered in and elect employee
only medical coverage will receive the health flex allowance listed above for employee
only “grandfathered” coverage. As of January 1, 2015, if an employee that is rec eiving
Employee Only or Opt Out “Grandfathered” coverage changes their level of coverage,
they will be eligible to return to the grandfathered coverage in a future year. Effective
December 2017 (for January 2018 premiums), iIf the premium cost for medical coverage
is less than the health flex allowance, the employee shall no longer receive any unused
health flex in the form of cash.
Effective December 20187 (for the January 20198 premium), December 2019 (for the
January 2020 premium), and December 2020 (f or the January 2021 premium), the City’s
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EXHIBIT “A”
Page 3 of 13
total health flex allowance for group medical coverage shall be modified by an amount
equal to one-half of the average percentage increase for family coverage in the PERS
health plans available in San Luis Obispo County. For example: if three plans were
available and the year-to-year changes were +10%, +15%, and +20% respectively, the
City’s contribution would be increased by 7.5% (10% + 15% + 20% ÷ 3 = 15% x 1/2).
Less than full-time employees shall receive a prorated share of the City’s contribution.
The City agrees to continue its contribution to the health flex allowance for two (2) pay
periods in the event that an employee has exhausted all paid time off and leave approved
under the federal Family and Medical Leave Act (FMLA) and the California Family Rights
Act (CFRA) due to an employee's catastrophic illness. That is, the employee shall receive
regular City health flex allowance for the first two (2) pay periods following the pay period in
which the employee’s accrued leave balances reach zero (0) and FMLA/CFRA benefits
have been exhausted.
Section C Life and Disability Insurance
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
benefit $11,250 per month) to age 65 for any sickness or accident, subject to
the exclusions in the long-term disability policy, after a 30-day waiting period.
2. In addition to $4,000 term life insurance purchased by the employee, the City
provides a $100,000 term life insurance including accidental death and
dismemberment through the City’s Cafeteria Plan.
Section D Retirement
A. PERS Contracts
1. “Classic Members First Tier” non-sworn and sworn employees Employees
hired before December 6, 2012.
The City agrees to provide the Public Employees' Retirement System’s (PERS)
2.7% at age 55 retirement plan to all non-sworn employees and the 3% at 50
retirement plan to all sworn employees. The 2.7% at 55 plan includes the
following amendments: 1959 Survivor’s Benefit – Level Four, conversion of
unused sick leave to additional retirement credit, one-year final compensation,
Military Service Credit, and Pre-Retirement Optional Settlement 2 Death
Benefit. The 3% at age 50 plan includes the following amendments: Post -
Retirement Survivor Allowance, conversion of unused sick leave credit to
additional retirement credit, 1959 Survivor’s Benefit- Level Four, one-year final
compensation, Military Service Credit, and Pre-Retirement Optional Settlement
2 Death Benefit.
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EXHIBIT “A”
Page 4 of 13
2. “Classic Members Second Tier” non-sworn and sworn employees hired on or
after December 6, 2012.
Non-sworn employees pay the full eight percent (8%) and sworn employees
pay the full nine (9%) member contribution to PERS. The employee pays to
PERS their contribution; as allowed under Internal Revenue Service Code
Section 414 (h) (2) the contribution is made on a pre -tax basis.“Classic
Members” hired on or after December 6, 2012 CalPERS determines who is a
“Classic Member” within the meaning of the California Public Employees’
Pension Reform Act (PEPRA).For non-sworn “Classic Members” hired on or
after December 6, 2012, the The City will agrees to provide the PERS 2% at
60 retirement plan for non-sworn employees using the highest three-year
average as final compensation. The second-tier formula for non-sworn
employees will include the following amendments: 1959 Survivor’s Benefit –
Level Four, conversion of unused sick leave to additional retirement credit,
Military Service Credit, and Pre-Retirement Optional Settlement 2 Death
Benefit. Employees hired under this plan will pay the full member contribution
required under the plan, presently seven percent (7%).
For sworn “Classic Members” hired on or after December 6, 2012, the City will
provide the PERS 3% at 55 retirement plan for sworn Fire employees and 2%
at 50 retirement plan for sworn Police employees using the highest three-year
average as final compensation. The second-tier formula for sworn employees
will include the following amendments: Post Retirement Survivor Allowance,
conversion of unused sick leave to additional retirement credit, the 1959
Survivor’s Benefit – Level Four, Military Service Credit, and Pre-Retirement
Optional Settlement 2 Death Benefit. Employees hired under these plans will
pay the full member contribution required under the plan, presently eight
percent (8%).
3. “New Members Third Tier” non-sworn and sworn employees hired after
January 1, 2013. PERS determines who are “New Members” within the
meaning of the California Public Employees’ Pension Reform Act (PEPRA).The
employee pays to PERS their contribution; as allowed under Internal Revenue
Service Code Section 414 (h) (2) the contribution is made on a pre -tax
basis.New Members
For employees who PERS determines are “new members” within the meaning
of the PEPRA, the The City will provide the PERS 2% at 62 retirement plan for
non-sworn employees and 2.7% at 57 retirement plan for sworn employees,
using the highest three-year average as final compensation.
B. Member Contributions
1. “Classic Members First and Second Tier”
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EXHIBIT “A”
Page 5 of 13
Effective the first pay period in January 2012, employees began paying the full
member contribution required under the plan for first and second tier sworn
(9%) and non-sworn (8% and 7% respectively) employees and the City
discontinued their payment of the member contribution. For purposes of this
Section, employee contributions are based on salary and special compensation
as defined by PERS.
Effective the first full pay period in July 2019, all non -sworn and sworn
employees shall contribute 1.5% in addition to the employee contribution
defined in the paragraph above. Effective the first full pay period in July 2020,
all non-sworn and sworn employees’ additional contribution shall increase to
3%, in addition to the employee contribution defined in the paragraph above.
These additional contributions are in accordance to the provisions of AB 340,
§7522.30 and §20516.
All of the employee contributions are made on a pre-tax basis as allowed under
Internal Revenue Service Code Section 414 (h) (2).
2. “New Members Third Tier”
Effective on their date of hire, new members will pay 50% of the normal cost,
as determined by PERS.
Effective the first full pay period in July 2019, all non-sworn and sworn new
members shall contribute 1.5% in addition to the employee paying 50% of th e
normal cost. Effective the first full pay period in July 2020, all non-sworn and
sworn new members contribution shall increase to 3%, in addition to the
employee paying 50% of the normal cost. These additional contributions are
in accordance to the provisions of AB 340, §7522.30 and §20516.
All of the employee contributions are made on a pre-tax basis as allowed under
Internal Revenue Service Code Section 414 (h) (2).
C. Contract Amendment with PERS
The City will submit a contract amendment to PERS requesting the employee
contributions effective July 2019 and 2020 (1.5% and 3% respectively) be considered
contributions to the employees account. PERS currently requires a secret ballot
election among the employees affected to change the employees’ rate of contribution.
The contract cannot be amended if a majority of the affected members vote to
disapprove the proposed plan. In the event a secret ballot is required by State Law
and the unrepresented management group does not vote to approve the contract
amendment, the additional contributions will still be required in accordance to the
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EXHIBIT “A”
Page 6 of 13
provisions of §20516(f). In this case the additional contributions would not be credited
to the employee’s PERS account as a normal contribution.
Effective upon their date of hire, new members will pay 50% of the total normal cost of
the member contribution, as determined by PERS.
The employee pays to PERS their contribution; as allowed under Internal Revenue
Service Code Section 414 (h) (2) the contribution is made on a pre-tax basis.
Section E Supplemental Retirement
The City shall contribute 1% of salary for management employees and 2% of salary for
department heads to a defined contribution supplemental retirement plan established in
accordance with sections 401 (a) and 501 (a) of the Internal Revenue Code of 1986 and
California Government Code sections 53215-53224.
Effective the first full pay period in August 2018, the City shall discontinue a 1%
contribution of salary for management employees and the City contribution will decrease
from 2% to 1% for department heads to a defined contribution supplemental retirement
plan.
Section F Pay for Performance
In 1996 the City Council established the Management Pay for Performance System for
department heads and management employees. The system is designed to recognize and
reward excellent performance by department heads and managers and to provide an
incentive for continuous improvement and sustained high performance. Instead of step
increases, the department heads and management employee moves through his/her salary
range solely according to accomplishment of objectives and job-related behavior. Further
information about the Management Pay for Performance System is found in the
Management Pay for Performance System Guide.
Section G Vacation
Vacation leave is governed by Section 2.36.440 of the Municipal Code, except that it may
be taken after the completion of the sixth calendar month of service since the benefit date
or earlier with department head or designee authorization. Each management employee
shall accrue vacation leave with the pay at the following rates:
Management Employees
Years of
Service
Annual
Vacation
Accrual Days*
Annual
Vacation
Accrual Hours
0 to 5 years 12 days 96 hours
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EXHIBIT “A”
Page 7 of 13
5 to 10 years 15 days 120 hours
10 to 20 years 18 days 144 hours
20+ years 20 days 160 hours
Appointed Officials & Department Heads
Years of
Service
Annual
Vacation
Accrual Days*
Annual
Vacation
Accrual Hours
0 to 10 years 15 days 120 hours
10 to 20 years 18 days 144 hours
20+ years 20 days 160 hours
*One day is equivalent to eight (8) hours for a 40 -hour per week line-item position.
of 12 days (96 hours) per year for the first five years of continuous service, 15 days (120
hours) per year upon completion of five years, 18 days (144 hours) per year upon
completion of ten years, and 20 days (160 hours) upon completion of twenty years.
Department Heads accrue vacation leave with pay starting at 15 days (120 hours) per
year for the first ten years of continuous service, and at the same accrual rate as provided
for management employees beyond ten years of continuous service.
Vacation leave shall be accrued as earned semi-monthly provided that not more than
twice the annual rate (not including floating holiday leave) may be carried over to a new
calendar year. Effective April 2019, management employees vacation time shall not
exceed twice the annual rate. If an employee reaches the cap at any time throughout the
year, the employee will stop accruing vacation leave.
However, if the City Manager determines that a department head has been unable to take
vacation due to the press of City business, the City Manager may approve up to a six-
month extension of maximum vacation accrual. The City Manager may, within two years
of appointing a department head, increase the rate of vacation accrual to a maximum of
120 hours per year. Vacation schedules for management employees shall be based upon
the needs of the City and 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 accrual by the employee, except that, a department
head may approve up to a six-month extension of maximum vacation accrual. However,
in no event shall more than one such extension be granted in any calendar year.
Appointed officials, Ddepartment Heads and management employees are eligible, once
annually in December, to request payment for up to 40 hours of unused vacation leave
provided that an employee’s overall performance and attendance practices are
satisfactory. Payment for unused vacation leave is subject to the availability of budgeted
funds.
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EXHIBIT “A”
Page 8 of 13
Section H Administrative Leave
Appointed officials and dDepartment heads and appointed officials shall be granted 80
hours of administrative leave the first full pay period in Januarypay period that January
1st falls into.
Management employees shall be granted 48 hours of administrative leave the first full
pay period in Januarypay period that January 1st falls into.
Administrative leave hours shall be pro-rated on a monthly basis when a department head
or management employee is appointed or leaves employment during the calendar year.
The employee’s final check will be adjusted to reflect the pro -rated hours, however there
is no provision to receive cash payment for unused administrative hours. Unused
administration leave will not be carried over year to year but can be taken through the pay
period that December 31st of each yearfalls within.
Appointed officials, dDepartment Hheads and mManagement employees are considered
exempt from the overtime provisions of the Fair Labor Standards Act (FLSA) and not
eligible for overtime payment. In general, management employees are expected to work
the hours necessary to successfully carry out their duties and frequently must return to
work or attend meetings and events outside their normal working hours. However, when
specifically authorized by the department head due to extraordinary circumstances, a
management employee may receive overtime payment of time and one -half for hours
worked above and beyond what would be considered normal work requirements during
an emergency event lasting at least eight (8) hours.
Section I Holidays
Appointed officials, dDepartment Hheads and mManagement employees shall receive
eleven (11) fixed plus two (2) floating holidays per year. The following days of each year
are designated as paid holidays:
• January 1 – New Year’s Day
• Third Monday in January – Martin Luther King Jr. Birthday
• Third Monday in February – Presidents’ Day
• Last Monday in May – Memorial Day
• July 4 – Independence Day
• First Monday in September – Labor Day
• November 11 – Veteran’s Day
• Fourth Thursday in November – Thanksgiving Day
• Friday after Thanksgiving
• December 25 – Christmas
• One half day before Christmas
• One half day before New Year’s Day
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EXHIBIT “A”
Page 9 of 13
When a holiday falls on a Saturday, the preceding Friday shall be observed. When a
holiday falls on a Sunday, the following Monday shall be observed. A holiday shall be
defined as eight (8) hours of paid time off for regular full-time employees.
When Christmas or New Year’s Holiday falls on a Tuesday or Thursday, the City reserves
the right to close non-essential City services and offices on Monday or Friday (the day
adjacent to the observed holiday). Essential City services are determined at the
discretion of the dDepartment hHead. Employees scheduled to work in non-essential
functions on the days adjacent to the paid holidays would be required to use appropriate
personal leave. The City would notify employees of closure of non-essential City services
and offices no later than October 31st of the same year in order to provide employees with
ample time to plan accordingly.
The two (2) floating holidays shall be accrued on a semi -monthly basis and added to the
vacation accrual.
Effective January 2019, the two floating holidays (16 hours) will be provided in a floating
holiday leave bank the pay period that January 1 st falls within rather than being accrued
on a semi-monthly basis. Employees will have the ability to use floating holiday leave
hours at any point during the calendar year. Unused floating holiday leave will not be
carried over year to year but can be taken through December 31st of each year.
If an employee terminates for any reason, having taken off hours in excess of his/her
prorated share of the floating holiday, the value of the overage will be deducted from the
employee's final paycheck.
Section J Sick Leave
Sick leave is governed by Section 2.36.420 of the Municipal Code. An employee shall
accrue sick leave with pay at the rate of twelve (12) days or the prorated shift equivalent
per year of continuous service since the benefit date. An employee may take up to 48
hours per calendar 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, Labor Code
233 and/or Assembly Bill 1522. This may be extended to 56 hours if a household family
member is hospitalized and the employee submits written verification of such
hospitalization.
In conjunction with existing leave benefits, department head and management employees
with one year of City service who have worked a t least 1,250 hours in the previous year
may be eligible for up to 12 weeks of Family/Medical Leave in accordance with the federal
Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA). In
the event an employee is caring for a family member and is covered under FMLA/CFRA,
they will be able to use all accrued sick leave to care for a family member.
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EXHIBIT “A”
Page 10 of 13
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 forty 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 or relationship shall be cause for discharge.
Upon retirement the employee may choose: 1) a payout of the employee’s accumulated
sick leave balance based on years of service according to the following schedule, 2) to
convert a portion or all of the employee’s sick leave balance to service credit in
accordance with CalPERS regulations, or, 3) a combination of these two options.
According to the following schedule, a percentage of the dollar value of the employee’s
accumulated sick leave may be paid to the employee if the employee requests upon
termination by retirement, and will be paid to the designated beneficiary or beneficiaries
upon termination by death of the employee:
(A) Death – 25%
(B) Retirement and actual commencement of PERS benefits:
(1) After ten years of continuous employment – 10%
(2) After twenty years of continuous employment – 15%
Section K Workers’ Compensation Leave
An employee who is absent from duty because of on -the-job injury in accordance with
State workers’ compensation law and is not eligible for disability payments under Labor
Code Section 4850 shall be paid the difference between his/her base salary and the
amount provided by workers’ compensation law during the first ninety (90) business days
of such temporary disability absence. Eligibility for workers’ compensation leave requires
an open workers’ compensation claim.
Section L Work Out-of-Classification
An out-of-class assignment is the full-time performance of all the significant duties of an
available, funded position in one classification by an individual in a position of another
classification. An employee assigned in writing by management to work out-of-class in a
position that is assigned a higher pay range which is vacant pending an examination or
is vacant due to an extended sick or disability leave, shall receive no less than five percent
(5%), but in no case more than the top salary of the higher range, in addition to their
regular base rate commencing on the eleventh consecutive workday of the out -of-class
assignment.
Section M Vehicle Assignment
For those department heads requiring the use of an automobile on a regular 24 -hour basis
to perform their normal duties, the City will, at City option, provide a City vehicle or an
appropriate allowance for the employee’s use of a personal automobile. Department
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EXHIBIT “A”
Page 11 of 13
heads who are not provided a City vehicle shall receive a car allowance of $236 per
month, paid semi-monthly.
The use of a personal automobile for City business will be eligible for mileage
reimbursement in accordance with standard City policy.
Section N Uniform Allowance
Employees required to wear a uniform, including the Fire Chief, Deputy Fire Chief, Fire
Marshal and Police Chief, shall receive the same uniform allowance as those they directly
supervise. For “Classic Members” as defined by PERS, uniform allowance shall be
reported to PERS as special compensation. Uniform allowance will not be pro-rated upon
separation from employment.
Section O Appointed Officials
The 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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R ______
RESOLUTION NO. _____ (2018 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING A CONTRACT OF EMPLOYMENT
FOR CITY ATTORNEY
WHEREAS, on January 2, 2010 the City Council approved a contract of employment
appointing Christine Dietrick to the position of City Attorney; and
WHEREAS, the City Council conducted a performance evaluation of this appointed
official on March 21, 2018, in accordance with the Appointed Officials’ Performance Process as
modified in December of 2011.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The City Council hereby approves the amended contract of employment
attached hereto as Exhibit A.
SECTION 2. The City Council shall evaluate the performance of the City Attorney
annually.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 17th day of July, 2018.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
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Resolution No. _____ (2018 Series) Page 2
_____________________________________
Jon Ansolabehere
Assistant City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington
City Clerk
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R ______
RESOLUTION NO. _____ (2018 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING A CONTRACT OF EMPLOYMENT
FOR CITY MANAGER
WHEREAS, on September 29, 2017 the City Council approved a contract of employment
appointing Derek Johnson to the position of City Manager; and
WHEREAS, the City Council conducted a performance evaluation of this appointed
official on March 21, 2018, in accordance with the Appointed Officials’ Performance Process as
modified in December of 2011.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The City Council hereby approves the amended contract of employment
attached hereto as Exhibit A.
SECTION 2. The City Council shall evaluate the performance of the City Manager
annually.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 17th day of July, 2018.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
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Resolution No. _____ (2018 Series) Page 2
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington
City Clerk
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AMENDED CONTRACT OF EMPLOYMENT WITH J. CHRISTINE DIETRICK
CITY ATTORNEY
THIS CONTRACT is amended this 17th day of July, 2018 by and between
the CITY OF SAN LUIS OBISPO, a municipal corporation and charter city
(hereinafter referred to as "CITY"), and J. CHRISTINE DIETRICK, a contract
employee (hereinafter referred to as "CHRISTINE DIETRICK”);
WITNESSETH:
WHEREAS, Charter Section 701 provides that the SAN LUIS OBISPO
CITY COUNCIL (hereinafter referred to as “COUNCIL”) is responsible for the
appointment and removal of the CITY ATTORNEY, and
WHEREAS, the COUNCIL, on behalf of the CITY acknowledges and
accepts the responsibility for supervision of the CITY ATTORNEY; and
WHEREAS, the COUNCIL is desirous of appointing a CITY ATTORNEY
and wishes to set the terms and conditions of said employment; and
WHEREAS, CHRISTINE DIETRICK desires to continue in her position of
CITY ATTORNEY 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 CHRISTINE DIETRICK is effective January 1,
2010.
B. Nothing in this Contract shall prevent, limit or otherwise interfere
with the right of the COUNCIL to terminate the services of CHRISTINE
DIETRICK 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 CHRISTINE DIETRICK to resign at any time from her position
with the CITY, subject only to the provision set forth in Section 13 of this
Contract.
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Section 2. Duties and Salary.
A. CITY agrees to employ CHRISTINE DIETRICK as full-time CITY
ATTORNEY of the City to perform the functions and duties specified in the
Charter 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. COUNCIL agrees to pay CHRISTINE DIETRICK, for her services
rendered pursuant hereto, an annual base salary of $194,844 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.
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 ,
decreasing to 2.5% of salary effective the first full pay period in August 2018, the
ability to cash out up to three weeks’ vacation at the end of each fiscal year, upon
CHRISTINE DIETRICK’S request, and the same benefits as those offered by the
CITY to the CITY ATTORNEY, in accordance with the Management
Compensation Resolution, Resolution No. 10785 (2017 Series) and any
successors.
Section 4. Performance Evaluation.
A. By April 30, 2010, COUNCIL and CHRISTINE DIETRICK shall
establish mutually agreeable written goals, performance objectives, and priorities
for the performance period ending March 30, 2011. Further, Council shall
conduct an “interim” evaluation by October 29, 2010. An annual formal Council
evaluation will be conducted in March of 2011 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 ATTORNEY compensation
shall be reviewed by COUNCIL in April 2011 consistent with the Management
Pay-for-Performance System in place at that time.
B. Each calendar year thereafter, COUNCIL shall review and evaluate
the performance and compensation of CHRISTINE DIETRICK in accordance
with the adopted Appointed Officials Evaluation Process, best management
practices, and informed by comparison agency data.
Section 5. Outside Activities, Conduct and Behavior.
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A. CHRISTINE DIETRICK shall not engage in teaching, consulting or
other non-CITY connected business without the prior approval of COUNCIL.
B. CHRISTINE DIETRICK 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 CHRISTINE DIETRICK necessary for her continuation and full
participation in national, regional, state, and local associations, and organizations
necessary and desirable for her 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 CHRISTINE DIETRICK for professional and official
travel, meetings, and occasions adequate to continue the professional
development of CHRISTINE DIETRICK and to adequately pursue necessary
official functions for the CITY, including but not limited to the League of California
Cities Annual Conference, League of California Cities City Attorneys Department
Conference, 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 CHRISTINE DIETRICK for short courses, institutes,
and seminars that are necessary for her 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 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 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.
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,
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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 CHRISTINE DIETRICK’S duties as CITY ATTORNEY 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
thereon.
Section 10. Other Terms and Conditions of Employment.
The COUNCIL, in consultation with CHRISTINE DIETRICK, shall fix any
such other terms and conditions of employment, as it may determine from time to
time, relating to the performance of CHRISTINE DIETRICK, 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 CHRISTINE
DIETRICK, except to the degree of such a reduction across-the-board for all
employees of the CITY or CHRISTINE DIETRICK provides written consent to the
reduction.
Section 12. Termination and Severance Pay.
A. In the event CHRISTINE DIETRICK’S employment is terminated by the
COUNCIL, or she resigns at the request of a majority of the COUNCIL during
such time that she is otherwise willing and able to perform the duties of CITY
ATTORNEY, the COUNCIL agrees to pay her a lump sum cash payment equal
to nine (9) months compensation (salary and all appointed officials fringe
benefits). Additionally, CITY shall extend to CHRISTINE DIETRICK the right to
continue and purchase at her expense health insurance pursuant to the terms
and condition of the Consolidated Omnibus Budget Reconciliation Act of 1986
(COBRA) or any successor legal requirement. CHRISTINE DIETRICK is the
CITY ATTORNEY for the purposes of the benefits under the California Joint
Powers Insurance Authority of 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 California Joint Powers Insurance Authority’s Memorandum
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 payment
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5
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 CHRISTINE
DIETRICK’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 CHRISTINE DIETRICK of the intent to
terminate this Agreement.
Section 13. Resignation.
In the event CHRISTINE DIETRICK voluntarily resigns her position with
the CITY, she shall give the COUNCIL at least two (2) months 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.
C. It is the intent of the COUNCIL that this CONTRACT and the
appointment of CHRISTINE DIETRICK as CITY ATTORNEY are in accordance
with the 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 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.
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IN WITNESS WHEREOF, CITY and EMPLOYEE have executed this
Contract on the day and year first set forth above.
_____________________________ _______________
_____________________________ _______________
J. CHRISTINE DIETRICK DATE
______________________________ _______________
____________________________ ________________
HEIDI HARMON, MAYOR DATE
ATTEST:
____________________________ ________________
TERESA PURRINGTON DATE
CITY CLERK
APPROVED AS TO FORM:
__________________________________
JON ANSOLABEHERE
ASSISTANT CITY ATTORNEY
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Page 1
CONTRACT OF EMPLOYMENT WITH DEREK J. JOHNSON
CITY MANAGER
THIS CONTRACT is entered into as of this 17th day of July, 2018 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 ot her 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 $209,898 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 a car allowance of $450 per month, a City
contribution of 3.5% of salary to a 401 (a) supplemental retirement plan,
decreasing to 2.5% of salary effective in August 2018, the ability to cash out up to
three weeks’ vacation at the end of each f iscal year, upon the request of DEREK
J. JOHNSON, and 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 2019 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
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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
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
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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.
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 thereon.
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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Page 6
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:
_____________________________ ________________
TERESA PURRINGTON DATE
CITY CLERK
APPROVED AS TO FORM:
__________________________________
J. CHRISTINE DIETRICK
CITY ATTORNEY
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2
Labor Relations Objectives
Adopted by Council September 23, 2014
Revised by Council March 20, 2018
1. Maintain fiscal responsibility by ensuring that fair and responsible employee
compensation expenditures are supported by on-going revenues. (Theme –
Fiscal Responsibility)
2. Continue to make progress in the area of long-term systemic pension cost
containment and reduction, including reversing the unfunded pension liability
trend and other actions consistent with State law. (Theme – Cost
Containment/Reduction)
3. Continue to effectively manage escalating health benefit costs through balanced
cost sharing and other means while maintaining comprehensive health care
coverage for all eligible employees. (Theme – Cost Containment)
4. As necessary to attract and retain well qualified employees at all levels of the
organization, provide competitive compensation as articulated in the City’s
Compensation Philosophy, including relevant local, statewide or national labor
markets. (Theme – Recruitment and Retention)
5. Employee labor agreements will be negotiated in good faith, in a timely manner
that avoids retroactivity provisions unless there is a compelling need. (Theme –
Cost Containment)
6. Contract provisions shall take into consideration the City’s ability to effectively
and efficiently implement and administer them using the City’s financial and
human resources systems to ensure accuracy and compliance with federal,
state, and local laws. (Theme – Best Practices and Compliance)
PACKET PAGE 148
2
Adjustments to Compensation for the
Unrepresented Management
Employees Including Appointed
Officials Evaluations
Monica Irons, Human Resources Director
Nickole Sutter, Human Resources Analyst II
July 17, 2018
Background
Unrepresented Management Employees
Appointed Officials Evaluation Process
Labor Relations Objectives and Fiscal Health
Response Plan guided conversations with
management group
Unrepresented Management
Recommendation
Term: July 1, 2018 to June 30, 2021
Annual Health Insurance Cost-Sharing
Cost of Living Adjustments:
1% COLA August 2018; 1% City contribution to deferred
compensation eliminated.
2% COLA July 2019; Employee contribution to CalPERS
increased by 1.5%.
2% COLA July 2020; Employee contribution to CalPERS
increased by an additional 1.5%.
Eliminate 1% Employer Contribution to PARS effective August
2018
PERS Retirement Cost-Sharing: 3% more paid by employees
Fiscal Impact
Modeled in the 10-year forecast
In line with Fiscal Heath Response Plan and Labor
Relations Objectives
Questions