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11-12-2008 CC Rpt A12COUNCIL AGENDA STAFF REPORT CITY CLERK USE ONLY Meeting Date: Public Hearing Discussion Item Consent Item November 4, 2008 November 12, 2008 Inj 2000 �Mtf --7 N-f 9: 43 r ERK (Jrii'v iJ HIUS TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: CITY ATTORNEY SUBJECT: APPOINT MICHAEL S. FLEAGER AS CITY MANAGER EFFECTIVE FEBRAURY 28, 2009 AND APPROVE CITY MANAGER CONTRACT WITH MICHAEL S. FLEAGER RECOMMENDATION: Appoint Michael S. Fleager as City Manager effective February 28, 2009 and authorize execution of City Manager's Employment Agreement with Michael S. Fleager. BACKGROUND/ANALYSIS During closed session meetings , duly noticed and conducted on September 23, 30, October 14, and 28 the City Council met to discuss the replacement of Doug LaBelle as City Manger who is retiring on February 27, 2009. On November 3, 2008 the Council held a closed session meeting to negotiate the terms and conditions of a potential employment agreement with City Manager candidate Michael S. Fleager, the City's current Director of Community Services. The proposed contract was prepared by the City Attorney. It provides for a term commencing on February 28, 2009 and ending on May 31, 2011. The contract can be terminated for cause (as defined in the contract) at any time. However, the Council can terminate the contract at any time without cause so long as the Council pays Mr. Fleager six months of severance pay. The initial annual salary for Mr. Fleager will be $195,000 which will be increased by 4% on March 1, 2010. It will also provide Mr. Fleager with an $800 per month car allowance. All of the other benefits provided for in the agreement are consistent with the benefits provided to City Department Heads. A copy of the proposed agreement is attached hereto. Mark Hensley, City Attorney EMPLOYMENT AGREEMENT This Employment Agreement ("Agreement"), is made this 12th day of November 2008, by and between the City of Chino Hills, a municipal corporation, hereinafter called "City," and Michael S. Fleager, hereinafter called "Manager," both of whom covenant and agree as follows: WITNESSETH WHEREAS, City desires to employ the services of Manager as City Manager of the City of Chino Hills, as provided by the Chino Hills Municipal Code ("City Code"); and WHEREAS, it is the desire of the City Council of the City of Chino Hills, hereinafter called "Council," to provide certain benefits, establish certain conditions of employment and to set working conditions of said Manager; and WHEREAS, it is the desire of the Council to (1) secure and retain the services of Manager and to provide inducement for him to remain in such employment, (2) to make possible full work productivity by assuring Manager's morale and peace of mind with respect to future security, and (3) to provide a just means for terminating Manager's services at such time as he may be unable fully to discharge his duties or when City may otherwise desire to terminate his employment; and WHEREAS, Manager desires to accept employment as City Manager of said City; NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties agree as follows: Section 1. ADoointment and Duties. A. City hereby appoints and agrees to employ Manager as City Manager of City for the period commencing on February 28, 2009, and ending on May 31, 20011 ("Term"), to perform the functions and duties specified in the City Code and the Government Code of the State of California, and to perform other legally permissible and proper duties and functions as the Council shall from time to time assign. B. Manager is employed at -will and holds his position at the pleasure of the Council, as provided in the City Code Section 2,08.010. 1 Thus, Manager is employed at the mutual consent of Manager and City and either Manager or City may terminate the employment at-wilf. City may terminate Manager at any time, with or without good cause, for any reason whatsoever which does not violate a public policy of the State of California. Termination shall be by the vote of a majority of the Council as then constituted, as provided in City Code Section 2.08.100. Manager may terminate his employment at any time, with or without good cause, for any reason whatsoever, subject to the notice requirement set forth in Section 2.8. below. Manager is exempt from City's Personnel System as provided in City Code Section 2.60.040(e), and holds no property right in his employment. C. Manager agrees that no representative of City has made or can make any promises, statements, or representations which state or imply that Manager is hired or retained under any terms other than at -will and exempt from City's Personnel System, as set forth above. Section 2. Termination and Severance Pay. A. in the event that during the Term of this Agreement: (1) Manager is terminated by a majority vote of the Council at such time as Manager is willing and able to perform his duties under this Agreement; (2) City at any time during the term of this Agreement reduce the salary or other financial benefits of Manager in a greater percentage than an applicable across-the-board reduction for all Department Heads of City; or (3) Manager resigns following a request by a majority of the Council that he resign at such time as Manager is willing and able to perform his duties under this Agreement, then in that event City agrees to pay Manager a lump sum cash payment equal to six (6) months of aggregate salary and benefits as provided in Sections 3, 6, 7 and 8. Notwithstanding any other provision of this Section 2, the City shall not be obligated to make any severance payment as described herein if Manager is terminated for corrupt or willful misconduct in office, willful malfeasance, misfeasance or nonfeasance constituting grounds for removal from office or conviction of an illegal act involving personal gain or moral turpitude. In the event that Manager is under investigation for any of the foregoing reasons, the City may withhold part or all of such severance pay until it is determined if charges will be filed, and if charges are filed, until final judgment is rendered. B. In the event Manager voluntarily resigns his position with City, then Manager shall give City one (1) month's notice in advance, unless the parties otherwise agree, and no severance pay will be due. E C. "Termination of Employment" shall mean resignation, termination, retirement or death. Section 3. Salarv. City will pay Manager for his services rendered pursuant hereto an annual base salary of One Hundred Ninety Five Thousand Dollars ($195,000) payable in installments at the same time as other employees of City are paid. Effective March 1, 2010 this annual base salary shall be increased to Two Hundred Two Thousand Eight Hundred Dollars ($202,800). In addition, City will increase said base salary and/or other benefits of Manager in such amounts and to such extent and at such times as the Council may determine that it is desirable to do so. Section 4. Automobile. The City will pay the Manager an Eight Hundred Dollars ($800) per month automobile allowance. Manager shall provide and maintain business automobile liability insurance with the following coverages: bodily injury - $500,000 each person and $1 million aggregate for each accident; and property damage - $100,000 for each accident. Manager's insurance coverage shall be primary insurance with respect to City, its officers, officials, employees and volunteers. The Manager shall furnish a certificate of insurance naming the City, its officers, officials, employees and volunteers as additional insureds on the Manager's automobile insurance policy. Any insurance or self-insurance maintained by City, its officers, officials, employees or volunteers shall apply in excess of, and not contribute with, Manager's insurance. Section 5. Holidav Benefits. Manager will be entitled to the same holidays as other management employees of the City. Section 6. Health. Vision. Dental. Accidental Dismemberment. Life Insurance and Short and Lono Term Disabilitv Insurance. City will provide Manager the same health, vision, dental, accidental dismemberment and life insurance provided to the Department Heads of City, from among the plans approved by the Council, and will make premium payments on such insurance commensurate with what is paid by the City on behalf of Department Heads. City shall provide Manager with both a short and long term disability insurance plan. Section 7. Retirement. Manager shall be entitled to enroll in, or continue enrollment in the San Bernardino County Retirement System and to enjoy the benefits provided thereby to the same extent that such are enjoyed by City Department Heads, including but not limited to paying Manager's monthly contributions to such retirement system, and 3 transferring ownership to Manager upon Manager's Termination of Employment. Section 8. Vacation. Sick and Administrative Leave. Manager shall be entitled to vacation leave based upon his total years of employment with the City, which includes his current employment with the City as the Director of Community Services, which will be subject to the same accrual, carry forward and cash pay-off regulations as applicable to Department Heads of the City. Manager shall be entitled to sick leave which will be subject to the same accrual, carry forward and cash pay-off regulations as applicable to Department Heads of the City. Manager shall be entitled annually to twelve(12) days of administrative leave which shall not be carried over beyond the year in which it is earned. Section 9. Dues and Subscriptions. City will budget and pay for the professional dues and subscriptions of Manager necessary for his continuation and full participation in national, regional, state and local associations and organizations necessary and desirable for his continued professional participation, growth and advancement, and for the good of City to the extent deemed reasonable by the Council. Section 10. Professional Development. A. City will budget for and pay the travel and subsistence expenses of Manager for professional and official travel, meetings and occasions adequate to continue the professional development of Manager and to adequately pursue necessary official and other functions for City, including, but not limited to, International City and County Management Association and League of California Cities, and other professional associations to the extent deemed reasonable by the Council. B. City will also budget and pay for the travel and subsistence expenses of Manager for short courses, institutes and seminars that are necessary for his professional development and for the good of City to the extent deemed reasonable by the Council and is consistent with City policies. M Section 11. General Expenses. City recognizes that certain expenses of a non -personal and generally job -affiliated nature will be incurred by Manager, and hereby agree to reimburse or to pay said general expenses subject to any guidelines the Council may impose and the Finance Director is hereby authorized to disburse such monies upon receipt of duly executed expense or petty cash vouchers, receipts, statements or personal affidavits. Section 12. Indemnification. The City shall defend and indemnify Manager in accordance with Government Code Sections 825, et seq. and 995, et seq. Section 13. Bondina. City shall bear the full cost of any fidelity or other bonds required of Manager under any law or ordinance. Section 14. Other Terms and Conditions of Emolovment. A. The Council, in consultation with the Manager, shall fix any such 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 inconsistent with or in conflict with the provisions of this Agreement or State law. Any such actions shall be reflected in a written amendment to this Agreement signed by the parties hereto. B. All provisions of the City Code and regulations and rules of City relating to vacation and sick leave, retirement and pension system contributions, holidays and other fringe benefits and working conditions pertaining to City Department Heads as they now exist or hereafter may be amended, except as otherwise set forth herein, also shall apply to Manager. Section 15 Notices. Notices pursuant to this Agreement shall be given by deposit in the custody of the United States Postal Service, postage prepaid, addressed as follows: (1) CITY: City of Chino Hills 14000 City Center Drive Chino Hills, CA 91709 Attn: City Clerk (2) MANAGER: Michael S. Fleager 14000 City Center Drive Chino Hills, CA 91709 5 Alternatively, notices required pursuant to this Agreement may be personally served in the same manner as is applicable to civil judicial practice. Notice shall be deemed given as of the date of personal service or as of the date of deposit of such written notice in the United States Postal Service. Section 16 General Provisions. A. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing by the City Council and the Manager. No waiver of either party at any time of the breach of, or lack of compliance with, any conditions or provisions of this Agreement shall be deemed a waiver of other provisions or conditions hereof. C. This Agreement contains the entire agreement and understanding between the parties and contains all of the terms and conditions of the parties' agreement and supersedes any other oral or written negotiations, discussions, representations, or agreements. Manager acknowledges that he has not relied on any promises, statement, representations, or warranties except as set forth expressly in this Agreement. D. The City has an interest in the qualifications of and capability of the Manager who will fulfill the duties and obligations imposed upon Manager by this Agreement. In recognition of that interest, neither any complete nor partial assignment of this Agreement may be made by Manager nor changed, substituted for, deleted, or added to without the prior written consent of the City. Any attempted assignment or substitution shall be ineffective, null, and void, and constitute a material breach of this Agreement entitling City to any and all remedies at law or in equity, including summary termination of this Agreement. E. This Agreement shall be governed by and construed in accordance with the laws of the State of California. F. If any provision, or any portion thereof, contained in this 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. on G. Unless provided for otherwise by this Agreement, all provisions of the City Code which are applicable to the Manager shall remain in full force and effect. IN WITNESS WHEREOF, the City of Chino Hills has caused this Agreement to be signed and executed in its behalf by its Mayor, and duly attested by its City Clerk, and Manager has signed and executed this Agreement, both in duplicate, the day and year first above written. Michael S. Fleager Curt Hagman, Mayor City of Chino Hills Mary McDuffee, City Clerk City of Chino Hills APPROVED AS TO FORM: Mark D. Hensley, City Attorney City of Chino Hills 7