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HomeMy WebLinkAboutC-2146 & C-2269i �1(00 -IZAX EMPLOYMENT AGREEMENT This Agreement between the City of Arcadia ( "City") and William R. Kelly ( "Manager ") is made this I" day of January, 2007. RECITALS A. City desires to continue to employ William R. Kelly as the City Manager of the City of Arcadia as provided by the Arcadia City Charter Section 600 et seq. and the terms and conditions set out herein. B. Manager desires to continue to serve as City Manager of the City of Arcadia on the terms and conditions set out herein. AGREEMENT NOW, THEREFORE, the parties agree as follows on the terms and conditions of Manager's employment. 1. DUTIES City hereby employs Manager, and Manager hereby accepts employment, as City Manager of the City. Manager shall perform the functions and duties specified for the City Manager of the City in the Arcadia City Charter Section 601 and other ordinances, resolutions and policies of the City and to perform such other legally permissible and proper duties and functions as the City Council of the City (the "Council ") may from time to time assign, consistent with the Arcadia City Charter and other applicable law. Pursuant to Arcadia City Charter Section 600, Manager shall at all times serve at the will and pleasure of the Council (" 'at will' employment status "). RVPUB \WPLDYDV27026.1 j E 2. SEVERANCE AND SEVERANCE PAY AND BENEFITS (a) In the event that Manager is involuntarily terminated by the Council or a "negotiated settlement" for voluntary termination is approved by the Council, City agrees to pay Manager within fifteen (15) days of the later to occur of (i) the date of termination of employment or (ii) the date of final determination by the Council of the matters subject to a hearing as set forth in this paragraph, a lump sum cash payment ( "Severance Pay ") equal to eighteen (18) months of the base salary Manager is receiving on the date of the Council's action to terminate Manager, less legally required or authorized deductions. City shall also continue the health benefits being provided to Manager at the time of termination for the period of Severance Pay or until Manager finds other employment, whichever occurs first ( "Severance Benefits "). However, in the event Manager is terminated due to the reasonable determination of the Council, based upon the weight of the evidence produced at a hearing conducted by the Council, that Manager has committed either (i) any illegal act involving personal gain to Manager, (ii) gross negligence or (iii) malfeasance, then, and in that event, City shall have no obligation to pay the Severance Pay and Severance Benefits. Any hearing conducted by the Council for the purposes set forth in this paragraph shall be commenced within thirty days following the date of termination of Manager's employment with the City, and shall be concluded as soon thereafter as reasonably possible. Manager agrees that any determination by the Council or City not to pay to Manager Severance Pay and Severance Benefits, or concerning the amount of Severance Pay and Severance Benefits, shall be final and shall not be subject to judicial review. Nothing set forth herein shall be deemed to confer upon Manager the right to have a hearing by Council concerning any proposed termination of Manager; provided, however, that Manager shall be entitled to a hearing solely concerning any proposal by the Council not to pay Manager the Severance Pay and RVPUBSWFLOYD \727026.1 2 • • Severance Benefits. (b) In the event Manager terminates his employment as Manager, then Manager shall give City at least six (6) weeks notice of termination in writing in advance of the date of termination, unless mutually agreed upon otherwise. If Manager resigns or retires voluntarily, then City shall have no obligation to pay Severance Pay and Severance Benefits to Manager. (c) Manager agrees that in the event Manager's employment is terminated, with or without cause, under no circumstances will Manager be entitled to contest the existence or nature of Manager's "at will" employment status, nor will Manager be entitled to seek or receive the remedy of reinstatement to employment with the City in any administrative or legal forum. Manager agrees that the sole issue for resolution upon termination of Manager's employment will be whether or not City is obligated to pay to Manager Severance Pay and Severance Benefits and/or the amount of Severance Pay and Severance Benefits due Manager. 3. SALARY Effective January 1, 2007, City agrees to pay Manager an annual base salary, exclusive of benefits, in the sum of $193,854.00 per year, or $16,154.50 per month, gross, payable in installments at the same time and by the same methods as other City employees are regularly paid. Effective January 1, 2008, Manager shall receive an increase in base salary equal to the actual percent increase in the Consumer Price Index — All Urban Consumers, for Los Angeles- Riverside - Orange County, California, as determined by the United States Department of Labor, Bureau of Labor Statistics for the 12 -month period ending December 31, 2007. Said salary increase shall be apart from any salary increases provided on the basis of merit as approved by the Council in its sole discretion, during the term of this Agreement. Nothing set forth herein shall prohibit the Council from reducing R V PUB\ W FLOYD\727026. I 3 the salary of Manager due to budgetary or similar constraints, on condition that any such reduction shall not exceed the average reduction applicable to all management employees of the City at the time of reduction in Manager's salary. Furthermore, Manager, in his sole discretion, may elect not to receive any salary increase provided hereunder; provided, however, if Manager elects not to receive a salary increase provided hereunder, said salary increase shall be subsequently implemented, on a prospective basis only, upon written request of Manager. 4. BENEFITS (a) Vacation Leave. Manager shall accrue vacation at the rate of 6.154 hours per two week period (or as otherwise adjusted generally for other management employees). (b) Sick Leave. Manager shall accrue sick leave at the rate for management employees as that may be adjusted from time to time. Accrued and unused sick leave shall not be subject to buy -back annually or upon termination. (c) Vehicle Allowance. Manager shall be provided an automobile by City for Manager's exclusive and unrestricted use. City shall be responsible for paying for liability, property damage and comprehensive liability insurance (subject to the condition, however, that the City Attorney first and continuously thereafter determines that is both lawful and feasible for the City to do so) and for the purchase, operation, maintenance, repair and regular replacement of said automobile. Manager shall be named as an "additional- insured" on any such comprehensive liability insurance policy, and such policy shall cover both professional and personal use of the automobile. (d) IRC 4401(a) Defined Contribution Plan. City shall contribute Eight Thousand Two Hundred Fifty Dollars ($8,250.00) per year, in equal monthly installments, to the IRC §401(a) defined contribution plan on RVPUBI WPLOV nkn7o26.1 4 Manager's behalf. Manager shall be responsible for all expenses associated with the IRC § 401(a) defined contribution plan including, but not limited to, administrative services fees, and commissions. (e) Supplemental Benefits. Except as provided otherwise herein, Manager shall receive any and all other supplemental benefits including, but not limited to, health, dental, life insurance, disability insurance, holidays, retirement benefits (PERS), physical examination, tuition reimbursement and long term disability, as are generally available to management employees of the City as provided by applicable City Resolutions and Personnel Rules. Except as otherwise provided herein, all actions undertaken by City relating to fringe benefits for management employees shall be considered actions affecting the same benefits applicable to Manager. As used herein, fringe benefits include, but are not limited to, vacation, sick leave, administrative leave, holiday pay, retirement (PERS) benefits and payments, health insurance, dental insurance, life insurance and long term disability insurance. City shall not at any time during the term of this Agreement reduce the base salary, compensation or other employment benefits of Manager, except as permitted by this Agreement. RVPUBIW FIAYDV27026.1 5 5. PROFESSIONAL DEVELOPMENT, OUTSIDE PROFESSIONAL ACTIVITIES AND GENERAL EXPENSES (a) Professional Development. (i) Subject to the Council's discretion to adopt and amend the budget, City agrees to pay for professional dues and subscriptions on behalf of Manager which are reasonably necessary, as determined by the Council, for the Manager's continuation and full participation in national, regional, state or local associations and organizations necessary and desirable for Manager's continued professional participation, growth and advancement, or for the good of the City. Furthermore, City shall pay for any additional professional dues and subscriptions as may be approved by the Council from time to time. (ii) Subject to the Council's discretion to adopt and amend the budget, City agrees to pay the travel and subsistence expenses of Manager for official travel, meetings and events reasonably necessary to continue the professional development of Manager and reasonably necessary to fulfill official and other functions for the City, all as determined to be reasonable and necessary by the Council. Such meetings and events shall include, but not be limited to, the annual International City Management Association meeting, meetings of the League of California Cities and other national, regional, state and local conferences of governmental groups and committees in which Manager serves as a member. (b) Outside Professional Activities. Manager agrees to remain in the exclusive employ of the City of Arcadia while employed by the City of Arcadia. The term "employed" however, shall not be construed to include occasional teaching, writing, speaking or consulting performed on his time off, even if outside compensation is provided for such services. Said activities are expressly allowed, provided that in no case is any activity allowed which would RVPUB \WFLOYD \727026.1 6 present a conflict of interest with, or detriment to, the City of Arcadia. In the event overnight travel is required for such non - employer- related business, the City Council shall be notified in advance. De minimis use of City equipment for such purposes is hereby authorized. (c) General Expenses. City recognizes that certain expenses of a non - personal and generally job - affiliated nature are incurred by the Manager, including participation in civic and other local organizations, and hereby agrees to reimburse or pay said general expenses. Subject to the Council's discretion to adopt and amend the budget, the City Treasurer (or other designated employee) is hereby authorized to disburse funds as needed to fulfill all provisions of this Agreement upon receipt of duly executed expense or petty cash vouchers, receipts, statements or personal affidavits. Subject to the Council's discretion to adopt and amend the budget, City will provide all equipment necessary for the completion of Manager's duties. This equipment shall include, but not be limited to, cellular telephone, pager, computers and other electronic devices deemed appropriate by Manager. City acknowledges and approves that certain personal use of this equipment may take place. Said equipment provided hereunder shall remain the property of the City and shall be returned to the City, along with all other City property in the possession of Manager, upon termination of employment. City shall bear full cost of any fidelity or other bonds required of Manager under any law or ordinance. 6. PERFORMANCE EVALUATION (a) The Council and Manager may annually define such goals and objectives for the City which they determine necessary for the proper operation of the City in the attainment of the Council's policy objectives, and the Council and RVPUB \W FLOYD1727026.1 7 Manager may further establish a priority among those various goals and objectives to be reduced to writing. The process of considering the establishment and priority of goals and objectives of the City shall be conducted and completed generally about January of each year. (b) The Council, following informal and nonbinding consultation with Manager, shall periodically establish goals and objectives regarding the performance of Manager. The Council shall review and evaluate the performance of Manager at least once annually. Notwithstanding any term or provision of this Agreement to the contrary, Manager shall serve at the will and pleasure of the Council, and the Council shall be entitled to terminate the employment of Manager without cause. (c) In recognition of the accomplishment of goals and objectives and excellent performance, a merit increase in salary and/or benefits of Manager may be granted to Manager by the Council. Nothing herein shall be deemed to change the "at will' employment status of Manager. 7. TERMS OF EMPLOYMENT The Council, following informal and nonbinding consultation with Manager, may by motion, resolution or written amendment to this Agreement approved as an official Council meeting agenda item, fix any other terms and conditions of employment as it may determine, from time to time, relating to the performance of Manager, provided such terms and conditions are not prohibited by the provisions of this Agreement, the Arcadia City Charter or any other rules or regulations of the City. R V PUB \W FIAYD1727026.1 8 • A 8. CONFLICT OF INTEREST PROHIBITION It is understood and agreed that because of the duties of Manager within and on behalf of the City of Arcadia and its citizenry, Manager shall not, during the term of this Agreement, individually, as a partner, joint venturer, officer or shareholder, invest or participate in any business venture conducting business in the corporate limits of the City of Arcadia, except for stock ownership in any company whose capital stock is publicly held and regularly traded, without prior approval of the City Council. For and during the term of this Agreement, Manager further agrees, except for a personal residence or residential property acquired or held for future use as his personal residence, not to invest in any other real estate or property improvements within the corporate limits of the City of Arcadia without the prior consent of the City Council. 9. ENTIRE AGREEMENT This Agreement contains the entire agreement between the parties concerning the subject matter set forth herein and no promise, representation, warranty or covenant not included in this Agreement has been or is relied upon by any party hereto concerning the offer and acceptance of employment described herein. 10. NO CONTINUING WAIVER No waiver of any term or condition of this Agreement by either party shall be deemed a continuing waiver of such term or condition. 11. EFFECTIVE DATE AND TERM The effective date of this Agreement shall be January 1, 2007. Subject to City's right to terminate Manager's employment at any time, the term of this Agreement is two (2) years from the effective date, and shall automatically renew itself for successive eighteen (18) month periods unless City notifies Manager of its intent to terminate this Agreement at least eighteen (18) months R V P UB\ W F LOYD \727026.1 N prior to the end of its two (2) year term or any successive eighteen (18) month term. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth hereinabove. CITY: Mayor oOhe City of Arcadia ATTEST: vl City Clerk City of Arcadia APPROVED AS TO FORM: P1)-� Stephen P. Deitsch City Attorney RV PUB \W FLOYD \727026.1 10 MANAGER: -MLIA 0100q William R Kelly . r V1_. DATE: February 20, 2007 TO: Mayor and City Council FROM: Stephen P. Deitsch, City Attorney STAFF REPORT Office of the City Attorney SUBJECT: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF ARCADIA AND WILLIAM R. KELLY Recommendation: Approve SUMMARY The City Council performs an annual evaluation of the City Manager as provided in his Employment Agreement. This year's evaluation was performed in closed sessions at recent City Council meetings in accordance with the Ralph M. Brown Act. Following this evaluation, certain modifications are proposed for the City Manager's Employment Agreement. These changes are outlined below and in the attached proposed Employment Agreement that is now presented for approval. DISCUSSION On August 3, 1994 the City Council entered into an Employment Agreement with William R. Kelly, City Manager. In January of this year, the City Council conducted the annual evaluation of the City Manager. Based upon this evaluation, as well as related negations with the City Manager, new terms and conditions of employment are proposed. The specific issues being modified are: Salary -The salary shall be based upon the 60`6 percentile for City Managers consistent with the cities utilized for all executives and managers in the City of Arcadia. The new annual salary shall be $193,854.00, effective January 1, 2007. Effective January 1, 2008 there shall be a salary increase equal to the actual percent increase in the Consumer Price Index, as provided in the attached Employment Agreement. 2. Defined Contribution Plan -As provided in the attached document, effective January 1, 2007 the City will contribute $8,250.00 per year to the 401(a) Plan. Page 1 of 2 Mayor and City Council February 20, 2007 Page 2 The effective date of the Employment Agreement is January 1, 2007 and the term of the Agreement is "evergreen" for eighteen consecutive months. RECOMMENDATION It is recommended that the City Council approve the attached Employment Agreement between the City of Arcadia and William R. Kelly, and authorize and direct the Mayor to execute the Agreement on behalf of the City. Attachment Page 2 of 2 11o0_,.5-O G021t{(�' EMPLOYMENT AGREEMENT This Agreement between the City of Arcadia ( "City ") and William R. Kelly ( "Manager ") is made this 1St day of January, 2005. RECITALS A. City desires to continue to employ William R. Kelly as the City Manager of the City of Arcadia as provided by the Arcadia City Charter Section 600 et seq. and the terms and conditions set out herein. B. Manager desires to continue to serve as City Manager of the City of Arcadia on the terms and conditions set out herein. AGREEMENT NOW, THEREFORE, the parties agree as follows on the terms and conditions of Manager's employment. 1. DUTIES City hereby employs Manager, and Manager hereby accepts employment, as City Manager of the City. Manager shall perform the functions and duties specified for the City Manager of the City in the Arcadia City Charter Section 601 and other ordinances, resolutions and policies of the City and to perform such other legally permissible and proper duties and functions as the City Council of the City (the "Council ") may from time to time assign, consistent with the Arcadia City Charter and other applicable law. Pursuant to Arcadia City Charter Section 600, Manager shall at all times serve at the will and pleasure of the Council (" 'at will' employment status "). I RVPUB\W WP6914342 2. SEVERANCE AND SEVERANCE PAY AND BENEFITS (a) In the event that. Manager is involuntarily terminated by the Council or a "negotiated settlement" for voluntary termination is approved by the Council, City agrees to pay Manager within fifteen (15) days of the later to occur of (i) the date of termination of employment or (ii) the date of final determination by the Council of the matters subject to a hearing as set forth in this paragraph, a lump sum cash payment ( "Severance Pay ") equal to eighteen (18) months of the base salary Manager is receiving on the date of the Council's action to terminate Manager, less legally required or authorized deductions. City shall also continue the health benefits being provided to Manager at the time of termination for the period of Severance Pay or until Manager finds other employment, whichever occurs first ( "Severance Benefits "). However, in the event Manager is terminated due to the reasonable determination of the Council, based upon the weight of the evidence produced at a hearing conducted by the Council, that Manager has committed either (i) any illegal act involving personal gain to Manager, (ii) gross negligence or (iii) malfeasance, then, and in that event, City shall have no obligation to pay the Severance Pay and Severance Benefits. Any hearing conducted by the Council for the purposes set forth in this paragraph shall be commenced within thirty days following the date of termination of Manager's employment with the City, and shall be concluded as soon thereafter as reasonably possible. Manager agrees that any determination by the Council or City not to pay to Manager Severance Pay and Severance Benefits, or concerning the amount of Severance Pay and Severance Benefits, shall be final and shall not be subject to judicial review. Nothing set forth herein shall be deemed to confer upon Manager the right to have a hearing by Council concerning any proposed termination of Manager; provided, however, that Manager shall be entitled to a hearing solely concerning any proposal by the Council not to pay Manager the Severance Pay and RV PUB%W W F691434.2 0 Severance Benefits. 0 (b) In the event Manager terminates his employment as Manager, then Manager shall give City at least six (6) weeks notice of termination in writing in advance of the date of termination, unless mutually agreed upon otherwise. If Manager resigns or retires voluntarily, then City shall have no obligation to pay Severance Pay and Severance Benefits to Manager. (c) Manager agrees that in the event Manager's employment is terminated, with or without cause, under no circumstances will Manager be entitled to contest the existence or nature of Manager's "at will" employment status, nor will Manager be entitled to seek or receive the remedy of reinstatement to employment with the City in any administrative or legal forum. Manager agrees that the sole issue for resolution upon termination of Manager's employment will be whether or not City is obligated to pay to Manager Severance Pay and Severance Benefits and/or the amount of Severance Pay and Severance Benefits due Manager. 3. SALARY City agrees to pay Manager an annual base salary, exclusive of benefits, in the sum of $158,800 per year or $13,234 per month gross, payable in installments at the same time and by the same methods as other City employees are regularly paid. Effective July 1, 2005, Manager shall receive a base salary increase to the sixtieth (60 %) percentile of City Managers measured in the Labor Market Data Report completed by Johnson and Associates in spring of 2005. Effective July 1, 2006, Manager shall receive an increase in base salary equal to the actual percent increase in the Consumer Price Index — All Urban Consumers, for Los Angeles- Riverside - Orange County, California, as determined by the United States Department of Labor, Bureau of Labor Statistics for the 12 -month period ending December 31, 2005. Said salary increase(s) shall be apart from any RVPUBIWWFW914341 • salary increases provided on the basis of merit as approved by the Council in its sole discretion, during the term of this Agreement. Nothing set forth herein shall prohibit the Council from reducing the salary of Manager due to budgetary or similar constraints, on condition that any such reduction shall not exceed the average reduction applicable to all management employees of the City at the time of reduction in Manager's salary. Furthermore, Manager, in his sole discretion, may elect not to receive any salary increase provided hereunder; provided, however, if Manager elects not to receive a salary increase provided hereunder, said salary increase shall be subsequently implemented, on a prospective basis only, upon written request of Manager. 4. BENEFITS (a) Vacation Leave. Manager shall accrue vacation at the rate of 6.154 hours per two week period (or as otherwise adjusted generally for other management employees). (b) Sick Leave. Manager shall accrue sick leave at the rate for management employees as that may be adjusted from time to time. Accrued and unused sick leave shall not be subject to buy -back annually or upon termination. (c) Vehicle Allowance. Manager shall be provided an automobile by City for Manager's exclusive and unrestricted use. City shall be responsible for paying for liability, property damage and comprehensive liability insurance (subject to the condition, however, that the City Attorney first and continuously thereafter determines that is both lawful and feasible for the City to do so) and for the purchase, operation, maintenance, repair and regular replacement of said automobile. Manager shall be named as an "additional- insured" on any such comprehensive liability insurance policy, and such policy shall cover both professional and personal use of the automobile. RV PUB%W W Ft91434.2 • • (d) IRC 6401(a) Defined Contribution Plan. City shall continue to contribute Fourteen Thousand Five Hundred Dollars ($14,500) per year, in equal monthly installments, to the IRC §401(a) deferred contribution plan on Manager's behalf. Effective January 1, 2005, City's contribution shall increase to Fifteen Thousand Five Hundred Dollars ($15,500) per year, in equal monthly installments; and, effective January 1, 2006, City's contribution shall increase to Sixteen Thousand Dollars ($16,500) per year, in equal monthly installments. Manager shall be responsible for all expenses associated with the IRC § 401(a) defined contribution plan including, but not limited to, administrative services fees, and commissions. (e) Supplemental Benefits. Except as provided otherwise herein, Manager shall receive any and all other supplemental benefits including, but not limited to, health, dental, life insurance, disability insurance, holidays, retirement benefits (PERS), physical examination, tuition reimbursement and long term disability, as are generally available to management employees of the City as provided by applicable City Resolutions and Personnel Rules. Except as otherwise provided herein, all actions undertaken by City relating to fringe benefits for management employees shall be considered actions affecting the same benefits applicable to Manager. As used herein, fringe benefits include, but are not limited to, vacation, sick leave, administrative leave, holiday pay, retirement (PERS) benefits and payments, health insurance, dental insurance, life insurance and long term disability insurance. City shall not at any time during the term of this Agreement reduce the base salary, compensation or other employment benefits of Manager, except as permitted by this Agreement. RVPUB%W W FY91434 C1 • 5. PROFESSIONAL DEVELOPMENT, OUTSIDE PROFESSIONAL ACTIVITIES AND GENERAL EXPENSES (a) Professional Development. (i) Subject to the Council's discretion to adopt and amend the budget, City agrees to pay for professional dues and subscriptions on behalf of Manager which are reasonably necessary, as determined by the Council, for the Manager's continuation and full participation in national, regional, state or local associations and organizations necessary and desirable for Manager's continued professional participation, growth and advancement, or for the good of the City. Furthermore, City shall pay for any additional professional dues and subscriptions as may be approved by the Council from time to time. (ii) Subject to the Council's discretion to adopt and amend the budget, City agrees to pay the travel and subsistence expenses of Manager for official travel, meetings and events reasonably necessary to continue the professional development of Manager and reasonably necessary to fulfill official and other functions for the City, all as determined to be reasonable and necessary by the Council. Such meetings and events shall include, but not be limited to, the annual International City Management Association meeting, meetings of the League of California Cities and other national, regional, state and local conferences of governmental groups and committees in which Manager serves as a member. (b) Outside Professional Activities. Manager agrees to remain in the exclusive employ of the City of Arcadia while employed by the City of Arcadia. The term "employed" however, shall not be construed to include occasional teaching, writing, speaking or consulting performed on his time off, even if outside compensation is provided for such services. Said activities are expressly allowed, provided that in no case is any activity allowed which would RVPUB \W WFb91434.2 0 present a conflict of interest with, or detriment to, the City of Arcadia. In the event overnight travel is required for such non - employer- related business, the City Council shall be notified in advance. De minimis use of City equipment for such purposes is hereby authorized. (c) General Exnenses. City recognizes that certain expenses of a non - personal and generally job - affiliated nature are incurred by the Manager, including participation in civic and other local organizations, and hereby agrees to reimburse or pay said general expenses. Subject to the Council's discretion to adopt and amend the budget, the City Treasurer (or other designated employee) is hereby authorized to disburse funds as needed to fulfill all provisions of this Agreement upon receipt of duly executed expense or petty cash vouchers, receipts, statements of personal affidavits. Subject to the Council's discretion to adopt and amend the budget, City will provide all equipment necessary for the completion of Manager's duties. This equipment shall include, but not be limited to, cellular telephone, pager, computers and other electronic devices deemed appropriate by Manager. City acknowledges and approves that certain personal use of this equipment may take place. Said equipment provided hereunder shall remain the property of the City and shall be returned to the City, along with all other City property in the possession of Manager, upon termination of employment. City shall bear full cost of any fidelity or other bonds required of Manager under any law or ordinance. 6. PERFORMANCE EVALUATION (a) The Council and Manager may annually define such goals and objectives for the City which they determine necessary for the proper operation of the City in the attainment of the Council's policy objectives, and the Council and RVPUBIW WF1691434.2 • 0 Manager may further establish a priority among those various goals and objectives to be reduced to writing. The process of considering the establishment and priority of goals and objectives of the City shall be conducted and completed generally about January of each year. (b) The Council, following informal and nonbinding consultation with Manager, shall periodically establish goals and objectives regarding the performance of Manager. The Council shall review and evaluate the performance of Manager at least once annually. Notwithstanding any term or provision of this Agreement to the contrary, Manager shall serve at the will and pleasure of the Council, and the Council shall be entitled to terminate the employment of Manager without cause. (c) In recognition of the accomplishment of goals and objectives and excellent performance, a merit increase in salary and/or benefits of Manager may be granted to Manager by the Council. Nothing herein shall be deemed to change the "at will" employment status of Manager. 7. TERMS OF EMPLOYMENT The Council, following informal and nonbinding consultation with Manager, may by motion, resolution or written amendment to this Agreement approved as an official Council meeting agenda item, fix any other terms and conditions of employment as it may determine, from time to time, relating to the performance of Mapager, provided such terms and conditions are not prohibited by the provisions of this Agreement, the Arcadia City Charter or any other rules or regulations of the City. RVPUB \W WFb91434.2 8. CONFLICT OF INTEREST PROHIBITION It is understood and agreed that because of the duties of Manager within and on behalf of the City of Arcadia and its citizenry, Manager shall not, during the term of this Agreement, individually, as a partner, joint venturer, officer or shareholder, invest or participate in any business venture conducting business in the corporate limits of the City of Arcadia, except for stock ownership in any company whose capital stock is publicly held and regularly traded, without prior approval of the City Council. For and during the term of this Agreement, Manager further agrees, except for a personal residence or residential property acquired or held for future use as his personal residence, not to invest in any other real estate or property improvements within the corporate limits of the City of Arcadia without the prior consent of the,City Council. 9. ENTIRE AGREEMENT This Agreement contains the entire agreement between the parties concerning the subject matter set forth herein and no promise, representation, warranty or covenant not included in this Agreement has been or is relied upon by any party hereto concerning the offer and acceptance of employment described herein. 10. NO CONTINUING WAIVER No waiver of any term or condition of this Agreement by either party shall be deemed a continuing waiver of such term or condition. 11. EFFECTIVE DATE AND TERM The effective date of this Agreement shall be January 1, 2005. Subject to City's right to terminate Manager's employment at any time, the term of this Agreement is two (2) years from the effective date, and shall automatically renew itself for successive eighteen (18) month periods unless City notifies Manager of its intent to terminate this Agreement at least eighteen (18) months RVPUB \W WFK91434.2 d prior to the end of its two (2) year term or any successive eighteen (18) month term. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth hereinabove. CITY: MANAGER: City of Arcadia William R. Kelly /1 City of Arcadia APPROVED AS TO FORM: Stephen P. Deitsch City Attorney RVPUB \W WF\691434.2 DATE: May 3, 2005 TO: Mayor and City Council FROM: Stephen P. Deitsch, City Attorne�P SUBJECT: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF ARCADIA AND WILLIAM R. KELLY Recommendation: Approve SUMMARY As required by the City Manager's Employment Agreement, the City Council performs an annual evaluation of the City Manager. This year's evaluation was performed in closed session at recent City Council meetings, in accordance with the Ralph M. Brown Act. Based upon the evaluation and consistent with the Agreement, certain modifications are proposed for the City Manager's Employment Agreement. These changes are outlined below and in the attached new proposed Employment Agreement. DISCUSSION On August 3, 1994 the City Council entered into an Employment Agreement with William R. Kelly, City Manager. Since 1994, the City Council has periodically approved certain amendments to the Agreement. During the period of January through March 2005, the City Council met in closed session to complete the annual evaluation of the City Manager. Based upon the evaluation, as well as related negotiations with the City Manager concerning certain contractual provisions, the following changes are proposed: A change in State law necessitates a modification of the terms of the section of the Employment Agreement concerning severance pay and benefits. The present Agreement calls for twelve (12) months severance and payment for all fringe benefits (health insurance, retirement, deferred compensation long -term disability, vacation, vehicle allowance, etc.). With the change in State law, the money that would have been expended on benefits must be converted to salary. To achieve equality, the length of severance is changed from twelve (12) months to eighteen (18) months. The actual cost to the City remains the same. The City Manager's salary shall be modified based upon the 60th percentile for City Managers in the survey completed by Johnson and Associates in the spring of 2005. Any potential increase shall be effective July 1, 2005. Mayor and City Council -City Manager Employment Agreement May 3, 2005 Page 2 Effective July 1, 2006 the City Manager's salary shall be adjusted in accordance with the change in the Consumer Price Index for the prior calendar year. The City shall commit to an additional $1,000 annual deferred compensation payment for the term of the Agreement - one due January 1, 2005 and one due January 1, 2006. The effective date of the amended Agreement is January 1, 2005 and the term is "evergreen" for eighteen successive months. RECOMMENDATION It is recommended that the City Council approve the attached Employment Agreement between the City of Arcadia and William R. Kelly and authorize the Mayor to execute the Agreement on behalf of the City. Attachment i . 7 y % .ec. AMENDMENT NO. 1 TO CITY MANAGER EMPLOYMENT AGREEMENT This Amendment No. 1 ( "Amendment No. 1 ") is entered into this 19th day of February, 2003 by and between the City of Arcadia ( "City") and William R. Kelly ( "Manager ") with respect to that certain Employment Agreement ( "Agreement') between City, and Manager dated March 27, 2001. City and Manager agree as follows: (1) Amendment of Section 3 of the Agreement Concerning Salary. Section 3 of the Agreement entitled "Salary" is hereby amended by adding thereto after the second sentence and prior to the third sentence the following: "Effective January 1, 2003, City agrees to pay Manager an annual base salary, exclusive of benefits, in the sum of $156,000 or $13,000 per month gross, payable in installments at the same time and by the same methods as other City employees are regularly paid. Effective January 1, 2004, Manager shall receive an increase in base salary equal to the actual percent increase in the Consumer Price Index -All Urban Consumers, for Los Angeles- Riverside- Orange County, California, as determined by the United States Department of Labor, Bureau of Labor Statistics for the 12 -month period ending December 31, 2003." (2) Amendment of Section 4(d) of the Agreement Concerning Deferred Compensation and Retirement Plans Section 4(d) of the Agreement entitled "IRC § 457 Plan and IRC § 401(a) Defined Contribution Plan" is hereby amended by adding the following thereto: "Effective January 1, 2003, Manager alone shall be responsible for making any and all payments, if any, to the IRC Section 457 Plan, and City shall have no further obligation to do so. Further, effective January 1, 2003, in lieu of the annual payment of Three Thousand Dollars ($3,000), City shall pay the sum of Eleven Thousand LASER IMAGED M Five Hundred Dollars ($11,500) per year, in equal monthly installments, to the IRC Section 401(a) defined contribution plan on Manager's behalf." "Effective January 1, 2004, in lieu of the annual payment of Eleven Thousand Five Hundred Dollars ($11,500), City shall pay the sum of Fourteen Thousand Five Hundred Dollars ($14,500) per year, in equal monthly installments, to the IRC Section 401(a) defined contribution plan on Manager's behalf." (3) Effective Date of Amendment No. 1. The effective date of this Amendment No. 1 shall be January 1, 2003. All terms and provisions of the Agreement not amended by this Amendment No. 1 are hereby ratified by City and Manager and shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of the date first set forth hereinabove. CITY: A - " Mayor, City of Arcadia ATTEST:' `rn 3 Clerk APPROVED -AS TO FORM: Stephen P. Deitsch City Attorney MANAGER: Ak 2G#m William R. Kelly EMPLOYMENT AGREEMENT This Agreement between the City of Arcadia ( "City ") and William R. Kelly ( "Manager ") is made this 27th day of March 2001. RECITALS A. City desires to continue to employ William R. Kelly as the City Manager of the City of Arcadia as provided by the Arcadia City Charter Section 600 et seq. and the terms and conditions set out herein. B. Manager desires to continue to serve as City Manager of the City of Arcadia on the terms and conditions set out herein. AGREEMENT NOW, THEREFORE, the parties agree as follows on the terms and conditions of Manager's employment. 1. DUTIES City hereby employs Manager, and Manager hereby accepts employment, as City Manager of the City. Manager shall perform the functions and duties specified for the City Manager of the City in the Arcadia City Charter Section 601 and other ordinances, resolutions and policies of the City and to perform such other legally permissible and proper duties and functions as the City Council of the City (the "Council ") may from time to time assign, consistent with the Arcadia City Charter and other applicable law. Pursuant to Arcadia City Charter Section 600, Manager shall at all times serve at the will and pleasure of the Council (" 'at will' employment status "). 0 0 2. SEVERANCE AND SEVERANCE PAY AND BENEFITS (a) In the event that Manager is involuntarily terminated by the Council or a "negotiated settlement" for voluntary termination is approved by the Council, City agrees to pay Manager within fifteen (15) days of the later to occur of (i) the date of termination of employment or (ii) the date of final determination by the Council of the matters subject to a hearing as set forth in this paragraph, a lump sum cash payment ( "Severance Pay ") equal to twelve (12) months salary based upon the rate of pay Manager is receiving on the date of the Council's action to terminate Manager, plus the value of fringe benefits granted to Manager by the Council for full family medical and dental benefits, retirement benefits (PERS), deferred compensation benefits, long term disability, life insurance, the value of accrued and unused vacation leave based upon Manager's salary plus the value of vacation leave that would have accrued to Manager during the twelve (12) Month Severance Pay period absent the termination of Manager's employment, and vehicle allowance ( "Severance Benefits "). In lieu of paying to Manager as part of Severance Benefits the cash value of one or more of the foregoing fringe benefits (other than accrued vacation), City may in its discretion maintain such benefits in effect for the Severance Pay period. However, in the event Manager is terminated due to the reasonable determination of the Council, based upon the weight of the evidence produced at a hearing conducted by the Council, that Manager has committed either (i) any illegal act involving personal gain to Manager, (ii) gross negligence or (iii) malfeasance, then, and in that event, City shall have no obligation to pay the Severance Pay and Severance Benefits. Any hearing conducted by the Council for the purposes set forth in this paragraph shall be commenced within thirty days following the date of termination of Manager's employment with the City, and shall be concluded as soon thereafter as reasonably possible. Manager agrees that any determination by the Council or City not to pay 2 to Manager Severance Pay and Severance Benefits, or concerning the amount of Severance Pay and Severance Benefits, shall be final and shall not be subject to judicial review. Nothing set forth herein shall be deemed to confer upon Manager the right to have a hearing by Council concerning any proposed termination of Manager; provided, however, that Manager shall be entitled to a hearing solely concerning any proposal by the Council not to pay Manager the Severance Pay and Severance Benefits. (b) In the event Manager terminates his employment as Manager, then Manager shall give City at least six (6) weeks notice of termination in writing in advance of the date of termination, unless mutually agreed upon otherwise. If Manager resigns voluntarily, then City shall have no obligation to pay Severance Pay and Severance Benefits to Manager. (c) Manager agrees that in the event Manager's employment is terminated, with our without cause, under no circumstances will Manager be entitled to contest the existence or nature of Manager's "at will" employment status, nor will Manager be entitled to seek or receive the remedy of reinstatement to employment with the City in any administrative or legal forum. Manager agrees that the sole issue for resolution upon termination of Manager's employment will be whether or not City is obligated to pay to Manager Severance Pay and Severance Benefits and/or the amount of Severance Pay and Severance Benefits due Manager. 3. SALARY City agrees to pay Manager an annual base salary, exclusive of benefits, in the sum of $141,264 or $11,772 per month gross, payable in installments at the same time and by the same methods as other City employees are regularly paid. Effective January 1, 2002, Manager shall receive a three percent (3 %) base salary increase. Said salary increase shall be apart from any salary 3 0 0 increases provided on the basis of merit as approved by the Council in its sole discretion, during the term of this Agreement. Nothing set forth herein shall prohibit the Council from reducing the salary of Manager due to budgetary or similar constraints, on condition that any such reduction shall not exceed the average reduction applicable to all management employees of the City at the time of reduction in Manager's salary. 4. BENEFITS (a) Vacation Leave. Manager shall accrue vacation at the rate of 6.154 hours per two week period (or as otherwise adjusted generally for other management employees). (b) Sick Leave. Manager shall accrue sick leave at the rate for management employees as that may be adjusted from time to time. Accrued and unused sick leave shall not be subject to buy -back annually or upon termination. (c) Vehicle Allowance. Manager shall be provided an automobile by City for Manager's exclusive and unrestricted use. City shall be responsible for paying for liability, property damage and comprehensive liability insurance (subject to the condition, however, that the City Attorney first and continuously thereafter determines that is both lawful and feasible for the City to do so) and for the purchase, operation, maintenance, repair and regular replacement of said automobile. Manager shall be named as an "additional- insured" on any such comprehensive liability insurance policy, and such policy shall cover both professional and personal use of the automobile. For purposes of the calculation of Severance Pay and Severance Benefits under Section 2 of this Agreement, the benefits conferred upon Manager pursuant to this paragraph (c) shall in the aggregate constitute Manager's vehicle allowance, and such vehicle allowance shall be deemed to have a value equal to five hundred dollars ($500.00) per month. 4 (d) IRC 457 Plan and IRC 4401(a) Defined Contribution Plan. City shall contribute, on Manager's behalf, in equal monthly installments, Eight Thousand Five Hundred Dollars ($8,500) per year or the maximum allowable legal annual contribution, whichever is less to an IRC § 457 Plan. Further, City agrees to establish an IRC §401(a) defined contribution plan to which Manager may make contributions in accordance with applicable law. City shall pay up to One Thousand Five Hundred Dollars ($1,500.00) one time money for startup expenses of the IRC § 401(a) defined contribution plan. Manager shall be responsible for all other expenses associated with the IRC § 401(a) defined contribution plan including, but not limited to, additional startup expenses in excess of One Thousand Five Hundred Dollars ($1,500.00), administrative services fees, and commissions. Effective January 1, 2002, City shall contribute Three Thousand Dollars ($3,000) per year, in equal monthly installments, to the IRC §401(a) defined contribution plan on Manager's behalf. (e) Supplemental Benefits. Except as provided otherwise herein, Manager shall receive any and all other supplemental benefits including, but not limited to, health, dental, life insurance, disability insurance, holidays, retirement benefits (PERS), physical examination, tuition reimbursement and long term disability, as are generally available to management employees of the City as provided by applicable City Resolutions and Personnel Rules. Except as otherwise provided herein, all actions undertaken by City relating to fringe benefits for management employees shall be considered actions affecting the same benefits applicable to Manager. As used herein, fringe benefits include, but are not limited to, vacation, sick leave, administrative leave, holiday pay, retirement (PERS) benefits and payments, health insurance, dental insurance, life insurance and long term disability insurance. E 0 City shall not at any time during the term of this Agreement reduce the base salary, compensation or other employment benefits of Manager, except as permitted by this Agreement. 5. PROFESSIONAL DEVELOPMENT, OUTSIDE PROFESSIONAL ACTIVITIES AND GENERAL EXPENSES (a) Professional Development. (i) Subject to the Council's discretion to adopt and amend the budget, City agrees to pay for professional dues and subscriptions on behalf of Manager which are reasonably necessary, as determined by the Council, for the Manager's continuation and full participation in national, regional, state or local associations and organizations necessary and desirable for Manager's continued professional participation, growth and advancement, or for the good of the City. Furthermore, City shall pay for any additional professional dues and subscriptions as may be approved by the Council from time to time. (ii) Subject to the Council's discretion to adopt and amend the budget, City agrees to pay the travel and subsistence expenses of Manager for official travel, meetings and events reasonably necessary to continue the professional development of Manager and reasonably necessary to fulfill official and other functions for the City, all as determined to be reasonable and necessary by the Council. Such meetings and events shall include, but not be limited to, the annual International City Management Association meeting, meetings of the League of California Cities and other national, regional, state and local conferences of governmental groups and committees in which Manager serves as a member. (b) Outside Professional Activities. Manager agrees to remain in the exclusive employ of the City of Arcadia while employed by the City of Arcadia. The term "employed" however, shall not be construed to include occasional teaching, writing, speaking or consulting performed on his time off, even if outside compensation is provided for such services. Said activities are expressly allowed, provided that in no case is any activity allowed which would present a conflict of interest with, or detriment to, the City of Arcadia. In the event overnight travel is required for such non - employer - related business, the City Council shall be notified in advance. De minimis use of City equipment for such purposes is hereby authorized. (c) General Expenses. City recognizes that certain expenses of a non - personal and generally job - affiliated nature are incurred by the Manager, including participation in civic and other local organizations, and hereby agrees to reimburse or pay said general expenses. Subject to the Council's discretion to adopt and amend the budget, the City Treasurer (or other designated employee) is hereby authorized to disburse funds as needed to fulfill all provisions of this Agreement upon receipt of duly executed expense or petty cash vouchers, receipts, statements or personal affidavits. Subject to the Council's discretion to adopt and amend the budget, City will provide all equipment necessary for the completion of Manager's duties. This equipment shall include, but not be limited to, cellular telephone, pager, computers and other electronic devices deemed appropriate by Manager. City acknowledges and approves that certain personal use of this equipment may take place. Said equipment provided hereunder shall remain the property of the City and shall be returned to the City, along with all other City property in the possession of Manager, upon termination of employment. ►i City shall bear full cost of any fidelity or other bonds required of Manager under any law or ordinance. 6. PERFORMANCE EVALUATION (a) The Council and Manager may annually define such goals and objectives for the City which they determine necessary for the proper operation of the City in the attainment of the Council's policy objectives, and the Council and Manager may further establish a priority among those various goals and objectives to be reduced to writing. The process of considering the establishment and priority of goals and objectives of the City shall be conducted and completed generally about January of each year. (b) The Council, following informal and nonbinding consultation with Manager, shall periodically establish goals and objectives regarding the performance of Manager. The Council shall review and evaluate the performance of Manager at least once annually. Notwithstanding any term or provision of this Agreement to the contrary, Manager shall serve at the will and pleasure of the Council, and the Council shall be entitled to terminate the employment of Manager without cause. (c) In recognition of the accomplishment of goals and objectives and excellent performance, a merit increase in salary and /or benefits of Manager may be granted to Manager by the Council. Nothing herein shall be deemed to change the "at will" employment status of Manager. 7. TERMS OF EMPLOYMENT The Council, following informal and nonbinding consultation with Manager, may by motion, resolution or written amendment to this Agreement approved as an official Council meeting agenda item, fix any other terms and conditions of employment as it may determine, from time to time, relating to the performance of Manager, provided such terms and conditions are not prohibited by 8 the provisions of this Agreement, the Arcadia City Charter or any other rules or regulations of the City. 8. CONFLICT OF INTEREST PROHIBITION It is understood and agreed that because of the duties of Manager within and on behalf of the City of Arcadia and its citizenry, Manager shall not, during the term of this Agreement, individually, as a partner, joint venturer, officer or shareholder, invest or participate in any business venture conducting business in the corporate limits of the City of Arcadia, except for stock ownership in any company whose capital stock is publicly held and regularly traded, without prior approval of the City Council. For and during the term of this Agreement, Manager further agrees, except for a personal residence or residential property acquired or held for future use as his personal residence, not to invest in any other real estate or property improvements within the corporate limits of the City of Arcadia without the prior consent of the City Council. 9. ENTIRE AGREEMENT This Agreement contains the entire agreement between the parties concerning the subject matter set forth herein and no promise, representation, warranty or covenant not included in this Agreement has been or is relied upon by any party hereto concerning the offer and acceptance of employment described herein. 10. NO CONTINUING WAIVER No waiver of any term or condition of this Agreement by either party shall be deemed a continuing waiver of such term or condition. 11. EFFECTIVE DATE AND TERM The effective date of this Agreement shall be January 1, 2001. Subject to City's right to terminate Manager's employment at any time, the term of this Agreement is two (2) years from the effective date, and shall automatically 0 0 renew itself for a successive one (1) year period unless City notifies Manager of its intent to terminate this Agreement at least twelve (12) months prior to the end of its two (2) year term or any successive one (1) year term. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth hereinabove. CITY: ATTEST: Cify Clerk City of Arcadi APPROVED AS TO FORM: �� P, 46 F44.i Stephen P. Deitsch City Attorney 10 MANAGER: . =A William R. Kelly EMPLOYMENT AGREEMENT This Agreement between the City of Arcadia ("City") and William R. Kelly ( "Manager ") is made this � day of 'i G vt77 1994. RECITALS A. City desires to employ William R. Kelly as the City Manager of the City of Arcadia as provided by the Arcadia City Charter Section 600 et seq. and the terms and conditions set out herein. B. Manager desires to serve as City Manager of the City of Arcadia on the terms and conditions set out herein. AGREEMENT NOW, THEREFORE, the parties agree as follows on the terms and conditions of Manager's employment. 1. DUTIES City hereby employs Manager, and Manager hereby accepts employment, as City Manager of the City. Manager shall perform the functions and duties specified for the City Manager of the City in the Arcadia City Charter Section 601 and other ordinances, resolutions and policies of the City and to perform such other legally permissible and proper duties and functions as the City Council of the City (the "Council ") may from time to time assign, SPD39417 consistent with the Arcadia City Charter and other applicable law. Pursuant to Arcadia City Charter Section 600, Manager shall at all times serve at the will and pleasure of the Council ( "'at will' employment status "). 2. SEVERANCE AND SEVERANCE PAY (a) In the event that Manager is involuntarily terminated by the Council or a "negotiated settlement" for voluntary termination is approved by the Council, City agrees to pay Manager within fifteen (15) days of the later to occur of (i) the date of termination of employment and (ii) the date of final determination by the Council of the matters subject to a hearing as set forth in this paragraph, a lump sum cash payment ( "Severance Pay ") equal to six (6) months aggregate salary based upon the rate of pay Manager is receiving on the date of the Council's action to terminate Manager, plus the prorated value applicable to the Severance Pay Calculation Period, as hereinafter defined, of fringe benefits granted to Manager by the Council for full family medical and dental benefits, retirement benefits (PERS), long term disability, life insurance, the value of accrued and unused vacation leave based upon Manager's salary plus the value of vacation leave that would have accrued to Manager during the Severance Pay Calculation Period absent the termination of Manager's employment, and vehicle allowance. In lieu of prorating and paying to Manager as part of Severance Pay the value of one or more of the foregoing fringe benefits (other than accrued vacation), City may in its discretion maintain such benefits in effect for the Severance Pay Calculation Period, as hereinafter SPD39417 - 2 - defined. However, in the event Manager is terminated due to the reasonable determination of the Council, based upon the weight of the evidence produced at a hearing conducted by the Council, that Manager has committed either (i) any illegal act involving personal gain to Manager, (ii) gross negligence or (iii) malfeasance, then, and in that event, City shall have no obligation to pay the Severance Pay. Any hearing conducted by the Council for the purposes set forth in this paragraph shall be commenced within thirty days following the date of termination of Manager's employ- ment with the City, and shall be concluded as soon thereafter as reasonably possible. Manager agrees that any determination by the Council or City not to pay to Manager Severance Pay, or concerning the amount of Severance Pay, shall be final and shall not be subject to judicial review. Nothing set forth herein shall be deemed to confer upon Manager the right to have a hearing by Council concerning any proposed termination of Manager; provided, however, that Manager shall be entitled to a hearing solely concerning any proposal by the Council not to pay Manager the Severance Pay. After the first anniversary of the effective date of this Agreement, the period of aggregate salary and prorated value of fringe benefits for purposes of calculation of Severance Pay (the "Severance Pay Calculation Period ") shall be seven (7) months; after the second anniversary of the effective date of this Agreement, the Severance Pay Calculation Period shall be eight (8) months; and after the third anniversary of the effective date of this Agreement, the Severance Pay Calculation Period shall be nine SPD39417 - 3 - (9) months. The Severance Pay Calculation Period shall remain at nine (9) months thereafter. (b) In the event Manager terminates his employment as Manager, then Manager shall give City at least six (6) weeks notice of termination in writing in advance of the date of termination, unless mutually agreed upon otherwise. If Manager resigns voluntarily, then City shall have no obligation to pay Severance Pay to Manager. (c) Manager agrees that in the event Manager's employ- ment is terminated, with or without cause, under no circumstances will Manager be entitled to contest the existence or nature of Manager's "at will" employment status, nor will Manager be entitled to seek or receive the remedy of reinstatement to employment with the City in any administrative or legal forum. Manager agrees that the sole issue for resolution upon termination of Manager's employment will be whether or not City is obligated to pay to Manager Severance Pay and /or the amount of Severance Pay due Manager. 3. SALARY For each annual period following the effective date of this Agreement, City agrees to pay Manager a salary, exclusive of benefits, in the sum of $110,016 or $9,168 per month gross, payable in installments at the same time and by the same methods as other City employees are regularly paid. This payment shall be apart from any salary increases provided on the basis of merit as approved by the Council. Annual salary increases provided by agreement across the board to management employees of the City SPD39417 - 4 - shall be automatically accorded to Manager. Nothing set forth herein shall prohibit the Council from reducing the salary of Manager due to budgetary or similar constraints, on condition that any such reduction shall not exceed the average reduction applicable to all management employees of the City at the time of reduction in Manager's salary. 4. BENEFITS (a) Vacation Leave. Commencing on the effective date of this Agreement, Manager shall accrue vacation at the rate of 5.231 hours per two week period. Commencing two (2) years after the effective date of this Agreement, the rate of accrual of vacation shall be raised to 6.154 hours per two week period (or as otherwise adjusted generally for other City employees). (b) Sick Leave. Commencing on the effective date of this Agreement, Manager shall be credited with thirty (30) days of accrued and unused sick leave. Commencing on the effective date of this Agreement, Manager shall accrue sick leave at the rate for management employees as that may be adjusted from time to time. Accrued and unused sick leave shall not be subject to buy -back annually or upon termination. (c) Vehicle Allowance. Manager shall be provided an automobile by City for Manager's exclusive and unrestricted use. City shall be responsible for paying for liability, property damage and comprehensive liability insurance (subject to the condition, however, that the City Attorney first and continuously thereafter determines that it is both lawful and feasible for the City to do so) and for the purchase, operation, maintenance, repair and SPD39417 - 5 - regular replacement of said automobile. an "additional- insured" on any such Manager shall be named as comprehensive liability insurance policy, and such policy shall cover both professional and personal use of the automobile. For purposes of the calculation of Severance Pay under Section 2 of this Agreement, the benefits conferred upon Manager pursuant to this paragraph (c) shall in the aggregate constitute Manager's vehicle allowance, and such vehicle allowance shall be deemed to have a value equal to five hundred dollars ($500.00) per month. (d) Supplemental Benefits. Manager shall receive any and all other supplemental benefits including, but not limited to, health, dental, life insurance, disability insurance, holidays, retirement benefits (PERS), deferred compensation, physical examination, tuition reimbursement and long term disability, as are generally available to management employees of the City as provided by applicable City Resolutions and Personnel Rules. All actions undertaken by City relating to fringe benefits for management employees shall be considered actions affecting the same benefits applicable to Manager. As used herein, fringe benefits include, but are not limited to, vacation, sick leave, administrative leave, holiday pay, retirement (PERS) benefits and payments, health insurance, dental insurance, life insurance and long term disability insurance. City shall not at any time during the term of this Agreement reduce the base salary, compensation or other employment benefits of Manager, except as permitted by this Agreement. SPD39417 - 6 - (e) Professional Development. (i) Subject to the Council's discretion to adopt and amend the budget, City agrees to pay for professional dues and subscriptions on behalf of Manager which are reasonably necessary, as determined by the Council, for the Manager's continuation and full participation in national, regional, state or local associations and organizations necessary and desirable for Manager's continued professional participation, growth and advancement, or for the good of the City. Furthermore, City shall pay for any additional professional dues and subscriptions as may be approved by the Council from time to time. (ii) Subject to the Council's discretion to adopt and amend the budget, City agrees to pay the travel and subsistence expenses of Manager for official travel, meetings and events reasonably necessary to continue the professional development of Manager and reasonably necessary to fulfill official and other functions for the City, all as determined to be reasonable and necessary by the Council. Such meetings and events shall include, but not be limited to, the annual International City Management Association meeting, meetings of the League of California Cities and other national, regional, state and local conferences of governmental groups and committees in which Manager serves as a member. 5. PERFORMANCE EVALUATION (a) The Council and Manager may annually define such goals and objectives for the City which they determine necessary for the proper operation of the City in the attainment of the SPD39417 -! - Council's policy objectives, and the Council and Manager may further establish a priority among those various goals and objectives to be reduced to writing. The process of considering the establishment and priority of goals and objectives of the City shall be conducted and completed generally about January of each year. (b) The Council, following informal and nonbinding consultation with Manager, shall periodically establish goals and objectives regarding the performance of Manager. The Council shall review and evaluate the performance of Manager at least once annually. Notwithstanding any term or provision of this Agreement to the contrary, Manager shall serve at the will and pleasure of the Council, and the Council shall be entitled to terminate the employment of Manager without cause. (c) In recognition of the accomplishment of goals and objectives and excellent performance, a merit increase in salary and /or benefits of Manager may be granted to Manager by the Council. Nothing herein shall be deemed to change the "at will" employment status of Manager. 6. TERMS OF EMPLOYMENT The Council, following informal and nonbinding consultation with Manager, may by motion, resolution or written amendment to this Agreement approved as an official Council meeting agenda item, fix any other terms and conditions of employment as it may determine, from time to time, relating to the performance of Manager, provided such terms and conditions are not prohibited by SPD39417 -8- the provisions of this Agreement, the Arcadia City Charter or any other rules or regulations of the City. 7. ENTIRE This Agreement contains the entire agreement between the parties concerning the subject matter set forth herein and no promise, representation, warranty or covenant not included in this Agreement has been or is relied upon by any party hereto concerning the offer and acceptance of employment described herein. 8. NO CONTINUING WAIVER No waiver of any term or condition of this Agreement by either party shall be deemed a continuing waiver of such term or condition. 1994. 9. EFFECTIVE DATE The effective date of this Agreement shall be August 3, IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth hereinabove. CITY: MANAGER: Mayor of,,Xhe Cit of Ar dia William R. Kelly ATTEST: C&Oz� Clerk City of Arcadi APPROVED AS TO FORM: Mi hael H. Mill�— City Attorney SPD39417 -9 -