HomeMy WebLinkAbout2016-011 - City Manager Employment Agreement55394.00000 \24406235.1
RESOLUTION NO, 2016 -011
A RESOLUTION OF THE SANTA ANA CITY COUNCIL
APPROVING AN AMENDED AND RESTATED CITY
MANAGER EMPLOYMENT AGREEMENT AND AFFIRMING
THE AWARD OF A PERFORMANCE BONUS.
WHEREAS, City of Santa Ana ( "City ") and David Cavazos ( "City Manager ") entered
into that certain Employment Agreement dated August 5, 2013 (hereinafter "Employment
Agreement'), whereby Employee agreed to serve as the City Manager of the City; and
WHEREAS, on or about September 2, 2014, the City and City Manager entered
into a First Amendment to the Employment Agreement (hereinafter "First Amendment'),
which amended certain provisions of the Employment Agreement, including provisions
related to a housing allowance and the term; and
WHEREAS, on or about January 20, 2015, the City and City Manager entered into
a Second Amendment to the Employment Agreement (hereinafter "Second Amendment'),
which amended certain provisions of the Employment Agreement, as amended by the
First Amendment, including provisions related to benefits; and
WHEREAS, the Employment Agreement provides that the City Council shall
conduct an annual performance evaluation of the City Manager; and
WHEREAS, the City Council conducted such evaluation and 1) awarded a
performance bonus of 5% and 2) appointed an ad hoc committee and the ad hoc
committee instructed the City Attorney to negotiate an amendment to the City Manager
Employment Agreement to address requests made by the City Manager; and
WHEREAS, the City Attorney prepared an Amended and Restated City Manager
Employment Agreement to restate the previous agreements and reflect the recent
negotiations; and
WHEREAS, the City Council has reviewed the Amended and Restated City
Manager Employment Agreement, a copy of which is attached hereto as "Exhibit A."
NOW, THEREFORE, BE IT RESOLVED, that the Santa Ana City Council does
hereby resolve as follows:
Section 1. The City Council hereby approves the Amended and Restated City
Manager Employment Agreement attached hereto and incorporated herein as "Exhibit
A" and authorizes the Mayor to execute the Amended and Restated City Manager
Employment Agreement.
Resolution No. 2016 -011
Page 1 of 4
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Section 2. The City Council affirms a performance bonus of 5% for the City
Manager as provided for in the Employment Agreement.
Section 3. This Resolution shall take effect immediately upon its adoption.
Section 4. The Mayor shall sign this Resolution, and the City Clerk shall attest
and certify to the passage and adoption thereof.
PASSED, APPROVED, AND ADOPTED this 2nd day of February, 2016.
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
Sonia R. Carvalho
City Attorney
AYES:
NOES:
ABSTAIN:
Miguel A. Pulido
Mayor
Councilmembers: Amezcua, Benavides, Reyna, Sarmiento,
Tinaiero (5)
Councilmembers
Councilmembers
NOT PRESENT: Councilmembers
Resolution No. 2016 -011
Page 2 of 4
Martinez, Pulido (2)
None (0)
None (0)
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CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2016 -011 to be the original resolution adopted by the City Council of the
City of Santa Ana on February 2, 2016.
Date: al(o
Clerk of the Council
City of Santa Ana
Resolution No. 2016 -011
Page 3 of 4
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Exhibit "A"
Amended and Restated City Manager Employment Agreement
Resolution No. 2016 -011
Page 4 of 4
CITY OF SANTA ANA
AMENDED AND RESTATED CITY MANAGER EMPLOYMENT AGREEMENT
This Amended and Restated City Manager Employment Agreement ( "Agreement ")
is entered into as of the 2nd day of February, 2016 (the "Effective Date "), between the City of
Santa Ana (hereinafter referred to as the "City ") and David Cavazos (hereinafter referred to as the
"City Manager" or the "Employee "). City and City Manager/Empleyee are sometimes referred to
in this Agreement as "Party" acrd collectively as "Parties."
RECITALS
WHEREAS, on October 21, 2013, the City Council appointed Employee as City
Manager pursuant to the its authority under the Charter of the City of Santa Ana ( "City Charter "),
WHEREAS, the City and Employee entered into an Employment Agreement
effective October 21, 2013 wherein Employee would be employed as City Manager fox the City
of Santa Ana,
WHEREAS, the City and Employee entered into a First Amendment of the
Agreement on or about September 2, 201.4, whereby the parties agreed to revise the term to extend
the Agreement for an additional year and to revise the terms of the "Housing Allowance,"
WHEREAS, the City and Employee entered into a Second Amendment of the
Agreement on or about January 20, 2015, whereby the parties agreed to provide certain executive
level benefits related to a health savings plan and a 401(A) plan.
WITEREAS, it is the desire of the City Council and Employee to amend the
employment Agreement to add Compensation for Sick leave at varying rates over time or
Convexsinn to Retirement Credit; extend the term of the Agreement from October 21, 2017 to
February 16, 2019; and to add a provision to the Agreement that Employee's estate is entitled to
accrued salary and benefits, but not severance if the Employee dies during the term of this
Agreement. The parties further agree to combine the previous three amendments and restate the
entire agreement into an Amended and Restated Agreement,
as follows:
NOW, THEREFORE, the above named Parties hereby mutually agree and promise
1. Terra /Automatic Annual Renewal.
This Agreement shall be deemed effective for a five (5) year and four (4) month
tern beginning on October 21, 2013 and terminating on February 16, 2019, unless terminated
earlier in accordance with Section 9 hereof. This initial term will, pursuant to the provisions below,
automatically extend from, year to year unless City Council takes action to prevent the automatic
extension. In the event the City Council does not want this Agreement to automatically extend, it
EXHIBIT A
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will provide written notice to City Manager that the Agreement will not be extended and
consequently will terminate as of the end of the current term.
If action is not taken by City Council within three (3) months before the expiration
of the initial term of this Agreement on November 16, 2018, this Agreement shall on February 16,
2019, automatically extend for one (1) year from February 16, 2019 until February 16, 2020. For
each succeeding year that the City Council does not take action to extend or terminate this
Agreement by three (3) months before the then current end of the Agreement, the Agreement shall
automatically extend for an additional year. For example, if action is not taken by the City Council
to extend or terminate this Agreement by November 16, 2020, the Agreement shall on that date
automatically extend for one (1) year from February 16, 2021, to February 16, 2022, and if the
City Council doesn't take action to extend or terminate this Agreement by November 16, 2021, it
will automatically extend for one (1) year from February 16, 2022 to February 16, 2023.
2, Compensation.
2.1 Salary
(a) Annual Salary
City agrees to pay City Manager, and City Manager agrees to accept from City, as
compensation for services rendered by City Manager pursuant to this Agreement, an annual base
salary, commencing on the Effective Date, in the amount of Three Hundred Fifteen Thousand
Dollars ($315,000.00) (hereinafter "Annual Base Salary "), payable in installment payments in the
same manner and at the same times as salaries of other executive managers of the City are paid.
The term "Annual Base Salary" as used in this Agreement shall also include any
such adjustments approved by the City Council other than payments not eligible to be added to the
City Manager's Amival Base Salary pursuant to the terms of any applicable salary resolution of
City. The term "Monthly Base Salary" as used in this Agreement shall mean a sum of money
equal to one - twelfth (1/12) of City Manager's Annual Base Salary as defined herein.
(b) Right of Estate to Accrued Salary
City agrees that if the City Manager dies during the term of this Agreement, his
estate is entitled to accrued salary as of date of death as defined in section 2.1(a) under this
Agreement.
(c) Deferred Compensation
City Manager shall receive as additional compensation added to his base salary and
deducted therefrom pursuant to Government Code Section 53214, deferred compensation in the
maximum annual amount permitted pursuant to Section 457 of the Internal Revenue Code at the
time of execution of this Agreement, said amount consisting of the maximum Standard
contribution and the Age 50+ contribution.
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(d) Performance Bonus
Each fiscal year, commencing with the fiscal year that starts on July 1, 2014, the
City Council may grant to City Manager a performance bonus. Whether or not to grant a bonus
and the amount of any such bonus shall be in the sole discretion of the City Council, The decision
by the City Council regarding the performance bonus shall be made for each fiscal year at the time
the City Cotimcil is providing the performance evaluation of City Manager required by paragraph
3 of this Agreement.
It is the understanding and intent of the City and City Manager that performance
bonuses are not reportable to the California State Public Employees Retirement System
( "CalPERS "), and are not to be included in the calculation of City Manager's retirement allowance.
Performance bonuses are not added to the annual base salary.
2.2 Benefits
2.2.1 General Benefits
(a) Applicable General Benefits
In addition, and except as otherwise specified herein, City Manager shall receive
all such other benefits that are applicable to executive managers of the City as of the Effective
Date of this Agreement, including but not limited to medical insurance, dental insurance, long
term disability insurance, life insurance, sick leave, holidays, vacation, bereavement and family
illness leave, physical examinations, participation in retirement system and participation in the
City's retiree medical program in the same manner as other City executive managers as described
in Exhibit "A" attached hereto.
(b) Right of Estate to Accrued Benefits
City agrees that if City Manager dies during the term of this Agreement, his Estate
is entitled to his accrued benefits as of date of death as defined in Section 2.2.1(a) under this
Agreement.
2.2.2 Initial Sick Leave Bank
(a) Sick Leave Accumulation
Upon employment with City, City Manager shall be provided with an initial sick
leave bank containing 80 hours of usable sick leave. This initial sick leave bank of 80 hours shall
be for use by the City Manager under the applicable City policies and State and Federal laws.
(b) Sick Leave Accrual Cash Out or Retirement Credit
Upon last date of employment with the City, City Manager shall be entitled to cash
out his accrued sick leave as outlined in subsection (1) or to elect a conversion of his accrued sick
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leave to a retirement credit outlined in subsection (2).
(1) Sick Leave Accrual Cash Out
(i) Between February 16, 2016 and February 15, 2017, City
Manager will be entitled to cash out 15% of his unused accrued sick leave;
(ii) Between February 16, 2017 and February 15, 2018, City
Manager will be entitled to cash out 301/o of his unused accrued sick leave; and
(iii) On or after February 16, 2018, City Manager will be entitled
to cash out 50% of his unused acenred sick leave.
(2) Sick Leave Retirement Credit
The City Manager can have unused accrued sick leave which he is
authorized to cash out under the terms outlined in subsection (1) converted to additional service
credit at the rate of 0.004 years of service credit for each day of unused sick leave (i.e., 200 days
of sick leave equals .80 additional years of service credit). The City must report only those days
of unused sick leave that were accrued by City Manager during the normal course of employment.
In the event, the City Manager retires from City, this section applies to the City Manager only
when his effective date of retirement is within four (4) months of separation from employment,
2.2.3 Initial Vacation Allowance
Upon employment with City, City Manager shall be awarded 80 hours of vacation
leave. City manager shall accumulate additional regular and management vacation hours in the
same manner as other City executive managers.
2.2.4 Longevity Vacation
City Manager shall accumulate Longevity Vacation at the maximum accrual rate
for an employee having completed 20 years of service with the City.
2.2.5 Ca1PERS Membership
As a "new employee" under CalPERS, City Manager will be enrolled in the 2% at
age 62 benefit formula and shall be responsible for paying the corresponding employee
contribution per CaIPERS requirements as they exist today or as may be amended by the
legislature. As of the effective date of this Agreement the applicable contribution rate is 6.75% on
the first $136,440.00 of base salary.
2.2.6 Relocation Benefit
City Manager shall be provided reimbursement for the actual costs required to
relocate to California, i.e., moving expenses, not to exceed the sum of $7,500.00. Said
reimbursement may include the costs or up to 2 visits to Orange County prior to moving to locate
suitable housing.
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2.2.7 Housing Allowance
It is understood, that City Manager intends to reside in the City of Santa Ana during
his employment as City Manager, and that initially he will require a temporary residence while he
is purchasing a permanent residence in the City. Further, it is understood that the City Council
desires that the City Manager reside within the City of Santa Ana and believes that such residence
would be of benefit to the City and enhance City Manager's performance as City Manager, and
therefore, the City will pay City Manager the following allowances slid assistance.
(a) Temporary Housing Assistance
City Manager shall be provided with reimbursement for the actual costs of
temporary housing while City Manager seeks and obtains permanent Santa Ana housing in the
sum not to exceed $3,000 per month and for a period not to exceed 12 months from the date of this
Agreement. Prior to the 12 month maximum duration, said Temporary Housing Assistance shall
cease upon City Manager closing escrow on the purchase of a local residence or the execution of
a lease on a non - temporary residence.
(b) Housing Allowance
Upon the termination of the Temporary Housing Assistance provided for in Section
2.2.7(a), City shall pay City Manager a housing allowance in the sum of $2,000.00 per month up
and until October 16, 2016. Said housing allowance shall be contingent upon City Manager
residing within the City.
3. Performance Evaluation,
The Mayor and the City Council are responsible for setting performance goals on
an annual basis in consultation with the City Manager. The City Council shall review and discuss
City Manager's performance in or around July of each year commencing in 2014. However,
Employee acknowledges and accepts the fact that the City Council as Employer has the right to
schedule and an evaluation session at any time in accordance with the notice and all other
requirements of the Brown Act.
4. Bonds.
City shall bear the full cost of any fidelity or other bonds required of City Manager
under any law or ordinance.
5. Transportation and General Business Expenses.
5.1 Vehicle Provision
City shall provide City Manager with a vehicle, as well as fuel, maintenance and
liability insurance for said vehicle, for City Manager's use in commuting, in the performance of
his employment duties and for incidental personal use.
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5.2 General Business Expenses
(a) City agrees to budget and pay for professional dues and subscriptions for
City Manager necessary for his continuation and participation in national, regional, state and local
boards, task - forces, conferences and meetings, associations and organizations desirable for City
Manager's continued participation, professional growth, and advancement, and for the benefit of
the City.
(b) City agrees to budget and pay for travel and subsistence expenses of City
Manager for professional and official travel, board and task -force meetings, and occasions to
adequately continue the professional development of City Manager and to pursue necessary
official functions for City.
(c) City shall provide City Manager with the necessary technology tools,
including and not limited to computer, software, cell phone and such other technologies as required
by City Manager to perform his duties and to maintain communications.
6. Abuse of Office or Position.
Pursuant to Government Code Sections 53243, 53243.1 and 53243.2, which
became effective on January 1, 2012, if City Manager is convicted of a crime involving an abuse
of his office or position, all of the following shall apply: (1) if Manager is provided with
administrative leave pay pending an investigation, City Manager shall be required to fully
reimburse City such amounts paid; (2) if City pays for the criminal legal defense of City Manager
(which would be in its sole discretion, as it is generally not obligated to pay for a criminal defense),
City Manager shall be required to fully reimburse City such amounts paid; and (3) if this
Agreement is terminated, any Severance Pay and Severance Benefits related to the termination
that City Manager may receive from City shall be fully reimbursed to City or void if not yet paid
to City Manager. For purposes of this Section, abuse of office or position means either: (1) an
abuse of public authority, including waste, fraud, and violation of the law under color of authority;
or (2) a crime against public justice, including, but not limited to, a crime described in Title 7
(commencing with Section 92) of Part I of the Penal Code.
Notices.
Any notice required or permitted by this Agreement shall be in writing and shall
be personally served upon the other Party, or sent by United States Postal Service, postage
prepaid and addressed to the appropriate Party as follows:
If to City: City Attorney
City of Santa. Ana
20 Civic Center Plaza
Santa Ana, CA 92702
55394.0000018170424.1
If to City Manager; David Cavazos
City Manager
City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92702
Notice shall be deemed given as of the date of personal service or upon the date of
deposit in the course of transmission with the United States Postal Service,
8. Duties, Acceptance of Appointment, Hours of Work, Regional
Liaison,
8.1 Duties
City hereby agrees to employ Employee as City Manager of the City of Santa Ana
to perform the functions and duties specified in the City Charter of the City of Santa Ana, and to
perform such other legally permissible duties and functions as the City Council may from time to
time assign.
8.2 Acceptance of Appointment
Employee hereby accepts the appointment as City Manager of the City of Santa
Ana subject to all terms and conditions set forth in this Agreement.
8.3 Hours of Work
It is recognized that City Manager devotes a great deal of time outside the normal
City Hall office -hours schedule, and to that end, he shall be allowed to establish his work schedule,
taking into consideration that he is responsible for the supervision of employees and has
responsibilities to serve all departments of the City.
9. Termination.
9.1 At -Will Employee
Employee shall serve at the will and pleasure of the City Council. Nothing in this
Agreement shall prevent, limit or otherwise interfere with the right of the City Council to suspend
from duty, remove from office or otherwise terminate the services of City Manager at any tune, at
the sole discretion of the City Council, as provided in the City Charter. This Agreement may be
terminated as follows.
9.2 Termination - Council Vote
As required in Section 500 of the City Charter, the City Council may remove the
City Manager by motion adopted by the affirmative votes of at least two- thirds (2/3) of the
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members of the City Council. At least thirty(30) days before such removal shall become effective,
the City Council shall by resolution adopted by the affirmative votes of at least two- thirds(2 /3) of
the members of the City Council state the reasons in writing for the removal of the City Manager.
9.3 Termination - Change in Form of Government
1:1 any of the governing policies pertaining to the role, power, duties, authority, or
responsibilities of City Manager are amended to substantially change City's form of government,
either by action of the City Council, a duly passed initiative measure or state legislation, City
Manager shall have the right to terminate the Agreement.
9.4 Reduction of Salary or Benefits
If the City Council reduces the Annual Base Salary or any other financial benefit
of the City Manager in a percentage that is greater than the average reduction of base salary for all
executive managers of the City, such action shall constitute a termination of this Agreement.
9.5 Resignation
City Manager may voluntarily resign his position as City Manager, after giving City
at least sixty (60) days written notice prior to the effective date of such resignation, unless such
notice is waived in whole or part by the City Council. In the event the City Manager resigns from
his employment with City, the City Manager shall not be entitled to any Severance Pay.
9.6 Severance
In the event this Agreement is terminated pursuant to any one of sections 9.2, 9.3
or 9.4 of this Agreement, the City Manager shall receive a severance payment, in a lump sum,
equal to twelve (12) months of City Manager's then monthly Base Salary ("Severance Pay ") in
accordance with the provisions of this Agreement. A Severance Pay payment shall be his sole
remedy for termination tinder sections 9.2, 9.3 or 9.4 of this Agreement. The Severance Pay shall
be paid after the City Manager executes a waiver and release agreement prepared by the City
Attorney in a form substantially similar to that one set forth as Exhibit `B" to this Agreement.
Notwithstanding any provision of this Agreement to the contrary, City may
terminate City Manager's employment for cause at any time and without prior notice, and if City
Manager is terminated for cause, he shall not be entitled to payment of severance compensation or
any other compensation or damages. "Cause" shall include the following reasons:
(a) Conviction of a crime, whether misdemeanor or a felony, involving moral turpitude.
For purposes of this paragraph, a plea of nolo contendere shall also be considered a conviction.
(b) City Manager is determined by a court of competent jurisdiction or the State of
California Fair Political Practices Commission to have knowingly and unlawfully participated in
a governmental decision in which he had a conflict of interest as defined in Government Code
Section 87100, et seq. or Government Code Section 1090 et seq.
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(c) Failure to follow a lawful directive of the Council after written notice of said failure is
provided to City Manager approved by five (5) or more affirmative notes of its seven (7) members.
(d) Continued abuse of drugs or alcohol that materially affects the performance of the City
Manager's duties.
(e) Repeated and protracted unexcused absences from the City Manager's office and duties.
10. General Provisions.
10.1 This writing constitutes the entire agreement between the parties with
respect to the subject matter hereof, and supersedes all prior oral or written representations or
written agreements on the subject matter hereof, which may have been entered into between the
parties. No modification or revision to this Agreement shall be of any force or effect, unless the
same is in writing and executed by the Parties hereto.
10.2 Each Party agrees and acknowledges that no representations, inducements,
promises, or agreements, oral or otherwise, have been made by any Party, or anyone acting on
behalf of any Party, which are not embodied herein and that any agreement, statement, or promise
not contained in this Agreement shall not be valid or binding on either Party.
10.3 if any provision, or portion thereof, contained in the Agreement is held
unconstitutional, invalid or unenforceable, the remainder of this Agreement, or portion thereof,
shall be deemed severable, shall not be affected and shall remain in full force and effect.
10.4 This Agreement shall be governed by and construed in accordance with the
law of the State of California.
10.5 This Agreement shall be construed as a whole, according to its fair meaning,
and not in favor or against any Party. By way of example and not in limitation, this Agreement
shall not be construed in favor of the Party receiving a benefit nor against the Party responsible for
any particular language in this Agreement.
1.0.6 Employee acknowledges that he has had an opportunity to consult legal
counsel in regard to this Agreement, that he has read and understands this Agreement, that he is
fully aware of its legal effect, and that he has entered into it freely and voluntarily and based on
his own judgment and not on any representations or promises other than those contained in this
Agreement.
10.7 This Amended and :Restated Agreement may be executed in duplicate
originals, each of which is deemed to be an original, but when taken together shall constitute but
one of the same instrument.
11. Intentionally Left Blank
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12. Communications in the Event of Termination
12.1 In the event the City terminates Employee for any reason or no
reason, the City and Employee agree that no member of the City Council or City employees
acting on behalf of the City shall make any written, oral, or electronic statement to any member
of the public, the press, or any city employee concerning the Employee's termination except
in the form of ajoint press release or statement, which is mutually agreeable to the City and
the Employee. The joint press release or statement shall not contain any text or information
that is disparaging to either Party. Either Party may verbally repeat the substance of the joint
press release or statement in response to any inquiry,
13. Indemnification
13.1 City shall defend, hold harmless and indemnify City Manager against any
tort, professional liability claim or demand, or other legal action, whether groundless or otherwise,
arising out of any alleged act or omission occurring in the performance of City Manager's duties
or resulting from the exercise of his judgment or discretion in connection with the performance of
his duties. City shall not unreasonably refuse to provide for legal representation at City's expense.
Legal representation, provided by City for City Manager, shall extend until a final determination
of the legal action including any and all losses, damages, judgments, interests, settlements, fines,
court costs, and the reasonable costs and expenses of legal proceedings, including appeals, and
including attorneys' fees, and expert witness fees and all other trial and appellate costs, and other
liabilities incurred, imposed upon, or suffered by such City Manager in connection with or
resulting from any claim, action, suit, or proceeding, actual or threatened, arising out of or in
connection with the performance of City Manager's duties.
13.2 City agrees to pay all reasonable litigation expenses of City Manager
throughout pendency of any City - related litigation to which City Manager is a party, witness or
advisor to the City. Such expense payments shall continue beyond City Manager's employment
with the City as long as litigation is pending. Post - employment, City agrees to pay City Manager
for reasonable consulting fees, travel expenses and other costs, when City Manager serves as a
witness, advisor or consultant to City regarding pending litigation.
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IN WITNESS WHEREOF, the Parties have executed this City Manager
Employment Agreement as of the day of February, 2016.
EMPLOYEE /CITY MANAGER
Cam✓
David Cavazos
CITY OF SANTA ANA
Miguel A. Pulido
Mayor
ATTEST;
Maria D. Huizar
Cleric of the Council
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Approved as to Form:
Sonia R. Carvalho, Best Best & Krieger
City Attorney