HomeMy Public PortalAbout14) 8.C. Employment Agreement for Interim City Manager - Don PenmanAGENDA
ITEM 8.C.
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
DATE: March 4, 2014
TO: The Honorable City Council
FROM: Eric Vail, City Attorney
Via: Tracey L. Hause, Acting City Manager/Administrative Services Director
SUBJECT: APPROVAL OF EMPLOYMENT AGREEMENT TERMS FOR POSITION
OF INTERIM CITY MANAGER
RECOMMENDATION:
It is recommended that the City Council:
a) Approve the terms of an Employment Agreement with Donald E. Penman to act as
Interim City Manager (Attachment "A"); and
b) Authorize the Mayor and City Attorney to execute an Employment Agreement with
Mr. Penman effective March 5, 2014.
BACKGROUND:
1. On January 13, 2014, the City Council terminated the employee agreement with
City Manager Pulido.
2. On January 17, 2014, the City placed advertisements in various professional local
government websites soliciting for letters of interest and resumes for the Interim
City Manager position for the City of Temple City. Letters of interest and resumes
were accepted until January 30, 2014.
3. On January 31, 2014, the City Council met in closed session to consider the
applicants for the Interim City Manager position. There was no reportable action.
4. On February 7 and February 8, 2014, the City Council met in closed session to
further consider applicants for the position of Interim City Manager and Interim
Community Development Director. At the conclusion of the meeting on February
8, 2014, the Mayor reported that the City Council directed City Attorney Vail to
begin negotiations for an Interim City Manager and Interim Community
Development Director.
City Council
March 4, 2014
Page 2 of 3
5. On February 18, 2014, the City Council met in closed session to consider
applicants for the Interim City Manager position. There was no reportable action.
6. On February 18, 2014, the City Council continued the employment agreement for
an Interim City Manager and Interim Community Development Director to the next
regular City Council meeting of March 4, 2014.
7. On February 26, 2014, the City Council met in closed session to once again
consider applicants for the position of Interim City Manager. At the conclusion of
the meeting on February 26, 2014, the City Council directed the Acting City
Manager/Administrative Services Director and the City Attorney to draft an
employment agreement for Donald E. Penman to serve as Interim City Manager
instead of Interim Community Development Director.
ANAlYSIS:
An appointment for an Interim City Manager is necessary to fill a critical position with the
City. The City Manager is the chief executive officer of the City and serves as
department head for the Management Services Department. He/she is responsible for
the efficient direction of all departments and the administrative affairs of the City,
including direct support to the City Council. Since the City has limited staff and has also
recently lost its Community Development Director, the existing staff is required to not
only perform their normal tasks but also support other departments to avoid reduction of
City services.
In order to ensure City operations continue in an effective manner, approval of the
Employment Agreement for the Interim City Manager is recommended. The terms of the
Employment Agreement with Mr. Penman are fairly simple. Since Mr. Penman is a
CaiPERS retired annuitant (i.e., CaiPERS retirees are limited to work a total of 960 hours
for another agency with CaiPERS retirement plan each fiscal year). On his
commencement date, Mr. Penman will be paid an hourly rate of $86.54 for each hour
worked, not to exceed 320 hours by June 30, 2014 as he has already worked 640 hours
this fiscal year for another CaiPERS contracting agency. After July 1, 2014, Mr. Penman
may continue to work for the City but cannot exceed 960 hours by June 30, 2015. Mr.
Penman will not receive any benefits (e.g. health, vision, dental insurance, life insurance,
or other benefits typically received by management employees). If the results of an
extensive background check are complete and satisfactory, Mr. Penman will commence
work with Temple City on Wednesday, March 5, 2014, and will work at City Hall for at least
3 days per week. It is expected that Mr. Penman will oversee the professional recruiting
firm in the recruitment of a new full time City Manager as well as other City operations.
CONCLUSION:
Approval of the Interim City Manager Employment Agreement will ensure City operations
continue in an effective manner.
City Council
March 4, 2014
Page 3 of3
FISCAL IMPACT:
There will not be a fiscal impact to the Fiscal Year (FY) 2013-14 City Budget with this
action. Sufficient funds in the amount of $206,502 have been budgeted for the previous
City Manager's compensation in the FY 2013-14 Budget, and Mr. Penman is being
compensated at an annualized rate of $180,000.
ATTACHMENT:
A Employment Agreement
EMPLOYMENT AGREEMENT
For the Position Of
INTERIM CITY MANAGER
ATTACHMENT A
This Employment Agreement ("Agreement") is made and entered into this 4111 day of March,
2014, by and between the CITY OF TEMPLE CITY ("CITY"), a California charter city, and
DONALD E. PENMAN ("PENMAN"), an individual, on the following tenns and conditions:
RECITALS
A. CITY desires to employ the services of PENMAN as its Interim City Manager,
temporarily, to carry out the duties and responsibilities of City Manager as provided for by the
Temple City Municipal Code, in consideration of and subject to the terms, conditions, and benefits
set forth in this Agreement. CITY further desires to employ the services of PENMAN to assist with
and oversee the hiring of a professional executive recruitment finn to perform a statewide executive
management recruitment to fill the position of City Manager.
B. PENMAN desires to accept employment as Interim City Manager in consideration of
and subject to the tenns, conditions, and benefits set forth in this Agreement.
C. PENMAN represents that he is a retired annuitant ofCa!PERS within the meaning of
Government Code § 2122l(h) and acknowledges that his compensation is statutorily limited as
provided in Government Code§ 21221 (h). PENMAN represents that, as of the effective date of this
Agreement, he has already worked 640 hours for another CalPERS state or contracting agency as a
retired annuitant during the CITY's 2013-2014 fiscal year, and that he therefore acknowledges that
he is restricted to working no more than 320 hours for CITY, a state agency or other CalPERS
contracting agencies (collectively "CalPERS Agencies") during CITY's 2013-2014 fiscal year.
Penman represents that he has not received unemployment compensation from any CalPERS
Agencies during the 12-month period preceding the effective date of this Agreement. PENMAN
further represents that his CalPERS retirement date became effective prior to the 180-day period
preceding the effective date of this Agreement.
D. CITY has determined that it is necessary to hire PENMAN, a retired annuitm1t,
because the position oflnterim City Manager requires special skills, and PENMAN, by virtue of his
significant expelience as an interim city manager in other cities, has those special skills.
OPERATIVE PROVISIONS
In consideration of the promises and covenants contained herein, the parties agree as follows:
1. Position and Duties.
1.1 Position. PENMAN accepts employment with CITY as its Interim City Manager and
shall perfonn all functions, duties and services set forth in Section 1.4 [Duties] of this Agreement.
PENMAN shall provide service at the direction and under the supervision of the City Council. It is
the intent of the parties that PENMAN, as the Interim City Manager, shall keep the City Council
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fully apprised of all significant ongoing operations of CITY. Toward that end, PENMAN shall
report directly to the City Council and will periodically, or as may be otherwise specifically
requested by the City Council, provide status reports to the City Council on his activities and those of
CITY.
1.2 Term. This Agreement shall become effective upon being approved by the City
Council and executed both by PENMAN and CITY's Mayor which date shall be the date first
referenced above. PENMAN shall commence the performance of his duties as the Interim City
Manager on March 5, 2014 or at such later date as the parties hereto shall agree in writing
("Commencement Date"). This Agreement shall expire as of the first of the following to occur: (i)
5:00 p.m. on Friday, February 27, 2015; (ii) upon the employment commencement date of a
pennanent City Manager employed by CITY; (iii) upon PENMAN working his 960'h hour for CITY
in any fiscal year, including hours worked for other CalPERS Agencies during such fiscal year; or
(iii) upon tennination of the Agreement by either PENMAN or CITY as provided in Section 4
[Tennination] of this Agreement.
1.3 At-Will. PENMAN acknowledges that he is an at-will, temporary employee of CITY
who shall serve at the pleasure of the City Council at all times during the pc1iod of his service
hereunder. The terms of CITY's personnel rules, policies, regulations, procedures, ordinances, and
resolutions, including without limitation CITY Resolution 07-4515, and subsequent Resolutions,
regarding City Administrative Personnel (collectively "Personnel Policies") , as they may be
amended or supplemented from time to time, shall not apply to PENMAN, and nothing in this
Agreement is intended to, or does, confer upon PENMAN any right to any property interest in
continued employment, or any due process right to a hearing before or after a decision by the City
Council to tenninate his employment, except as is expressly provided in Section 1.2 [Term] or
Section 4 [Termination] of this Agreement. Nothing contained in this Agreement shall in any way
prevent, limit or otherwise interfere with the right of CITY to terminate the services ofPENMAN, as
provided in Section 1.2 [Term] or Section 4 [Termination]. Nothing in this Agreement shall prevent,
limit or otherwise interfere with the right of PENMAN to resign at any time from this position with
CITY, subject only to the provisions set forth in Section 1.2 [Tenn] or Section 4 [Tennination] of
this Agreement. This at-will employment Agreement shall be expressly subject to the rights and
obligations of CITY and PENMAN, as set forth in Section 1.2 [Term] or Section 4 [Termination]
below.
1.4 Duties. PENMAN shall serve as the Interim City Manager and shall be for the Te1m
of the Agreement be vested with the powers, duties and responsibilities of the City Manager as set
forth in Section 702 of the Temple City Charter and Section 2200 et seq. of Chapter 2 of Title 2 of
the Temple City Municipal Code, the tenns of which are. incorporated herein by reference.
PENMAN shall provide service at the direction and under the supervision of the City Council. It is
the intent of the parties that the Interim City Manager shall keep the City Council fully apprized of
all significant ongoing operations of CITY. Toward that end, PENMAN shall report directly to the
City Council and will periodically, or as may be otherwise specifically requested by the City Council,
provide status reports to the City Council on his activities and those of CITY. It is the intent of the
City Council for the Interim City Manager to function as the chief executive officer of CITY's
organization. Without additional compensation, PENMAN shall provide such other services as are
customary and approptiate to the position of Interim City Manager, including serving as the
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Executive Director of the Temple City Successor Agency, Temple City Housing Authority, and the
Financing Authority, together with such additional services assigned from time to time by the City
Council as may be consistent with California law and the Temple City Charier and Municipal Code.
PENMAN shall devote his best efforts and full-time attention to the performance of these duties.
Notwithstanding PENMAN's duties as Interim City Manager, nothing in this Agreement shall be
construed to prohibit direct communications between the City Council and employees of CITY in a
manner that is consistent with the City's personnel rules, administrative policies and City Council
policies.
1.5 Hours of Work. PENMAN shall devote the time necessary to adequately perform
his duties as Interim City Manager. The parties anticipate that PENMAN will work approximately
20 hours per week allocated between regular business hours and hours outside of regular business
hours including, without limitation, attendance at regular and special City Council meetings,
attendance at activities of Directed Organizations (as defined below), and attendance at such
cmmnunity events and CITY functions as the Council may direct. Toward that end, PENMAN shall
be allowed reasonable flexibility in setting his own office hours, provided the sched111e of such hours
provides a significant presence at City Hall at least three (3) days per week, reasonable availability to
the City Council, CITY staff, and members of the community dnring regular CITY business hours
and for the performance of his duties and of CITY business. However in no event shall PENMAN
be required to work in excess of 960 hours per fiscal year for CITY, including hours worked for
other CalPERS Agencies during such fiscal years. The position of Interim City Manager shall be
deemed an exempt position under California wage and hour law.
1.6 Directed Organizations. The City Council desires PENMAN to be reasonably active
in statewide, regional and/or local organizations as directed by the City Council that are deemed
necessary to maintain and contribute to the advancement of CITY's interests and standing ("Directed
Organizations"). These Directed Organizations may include, without limitation, participation in the
San Gabriel Valley Council of Govermnents, Southern California Association of Government, the
California Contract Cities Association, and the League of California of Cities. CITY agrees to
budget and, consistent with that budget, pay for the dues and subscriptions of the Interim City
Manager necessary for his participation in the Directed Organizations. CITY agrees to reimburse, as
provided in Section 1.8 [Reimbursement] ofthis Agreement, PENMAN's reasonable and necessary
travel, business and subsistence expenses for the activities related to the Directed Organizations.
1.7 Othe1· Activity. In accordance with Government Code Section 1126, during the
period of his employment, PENMAN shall not accept, without the express prior written consent of
the City Council, any other employment or engage, directly or indirectly, in any other business,
commercial, or professional activity (except as pern1itted under Section 1.6 [Directed
Organizations]), whether or not to pecuniary advantage, that is or may be competitive with CITY,
that might cause a conflict-of-interest with CITY, or that otherwise might interfere with the business
or operation of CITY or the satisfactory performance ofPENMAN' s duties as Interim City Manager.
1.8 Reimbursement. CITY shall reimburse PENMAN for reasonable and necessary
travel, subsistence and other business expenses incurred by PENMAN in the perfonnance of his
duties. All reimbursements shall be subject to and in accordance with California law and CITY's
adopted Employee Reimbursement Policy.
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2. Compensation.
2.1 Rate of Pay. For all services performed by PENMAN as the Interim City Manager
under this Agreement, CITY shall pay PENMAN compensation at the rate ofEighty-Six Dollars and
54/1 OO'h cents ($86.54) per hour according to the payroll schedule in place for CITY employees paid
bi-weekly subject to the limitations provided below.
2.1.1 Compliance with CaiPERS requirements. It is the intent of the parties to
compensate PENMAN only to the extent permitted under Government Code § 2122l(h) and
corresponding CalPERS regulations and policy statements. The Rate ofPay set forth above is based
on the salary limitations established by CalPERS and is calculated by taking less than the maximum
monthly base salary paid to the prior City Manager as listed on a publicly available pay schedule for
the position of City Manager. The prior City Manager was paid $206,506 atmually divided by 12
months divided by 173.333 to equal an hourly rate of$99.28. The prior City Manager was also paid
benefits, to which PENMAN shall not be entitled. PENMAN will be compensated at the lesser rate
of $86.54 per hour. In no event shall compensation paid to PENMAN by CITY under this
Agreement exceed $110,771 over the tenn of this Agreement.
2.1.2 Recordation atld Reporting ofHours Worked. PENMAN will comply with all
applicable CalPERS regulations governing employment after retirement, including the recordation
and reporting of all hours worked for CITY to CalPERS as may be required. CITY shall assist in any
such reporting obligations to CalPERS. Additionally, PENMAN shall keep CITY continually
apprised of any hours worked by PENMAN for other CalPERS Agencies during the term of this
Agreement.
2.2 Benefits.
2.2.1 No Benefits. Pursuant to Govenunent Code §21221(h) and related CalPERS
regulations and policy statements, PENMAN shall not receive from CITY any benefits CITY
commonly provides to its employees, including without limitation health, dental, or vision insurance
coverage, life insurance, gym programs, employee assistance progratns, and similar benefits.
3. Vacation and Leave.
3.1 No Leave. PENMAN and CITY agree that PENMAN, in accordance with
Government Code Section 21221 (h) and related CalPERS regulations and policy statements shall not
be provided or accrue any personal time off, vacation, sick leave, administrative lease, paid holidays
or similar leave benefits.
4. Termination.
4.1 By CITY. This Agreement may be terminated by CITY for any reason thirty (30)
days after notice in writing to PENMAN of such termination. CITY's only obligation in the event of
such tennination will be payment to PENMAN of all compensation then due and owing as set forth
in Section 2.1 [Rate of Pay] up to and including the effective date of tennination. However, this
Agreement may be tenninated immediately if necessitated by changes to CalPERS statutory or
regulatory requirements.
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4.2 By PENMAN. This Agreement may be tenninated by PENMAN for any reason
thirty (30) days after notice in writing to CITY of such tennination. CITY shall have the option, in
its complete discretion, to make PENMAN's tennination effective at any time prior to the end of
such period, provided CITY pays PENMAN all compensation as set forth in Section 2.1 [Rate of
Pay] then due and owing him through the last day actually worked.
4.3 No Notice for Expiration. Nothing in this Section 4 [Termination] shall be
construed to require either party to give advance written notice in order for the Agreement to expire
as set forth in Section 1.2 [Term].
4.4 Termination Obligations. PENMAN agrees that all property, including, without
limitation, all equipment, tangible Proprietary Infonnation (as defined below), documents, records,
notes, contracts, and computer-generated materials fumishcd to or prepared by him incident to his
employment belongs to CITY and shall be returned promptly to CITY upon termination of
PENMAN's employment. PENMAN's obligations under this subsection shall survive the
termination of his employment and the expiration of this Agreement.
4.5 Benefits Upon Termination. All benefits to which PENMAN is entitled under this
Agreement shall cease upon PENMAN's tennination in accordance with this Section 4, unless
expressly continued either under this Agreement, under any specific written policy or benefit plan
applicable to PENMAN, or unless otherwise required by law.
5. Proprietary Information.
"Proprietary Information" is all information and any idea pertaining in any mam1er to the
business of CITY (or any CITY affiliate), its employees, clients, consultants, or business associates,
which was produced by any employee of CITY in the course of his/her employment or otherwise
produced or acquired by or on behalf of CITY. Proprietary Information shall include, without
limitation, trade secrets, product ideas, inventions, processes, formulae, data, know-how, software
and other computer programs, copyrightable material, marketing plans, strategies, sales, f1nancial
reports, forecasts, and customer lists. All Proprietary Information not generally known outside of
CITY's organization, and all Proprietary Information so known only through improper means, shall
be deemed "Confidential Information." During his employment by CITY, PENMAN shall use
Proprietary Information, and shall disclose Confidential Infonnation, only for the benefit of CITY
and as is or may be necessary to perform his job responsibilities under this Agreement. Following
tennination, PENMAN shall not use any Proprietary Information and shall not disclose any
Confidential Information, except with the express written consent of CITY. PENMAN's obligations
under this Section shall survive the tennination of his employment and the expiration of this
Agreement.
6. Conflict Of Interest.
PENMAN represents and warrants to CITY that he presently has no interest, and represents
that he will not acquire any interest, direct or indirect, t1nancial or otherwise, which would conflict in
any manner or interfere in any way with perfonnance of his services under this Agreement.
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7. General Provisions.
7.1 Recitals. The recitals, inclusive of all facts and representations, are incorporated into
this Agreement as if set forth in the Operative Provisions.
7.2 Vehicle Operation. PENMAN shall operate any vehicle used in connection with the
performance of his duties as Interim City Manager in a safe manner and otherwise in observance of
all established traffic safety laws and ordinances and shall maintain a valid California automobile's
driver's license during the period of employment.
7.3 Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be effective upon delivery by hand or three (3) business days
after deposit in the United States mail, postage prepaid, certified or registered, and addressed to
CITY at the address below, and or at the last known address maintained in PENMAN's personnel
file. PENMAN agrees to notifY CITY in writing of any change in his address during his employment
with CITY. Notice of change of address shall be effective only when accomplished in accordance
with this Section.
City's Notice Address:
City of Temple City
9701 Las Tunas Drive
Temple City, CA 917803
Attn: Mayor and City Council
Interim Cit"y Manager's Address:
Donald E. Penman
[Deliver to last updated address in persmmel file]
7.4 Indemnification. Subject to, in accordance with, and to the extent provided by the
California Tort Claims Act [Government Code Section 810 et seq.] CITY will indemnifY, defend,
and hold PENMAN harmless from and against any action, demand, suit, monetary judgment or other
legal or administrative proceeding, and any liability, injury, loss or other damages, arising out of any
act or omission occurring during PENMAN's tenure as Interim City Manager.
7.5 Bonding. CITY shall bear the full cost of any fidelity or other bonds required of the
Interim City Manager under any law or ordinance.
7.6 Integration. This Agreement is intended to be the final, complete, and exclusive
statement of the tenns ofPENMAN's employment by CITY. This Agreement supersedes all other
prior and contemporaneous agreements and statements, whether written or oral, express or implied,
pertaining in any manner to the employment of PENMAN, and it may not be contradicted by
evidence of any prior or contemporaneous statements or agreements. To the extent that the practices,
policies, or procedures of CITY, now or in the future, apply to PENMAN and are inconsistent with
the terms of this Agreement, the provisions of this Agreement shall control.
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7.7 Amendments. This Agreement may not be amended except in a written document
signed by PENMAN, approved by the City Council and signed by CITY's Mayor.
7.8 Waiver. Failure to exercise any right under this Agreement shall not constitute a
waiver of such right.
7.9 Assignment. PENMAN shall not assign any rights or obligations under this
Agreement. CITY may, upon prior written notice to PENMAN, assign its rights and obligations
hereunder.
7.10 Severability. If a comi or arbitrator holds any provision of this Agreement to be
invalid, nnenforceable, or void, the remainder of this Agreement shall remain in full force and effect.
7.11 Attorneys' Fees. In any legal action, arbitration, or other proceeding brought to
enforce or interpret the tenns of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and costs.
7.12 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Califomia, with venue proper only in Los Angeles County, State of
Califomia.
7.13 Interpretation. This Agreement shall be construed as a whole, according to its fair
meaning, and not in favor of or against any party. By way of example and not in limitation, this
Agreement shall not be constmed in favor of the party receiving a benefit nor against the party
responsible for any particular language in this Agreement. Captions are used for reference purposes
only and should be ignored in the interpretation of the Agreement. This Agreement may be altered,
amended or modified only by an instrument in writing, executed by the parties to this Agreement and
by no other means. Each party waives their future right to claim, contest or asse1i that this
Agreement was modified, cancelled superseded or changed by any oral agreement, course of
conduct, waiver or estoppel.
7.14 Acknowledgment. PENMAN acknowledges that he has had the 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.
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IN WITNESS WHEREOF, CITY has caused this Agreement to be signed and executed on
its behalfby its Mayor and duly attested to by its City Clerk, and PENMAN has signed and executed
this Agreement, as of the date first indicated above.
INTERIM CITY MANAGER CITY OF TEMPLE CITY
Donald E. Penman Cynthia Stemquist, Mayor
ATTEST: APPROVED AS TO FORM:
Peggy Kuo, City Clerk Eric S. Vail, City Attorney
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