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HomeMy WebLinkAbout2022-12-06; City Council; ; Employment Agreement with City Manager Scott ChadwickCA Review CKM Meeting Date: Dec. 6, 2022 To: Mayor and City Council From: Cindie K. McMahon, City Attorney Staff Contact: Judy Von Kalinowski, Human Resources Director judy.von.kawlinowski@carlsbadca.gov, 442-339-2438 Subject: Employment Agreement with City Manager Scott Chadwick District: All Recommended Action Adopt a resolution approving the Amended and Restated City Manager Employment Agreement with Scott Chadwick, with a one-time fiscal impact of $14,565 and an annual fiscal impact of $436. Executive Summary The City Council is being asked to approve the city’s employment agreement with the City Manager. Discussion Background June 12, 2018 - The City Council approved an employment agreement with the City Manager, effective August 1, 2018. July 2019 - The employment agreement was amended and restated; the City Council increased the City Manager’s annual base salary from $295,581 to $306,813. 2020 - The City Manager did not receive a compensation increase in 2020. Dec. 14, 2021 - the City Council increased the City Manager’s annual base salary to $326,756, effective July 1, 2021. New terms of employment The City Council held a closed session meeting on Nov. 8, 2022, to discuss the performance of the City Manager and authorized Mayor Pro Tem Blackburn and Council Member Bhat-Patel to negotiate with the City Manager regarding his terms of employment. The City Manager agreed to the new terms of his employment which will include the following: •A one-time stipend of $14,565 •An increased city-paid life insurance benefit of $500,000 The new terms also include updates to the Separation from Employment section, incorporation of the International City/County Management Association’s Code of Ethics, and a provision Dec. 6, 2022 Item #8 Page 1 of 13 requiring the City Manager to ensure the city follows its five-year strategic plan. The changes in the City Manager’s terms of employment are reflected in the Amended and Restated City Manager Employment Agreement included as Attachment A to Exhibit 1. The City Council did not authorize a change to the City Manager’s base salary. Municipal Code section Chapter 2.12 of the Carlsbad Municipal Code addresses issues related to the appointment, employment, powers and duties of the City Manager. Some of the provisions of Chapter 2.12 have not been revised since 1973. Once the Amended and Restated City Manager Employment Agreement is approved by the City Council, staff will place an item on a future agenda for the City Council to review suggested revisions to Chapter 2.12 to ensure the chapter aligns with the agreement’s provisions. Options The City Council may either approve the resolution and authorize the execution of the Amended and Restated City Manager Employment Agreement or schedule a closed session meeting to instruct its negotiators as to other terms of employment for the City Manager. Fiscal Analysis The annual cost of the changes in the terms of the City Manager’s employment is $436. The fiscal year 2022-23 impact which includes the one-time stipend is $14,565 and will be funded by the existing General Fund budget. Next Steps Staff will obtain the necessary signatures to finalize the agreement. Staff will also place an item on a future agenda to revise Carlsbad Municipal Code Chapter 2.12 – City Manager. Environmental Evaluation The recommended action does not constitute a project within the meaning of the California Environmental Quality Act under California Public Resources Code Section 21065 in that it has no potential to cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. Public Notification This item was noticed in keeping with the state's Ralph M. Brown Act and it was available for public viewing and review at least 72 hours before the scheduled meeting date. Exhibits 1. City Council resolution Dec. 6, 2022 Item #8 Page 2 of 13 RESOLUTION NO. 2022-274 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE AMENDED AND RESTATED CITY MANAGER EMPLOYMENT AGREEMENT WITH SCOTT CHADWICK, WITH A ONE-TIME FISCAL IMPACT OF $14,565 AND AN ANNUAL FISCAL IMPACT OF $465 WHEREAS, the City Council of the City of Carlsbad, California, desires to approve the Amended and Restated City Manager Employment Agreement with Scott Chadwick; and WHEREAS, the Amended and Restated City Manager Employment Agreement does not make any changes to the City Manager's base salary; and WHEREAS, the Amended and Restated City Manager Employment Agreement provides for a one-time stipend of $14,565 to the City Manager and an increased city-paid life insurance benefit of $500,000 and makes other changes to the terms of the City Manager's employment, as further set forth in Attachment A. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California as follows: 1.That the above recitations are true and correct. 2.That the Amended and Restated City Manager Employment Agreement with Scott Chadwick in Attachment A is approved. 3.That the Mayor of the City of Carlsbad is authorized to execute the Amended and Restated City Manager Employment Agreement with Scott Chadwick on behalf of the City of Carlsbad. 4.That the fiscal year 2022-23 impact of $14,783 will be funded by the existing General Fund budget. Exhibit 1 Dec. 6, 2022 Item #8 Page 3 of 13 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 6th day of December, 2022, by the following vote, to wit: AYES: NAYS: ABSENT: Blackburn, Bhat-Patel, Acosta, Norby. None. Hall. for f;!JvG k FAVIOLA MEDINA, City Clerk Services Managerf -{SEAL) Dec. 6, 2022 Item #8 Page 4 of 13 Attachment A Dec. 6, 2022 Item #8 Page 5 of 13 CITY OF CARLSBAD AMENDED AND RESTATED CITY MANAGER EMPLOYMENT AGREEMENT This Amended and Restated City Manager Employment Agreement ("Agreement") is entered into as of the date this Agreement is approved by the City Council for the City of Carlsbad, by and between the City of Carlsbad, California, a municipal corporation (the "City"), and Scott Chadwick, an individual (the "City Manager"). The City and City Manager are sometimes individually referred to as a "Party" and collectively as " Parties. 11 RECITALS WHEREAS, Chapter 2.12 of the Carlsbad Municipal Code provides for the Office of the City Manager who shall be appointed and retained by the City Council wholly on his management ability and experience, particularly in the municipal management field, and shall hold that office for and during the pleasure of the City Council; and WHEREAS, on June 12, 2018, the City Council adopted Resolution 2018-101 establishing an employment agreement with Scott Chadwick as City Manager, effective August 1, 2018; and WHEREAS, on July 9, 2019, the City Council conducted a performance review of Scott Chadwick and authorized changes to his employment agreement; and WHEREAS, on September 104 2019, the City Council adopted Resolution No. 2019-167 that amended and restated the employment agreement by authorizing an increase in salary; and WHEREAS, on November 161 2021, the City Council conducted a performance review of Scott Chadwick and on December 7, 2021, the City Council authorized changes to his employment agreement; and WHEREAS, on December 14, 2021, the City Council adopted Resolution No. 2021-284 that amended and restated the employment agreement by authorizing an increase in salary; and WHEREAS, on November 8, 2022, the City Council conducted a performance review of Scott Chadwick and authorized changes to his employment agreement; and WHEREAS, it is the desire of the Parties to act as a deterrent against malfeasance or dishonesty for personal gain on City Manager's part; and to provide for terminating his services at such time as he may be unable to fully discharge his duties or when the City Council may otherwise desire to terminate his employment; and WHEREAS, it is the desire of the Parties to enter int o this Agreement on the terms and conditions set forth below. NOW, THEREFORE, in consideration of the mutual covenants contained in this Dec. 6, 2022 Item #8 Page 6 of 13 Agreement, the Parties agree as follows: SECTION I -DUTIES The City Council agrees to employ Scott Chadwick as City Manager and to exercise the powers, duties and responsibilities set forth in Carlsbad Municipal Code Chapter 2.12 and applicable state law and such other applicable ordinances and resolutions now in effect or subsequently adopted by the City Council. City Manager is subject to and shall comply with the provisions of California Government Code Title 5, Division 2, Part 1, Chapter 2, Article 2.61 entitled "Abuse of Office" (California Government Code Sections 53243-53244). SECTION 11 -TERM Effective August 1, 2018, Scott Chadwick is appointed as City Manager and shall continue in that capacity and shall continue to fulfill the powers, functions and duties of City Manager and shall serve in that capacity until such time as this Agreement is terminated pursuant to Section IV below. The purpose of this paragraph is to ensure compliance with Government Code Sections 53260-53264. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of City Manager to resign at anytime subject only to the provisions set forth in Section IV below. City Manager agrees to remain in the exclusive employ of the City and neither to accept other employment norto become employed by any other employer without the express written permission of the City Council; provided, nothing contained in this Agreement shall be construed or interpreted to prohibit City Manager from engaging in such occasional activity such as teaching, writing or consulting which activity shall only be conducted apart from his normal and regular functions and duties. SECTION Ill ~ COMPENSATION A. Base Salary Effective as of July 1, 2021, the annual base salary for City Manager shall be $326,756, which shall be paid bi-weekly, $12,567.56 per completed pay cycle. This includes the compensation for the additional positions of Executive Manager of the Carlsbad Water District and/or other boards or commissions that assemble and require the services of City Manager. B. Stipend The City will make a one-time stipend payment to City Manager of $14,565. The payment shall be made within 15 days of the City Council's approval of this Agreement. The payment is taxable. The payment is not pensionable compensation. C. Deferred Compensation The City shall make an annual contribution on behalf of City Manager to a Section 457 Deferred Compensation Plan in the maximum amount allowable, prorated over the -2- Dec. 6, 2022 Item #8 Page 7 of 13 number of pay periods in the calendar year. D. t{etirement City Manager will be enrolled in the miscellaneous CalPERS retirement system in accordance with the PEPRA rules (California Government Code sections 7522 et seq.) under the City's "Tier 2,'' which consists of a 2% at 60 years of age formula with a three-year final average earnings and pensionable compensation cap. The City Manager will be responsible for the CalPERS employee contribution. SECTION IV-SEPARATION FROM EMPlOYMENT A. Termination of Employment Upon termination of City Manager's employment by the City for any reason other than City Manager's voluntary resignation, the City shall pay City Manager the sum of $3,500 to compensate City Manager for costs incurred by City Manager in obtaining legal review, benefits review, or other' professional advisory or personal counseling services which City Manager elects to utilize in connection with the termination, including the review and negotiation of any separation related agreements with the City. B. Resignation /Retirement City Manager may resign at any time and agrees to give the City at least 60 days' advance written notice of the effective date of City Manager's resignation, unless the Parties otherwise agree in writing. If City Manager retires from full-time public service with the City, City Manager may provide six months' advance notice. City Manager's actual retirement date will be mutually established. C. Termination & Remo\/al 1. City Manager is an at-will employee serving at the pleasure of the City Council as provided in Government Code Section 36506. 2. The City Council may remove City Manager at any time, with or without cause, by a majority vote of its members. Notice of termination shall be provided to City Manager in writing. Termination as used in this section shall also include a request by City Council for City Manager to resign, a reduction in salary or other financial benefits of City Manager, a material reduction in the powers and authority of City Manager, or the elimination of City Manager1s position. Any such notice of termination or act constituting termination shall be given at or effectuated at a duly noticed meeting of the City Council. 3. The City Manager shall not be removed during the 120-day period preceding or following any City election for membership on the City Council, or during the 120-day -3 - Dec. 6, 2022 Item #8 Page 8 of 13 period following any change in membership of the City Council, except upon unanimous vote of the City Council. 4. Given the at-will nature of the position of City Manager, an important element of the employment agreement pertains to termination. It is in both the City's interest and that of City Manager that any separation of City Manager is done in a professional manner. The parties agree that, except as otherwise required by law, any public statement made related to the separation will be made by mutual agreement. No further statements will be made. Should the City violate this provision, the City shall compensate City Manager in the amount of $5,000 per instance. D. Severance Pay 1. In the event the City Council terminates this Agreement during such time as City Manager is ready, willing and able to perform City Manager's duties under this Agreement, the City agrees either to pay City Manager a lump sum cash payment equal to 12 months' base salary and benefits in effect at the time of separation or to continue the City Manager's base salary and benefits (i.e., health, dental, vision) for a period of 12 months. This decision will be made upon mutual agreement of the parties. 2. Th e City shall extend to City Manager the right to continue health insurance as may be required by and pursuant to the terms and conditions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The City agrees to pay City Manager's COBRA coverage for the same number of months for which City Manager is entitled to a lump sum cash payment or until City Manager either secures full-time employment or obtains other health insurance, whichever of these three events first occurs. City M anager shall notify the City within five days of securing new full-time employment or insurance. 3. In the event the City refuses, following written notice of non~compliance, to comply with any provision in this Agreement benefiting City Manager, or City Manager resigns following a suggestion, whether formal or informal, by a majority of the City Council that City Manager resign, then City Manager may, at City Manager's option, be deemed to be terminated as of the date of such refusal to comply or suggestion to resign and this severance pay provision shall be actuated. 4. All payments required under this agreement are subject to and shall be interpreted to comply with the limitations set forth in Government Code Section 53260. 5. The Parties agree that if the City were to fail or refuse to promptly and fully provide and pay to City Manager all of the severance and other benefits due upon termination as provided by this Agreement, City Manager would sustain material -4 - Dec. 6, 2022 Item #8 Page 9 of 13 damages. These damages could include, among other losses: the loss ofthe opportunity to transition employment, the loss of alternate employment opportunities, the loss of income, the loss of opportunities for retraining or further education, the erosion of personal investments and savings, the loss of retirement benefits, physical displacement or the loss of a residence, the loss of insurance and medical benefits, expenses for professional counseling, the loss of standard of living including educational opportunities for children, and the resultant emotional distress to City Manager and City Manager's family. These damages are, and will continue to be, impracticable and extremely difficult to ascertain. Accordingly, in the event that the City shall fail or refuse to promptly and fully provide and pay to City Manager all of the severance benefits or other benefits due upon termination as provided by this Agreement, then the City shall pay to City Manager, as liquidated damages, a lump sum cash payment equal to 18 months' current base salary as prov1ded above in addition to all other severance benefits provided by this Agreement. Any such payments shall constitute liquidated damages only and not additional severance pay or benefits subject to the provisions of Government Code Section 53260. E. Involuntary Resignation 1. In the event that the City Council formally or a majority of the City Council informally asks City Manager to resign, then City Manager shall be entitled to resign and still receive the severance benefits provided above. 2. City Manager has relied upon the provisions of the Carlsbad Municipal Code upon entering into this Agreement, as it pertains to City Manager's role, powers, duties, authority, responsibilities, compensation and benefits. If the City Council adds, deletes or amends the Carlsbad Municipal Code related to City Manager's duties and responsibilities without the consent of City Manager, and such addition, deletion or amendment is inconsistent with the terms of this Agreement and City Manager's role, powers, duties, authority, responsibilities, compensation and benefits as currently provided, then City Manager shall have the right, at City Manager's sole discretion, to give the City Council notice that such amendment(s) constitute a request by the City Council for City Mar'lager's involuntary resignation. 3. Upon receipt of such notice the City Council shall have 30 days in which to do one of the following: a. rescind the amendment(s); b. renegotiate this Agreement to City Manager's satisfaction; c. confirm that City Manager is being asked to involuntarily resign; or d. take no action. If either c. or d. occurs, or the City is unable to accomplish b.1 then City Manager shall -5 - Dec. 6, 2022 Item #8 Page 10 of 13 be entitled to resign and still receive the severance benefits provided above. f. Separation for Cause 1. Notwithstanding the provisions above, City Manager may be terminated for cause. As used in this section, "cause" shall mean only one or more of the following: a. Conviction of a felony; b. Continued abuse of non-prescription drugs or alcohol that materially affects the performance of the City Manager's duties; or c. Failure or refusal to carry out lawful duties assigned to the Cit y Manager. 2. If the City terminates City Manager for cause, then the City may terminate this Agreement immediately, and City Manager shall be entitled to only the compensation accrued up to the date of termination, payments required by Section G below, and such other termination of benefits and payments as may be required by law. City Manager shall not be entitled to any severance benefits provided above. 3. If the City terminates City Manager for cause, the City and City Manager agree that, except as otherwise required by law, neither Party shall make any written or oral statements to members of the public or the press concerning City Manager's termination except in the form of a joint press release which is mutually agreeable to both Parties. The joint press release shall not contain any text or information that would be disparaging to either Party. Provided, however, that either Party may verbally repeat the substance of any such press release in response to inquiries by members of the press or public. G. Payment for Unused Leave Balance On separation from City employment, City Manager shall be entitled to all benefits, rights, and privileges related to the payout of all unused leaves during the course of his employment with the City of Carlsbad. SECTION V -VEHICLE ALLOWANCE OR PROVISION OF VEHICLE City Manager's functions and duties require him to have use of an automobile during his employment with the City. The City shall provide City Manager the monthly sum of $1000 for the expense of owning, operating and maintaining and insuring his personal automobile. City Manager shall keep and maintain in full force and effect personal liability and property damage insurance in the minimum amounts of $250,000 per person and $500,000 per occurrence and property damage of $100,000, and sha ll name the City of Carlsbad as an additional insured. The amounts received under this section are in addition to the base salary and shall be considered as part of the total cash compensation discussed in Section Ill, above. -6 - Dec. 6, 2022 Item #8 Page 11 of 13 SECTION VI -OTHER SUPPLEMENTAL BENEFITS City Manager shall accrue vacation leave and sick leave as provided for under existing City policy. City Manager shall be credited for twenty years of service credit in calcurating leave accrual rates and City Manager shall be permitted to earn and accrue up to 320 hours of vacation. All other actions taken by the City Council relating to fringe benefits for management employees shall be considered actions granting the same to City Manager, except that City Manager may decline any fringe benefits to the extent permitted or authorized by law, City policy, or this agreement. As used in this Agreement1 fringe benefits include but are not limited to vacation, sick leave, educational benefits as they existed on the date of the approval of this Agreement, holidays, retirement (CalPERS), benefits and payments, health insurance, dental insurance, long-term disability insurance and life insurance as set forth in the Performance Management and Compensation Plan and elsewhere. City Manager may elect to participate in any of the medical insurance programs offered by the City. The City will provide for a life insurance benefit of $500,000 for the City Manager. SECTlON VII -ANNUAL REVIEW The City Council shall review and evaluate the performance of City Manager in July of each year. This review and evaluation of performance and salary shall be in accordance with the criteria developed jointly by the City Council and City Manager. The Mayor shall provide City Manager with a summary written statement of the findings of the City Council and provide an adequate opportunity for City Manager to discuss his evaluation with the City Council. The Mayor shall report out and authorize the Human Resources Director to make changes to the salary or other agreed benefits to this or subsequent employment contracts in accordance with all applicable laws. SECTION VIII -STRATEGIC PLAN On October 11, 2022, City Council approved its first 5-year strategic plan. It is the duty and responsibility of the City Manager to ensure the City follows the strategic plan. The City Manager shall periodically update City Council on the implementation status of the City's strategic plan. SECTION IX -PROFESSIONAL AND ORGANIZATIONAL DEVELOPMENT All normal business expenses, such as attendance at the League of California Cities, ICMA, or other association or industry association meetings and conferences as well as business lunches, dinners, etc., will be provided for separately in the operating budget of the City Manager's Office. The City Council continues to support and encourage continuing development and professionalism of the City organization and its employees. As such, the City Council supports City Manager's organizational development efforts, including but not limited to, employee development, department development, and organization-wide development. These efforts shall support the City Council Vision and Goals and provide for the ongoing development of a high~performing organization. -7 - Dec. 6, 2022 Item #8 Page 12 of 13 SECTION )( -ICMA CODE OF ETHICS The Parties acknowledge that City Manager is a member of the International City Management Association ("ICMA "). The Parties mutually desire that City Manager be subject to and comply with the ICMA Code of Ethics as follows: Tenet 1-We believe professional management is essential to efficient and democratic local government by elected officials. Tenet 2 -Affirm the dignity and worth of local government services and maintain a deep sense of social responsibility as a trusted public servant. Tenet 3 -Demonstrate by word and action the highest standards of ethical conduct and integrity in all public, professional, and personal relationships in order that the member may merit the trust and respect of the elected and appointed officials, employees, and the public. Tenet 4 -Serve the best interests of the people. Tenet 5 -Submit policy proposals to elected officials; provide them with facts, and technical and professional advice about policy options; and collaborate with them in setting goals for the community and organization. Tenet 6-Recognize that elected representatives are accountable to their community for the decisions they make; members are responsible for implementing those decisions. Tenet 7 -Refrain from all political activities which undermine public confidence in professional administrators. Refrain from participation in the election of the members of t he employing legislative body. Tenet ,8-Make it a duty continually to improve the member's professional ability and to develop the competence of associates in the use of management techniques. Tenet 9 -Keep the community informed on local government affairs; encourage communication between the citizens and all local government officers; emphasize friendly and courteous service to the public; and seek to improve the quality and image of public service. Tenet 10-Resist any encroachment on professional responsibilities, believing the member should be free to carry out official policies without interference, and handle each problem without discrimination on the basis of principle and justice. Tenet 11-Handle all matters of personnel on the basis of merit so that fairness and impartiality govern a member's decisions, pertaining to appointments, pay adjustments, promotions, and discipline. -8- Tenet 12 -Public office is a public trust. A member shall not leverage his or her position for personal gain or benefit. SECTION XI -EFFECTIVE DATE The effective date of this Agreement is the date this Agreement is executed by all parties. SECTION XII -SEVERABILITY If any clause, sentence, part, section, or portion of this Agreement is found by a court of competent jurisdiction to be illegal or unenforceable, such clause, sentence, part, section, or portion so found shall be regarded as though it were not part of this Agreement, and the remaining parts of this Agreement shall be fully binding and enforceable by the Parties. SECTION XIII -NOTICES Notices pursuant to this Agreement shall be given by deposit in the custody of the United States Postal Service, postage prepaid, addressed as follow or as such address may be changed from time to time upon written notice to the other: CITY City of Carlsbad Mayor City Hall 1200 Carlsbad Village Drive Carlsbad, CA 92008 CITY MANAGER Scott Chadwick 1200 Carlsbad Village Drive Carlsbad, CA 92008 IN WITNESS WHEREOF, the City and the City Manager have caused this Agreement to be executed on ~day of D( c,m'Af/1.C , 2022 . CITY OF CARLSBAD CITY By:--""'-'-/__, _________ _ Matt Hall, Mayor ATTEST: APPROVED AS TO FORM: By: 1JvV By: ~ t{c_~ L _ Faviola Medina, I City Clerk Services Manager -9 - Dec. 6,2022 Cindie K. McMahon City Attorney Item #8 Page 13 of 13