Item E-2 Agenda Report — Beverly Hills City Council, September 30, 2025

Page 1 of 4 ends

AGENDA REPORT
Meeting Date: September 30, 2025
Item Number:

To: Honorable Mayor & City Council
From: Shelley Ovrom, Director of Human Resources
Peter Brown, Labor Negotiator
Subject: CONDUCT A PUBLIC HEARING REGARDING THE IMPASSE

BETWEEN THE CITY OF BEVERLY HILLS AND BEVERLY HILLS
MANAGEMENT AND PROFESSIONAL EMPLOYEES ASSOCIATION;
AND

CONSIDERATION OF A RESOLUTION OF THE COUNCIL OF THE

CITY OF BEVERLY HILLS IMPLEMENTING THE TERMS OF ITS

LAST, BEST AND FINAL OFFER TO THE BEVERLY HILLS

MANAGEMENT AND PROFESSIONAL EMPLOYEES ASSOCIATION
(BHM&P)
Attachments: 1. City of Beverly Hills Last, Best and Final Offer March 5, 2025

2. Declaration of Impasse March 17, 2025

3. Factfinding Report August 4, 2025

4. Government Code Sections 3505.4 through 3505.7

5. Resolution Implementing City’s Last, Best, and Final Offer

RECOMMENDATION
Consider public testimony and provide direction regarding the impasse process with the Beverly Hills Management and Professional Employees Association (M&P).

E-2
Meeting Date: September 30, 2025

Page 2 of 4 ends

INTRODUCTION
The current Memorandum of Understanding (MOU) between the City and the M&P (with a term of October 7, 2023 – October 2, 2026) contains a pay for performance program (PFP) that allows employees in the unit to earn additional compensation based on whether they receive a performance evaluation that satisfies certain criteria. In the same PFP provision, the parties also agreed to a reopener (see below) to modify the performance evaluation process and its impact on the PFP Program. Through the reopener, the parties agreed they would negotiate over changes related to the performance evaluation process and its impact on the PFP Program. Here is the provision:

A. Pay for Performance Program
The City strives to be a high performance organization, to recognize employees as our most important resource, and to value them for their adaptability, dedication, initiative and contributions to meaningful results. The Management and Professional employees are expected to be among the top performing employees in the City. It is through their leadership and performance that the City can achieve its goal of being a high performance organization.

To achieve the goal of high performance, the parties have established this Pay for Performance Program. Under the plan any member of the unit shall be eligible to receive an annual lump sum payment effective at the beginning of the payroll period following which the employee’s eligibility is established.

The determination as to whether an employee is eligible for Pay for Performance is based on whether they receive a performance evaluation which satisfies the following criteria: 1) the employee receives a total of at least eight (8) points for the ratings of performance categories, valued as follows: two points for each rating of “Exceeds Often” (EP) and one point for each rating of “exceeds sometimes” (ES); and 2) the employee does not receive any performance rating of “Unsatisfactory.”
If an employee is evaluated in nine (9) of the ten (10) categories on the evaluation, they will be eligible for PFP pay if they receive a total of at least seven (7) points for the ratings on the performance categories. If they are evaluated in either eight (8) or seven (7) of the ten (10) categories on the evaluation, they will be eligible for PFP pay if they receive a total of at least six (6) points. In addition, the parties agree to a reopener regarding the City’s modification to the Performance Evaluation process (including the form) and its impact on the Pay for Performance Program during the term of this MOU.

The City initiated negotiations (i.e., the reopener) in August 2024 to establish a new performance evaluation. The new proposed evaluation has eight (8) rating categories and four (4) levels of performance ratings: Exceeds Expectations, Meets Expectations, Needs Improvement, and Unsatisfactory.

Along with establishing an updated evaluation, the City proposed changes to the evaluation period for employees to align with the PFP Program, which is administered on Meeting Date: September 30, 2025

Page 3 of 4 ends

a fiscal year basis. The M&P tentatively agreed to both the new evaluation and aligning the evaluation period of employees with the PFP Program. The parties passed proposals back and forth regarding how the new evaluation would impact PFP and the following were the last proposals from both the City and the M&P:

City: To be eligible for PFP, an employee must receive at least four (4) categories marked Exceeds Expectations with a maximum of one (1) category marked Needs Improvement
M&P: To be eligible for PFP, an employee must receive at least three (3) categories marked “Exceeds Expectations” and no categories marked Needs Improvement
The significant difference in these proposals is that the City proposed that at least four (4) of the eight (8) categories on the evaluation be rated as Exceeds Expectations and the M&P wanted the required number of Exceeds Expectation ratings to be three (3).

The City issued its last best and final offer on March 5, 2025. When the offer was not accepted, the City declared impasse on March 17, 2025. The M&P then requested that the parties’ differences be submitted to factfinding. Under the state collective bargaining law, after impasse is declared, the labor organization can request factfinding. The M&P made this request to the Public Employment Relations Board. The parties selected a neutral to chair the factfinding panel and then scheduled July 9 for the factfinding hearing.

The hearing was an opportunity for both sides to present their positions. The factfinding panel chair then issued a document called a “Factfinding Report and Recommendations for Settlement”. The panel members for both the City and the M&P responded with comments or dissenting thoughts.

The final factfinding report was issued on August 4, 2025. The factfinding report was made publicly available on the City’s website on August 13, 2025.

DISCUSSION
Through its designated labor negotiator, the City Council asserted to the M&P its position in the labor negotiations as to why it wanted to modify the eligibility for Pay for Performance Pay based on the new evaluation categories to which the parties had tentatively agreed.

At this public hearing, the City Council will provide an opportunity for its labor negotiator to provide a presentation to the public regarding the issues in these negotiations and an opportunity for the M&P’s labor negotiator to present their position. The City Council will also receive comments from the public regarding the impasse with the M&P.

Following this public hearing, the City Council may, if it chooses, implement its Last, Best and Final Offer. In this case, the City Council may consider adopting or modifying the attached draft resolution to implement the Last, Best and Final Offer.

Meeting Date: September 30, 2025

Page 4 of 4 ends

FISCAL IMPACT
The proposed changes to the performance evaluation and pay for performance program do not result in any cost increases. Funding for the PFP program will remain the same resulting in no fiscal impact.

Shelley Ovrom
Director of Human Resources
Approved By
Attachment 1
1 Marco Bernocchi
From: Peter J. Brown <[email protected]>
Sent: Wednesday, March 5, 2025 6:24 PM
To: 'Robert Wexler ([email protected])'
Cc: Shelley Ovrom; Kirsten Rowe
Subject: M&P Pay for Performance Proposal
Attachments: Pay for Performance Program Section of MOU March 5.docx; Proposed MP Employee Performance Evaluation_Association Review.docx
Rob:

Thank you for the meeting with M&P on March 3. This was a follow up to the meeting we had on January 8 regarding our reopener negotiations on the performance evaluation and modifications to the pay for performance language in the parties’ MOU. While the City appreciates the dialogue, after considering the discussion, our position has not changed. We believe that an employee should exceed expectations in at least half of the rating categories of the new evaluation form to be eligible for pay for performance pay. The attached version of the language addresses the concern raised at the meeting that if an evaluation is not issued by June 30 (since all evaluations will be due that day) there is a process for contacting HR to ensure issuance of the evaluation. However, that is the only change from the language I sent on February 7. Please consider this as the City’s last, best and final offer. Please let me know by Wednesday, March 13 if this acceptable.

Peter
_____________________________________________________________ Peter J. Brown | Partner
6033 West Century Boulevard, 5th Floor
Los Angeles, CA 90045
tel: 310.981.2000 | dir: 310.981.2030
fax: 310.337.0837 | cell: 310.923.0320
[email protected] | vCard | Bio | Website
______________________________________________________________ This electronic communication contains information that is confidential, legally privileged, and proprietary. The information contained in this communication is intended only for use by the designated individual or entity. If the reader is not the intended recipient of this communication, the reader is hereby notified that any reliance on the information contained herein is taken at reader’s own risk and any dissemination, distribution or copy of this information is strictly prohibited. If you have received this communication in error, please notify our office immediately by calling 800-645-2696 or reply to this communication and then delete the communication.
2 From: Peter J. Brown <[email protected]>
Sent: Friday, February 7, 2025 5:32 PM
To: 'Robert Wexler ([email protected])' <[email protected]> Cc: Shelley Ovrom <[email protected]>; Kirsten Rowe <[email protected]> Subject: M&P Pay for Performance Proposal
Rob:

We appreciate meeting with M&P last month regarding the Pay for Performance discussion. I know we had said we would likely make a last, best and final offer. But we need to make a proposal with draft language to address the transition period as well. As such, attached is both the proposed evaluation form that M&P had indicated was acceptable as well as proposed language to modify the Pay for Performance Plan. Take a look at the attached and then let’s set up a meeting to go over the attached. I will call you next week to schedule a meeting. It can be virtual.

Have a nice weekend.

B. Pay for Performance Program
The City strives to be a high performance organization, to recognize employees as our most important resource, and to value them for their adaptability, dedication, initiative and contributions to meaningful results. The Management and Professional employees are expected to be among the top performing employees in the City. It is through their leadership and performance that the City can achieve its goal of being a high performance organization.

To achieve the goal of high performance, the parties have established this Pay for Performance Program (PFP). Under the Program,plan any member of the unit shall be eligible to receive an annual lump sum payment effective at the beginning of the payroll period following which the employee’s eligibility is established. Effective July 1, 2025, eligibility for the PFP lump sum payment will be effective at the end of each fiscal year, i.e., on June 30th each year.

For the purposes of the Pay for Performance (PFP) program, the City agrees that members of the unit shall be evaluated annually upon their annual evaluation date (usually the anniversary of the date the employee was hired or promoted into their position). Effective July 1, 2025, evaluations will be transitioned to a fiscal year evaluation cycle. To accomplish this transition, employees will be evaluated per the following schedule:

1. Employees in the unit who received a performance evaluation between July 1, 2024 and June 29, 2025 will have that evaluation used to determine eligibility for their PFP payment as set forth below. Thereafter, these employees’ evaluation cycle will be from July 1 to June 30 of each fiscal year with their next evaluation due June 30, 2026.

2. Employees in the unit who did not receive a performance evaluation between July 1, 2024 and June 29, 2025 are due to receive a performance evaluation on June 30, 2025. This evaluation will used to determine eligibility for their PFP payment as set forth below.

These employees’ next evaluation will be each year thereafter on June 30.

3. Employees in the unit who were hired or promoted after July 1, 2024 (whose evaluation would have been due one year later) will have their evaluation due date moved to June 30, 2025. These employees will not be eligible for PFP based on this evaluation since they will not be in their position for a full twelve (12) months. They will be eligible for PFP with their next evaluation which is due on June 30, 2026.

4. For all employees in the unit, the future evaluation cycle will end on June 30 each year.

Employees who do not receive their annual performance evaluation by July 15 within 45 days of its due date, may contactfile a request with the Human Resources Department to assist in ensuring the evaluation is issued, so that if the employee is eligible for issuance of the evaluation, including an assessment of their Pay for Performance pay it will be paid no later than September 1 as described below. The Human Resources Department will contact the City Manager’s office to help ensure the evaluation is issued within 30 days.

The determination as to whether an employee is eligible for Pay for Performance is based on whether they receive a performance evaluation in which they receive at least four (4) of the eight (8) rating categories marked Exceeds Expectations with a maximum of one (1) category marked Needs Improvement. satisfies the following criteria: 1) the employee receives a total of at least eight (8) points for the ratings of performance categories, valued as follows: two points for each rating of “Exceeds Often” (EP) and one point for each rating of “exceeds sometimes” (ES); and 2) the employee does not receive any performance rating of “Unsatisfactory.” If an employee is evaluated in nine (9) of the ten (10) categories on the evaluation, they will be eligible for PFP pay if they receive a total of at least seven (7) points for the ratings on the performance categories. If they are evaluated in either eight (8) or seven (7) of the ten (10) categories on the evaluation, they will be eligible for PFP pay if they receive a total of at least six (6) points. In addition, the parties agree to a reopener regarding the City’s modification to the Performance Evaluation process (including the form) and its impact on the Pay for Performance Program during the term of this MOU. If negotiations regarding modifications to the Performance Evaluation process (including the form) are not completed prior to June 30, 2024, the parties agree that the above shall continue until such time those negotiations are completed.

Employees are eligible to receive up to five percent (5%) of their base salary for Pay for Performance in a lump sum payment. If the employee is eligible for Pay for Performance, the Department Head of the employee will determine the Pay for Performance award.

Evaluations will be issued in accordance with the employee’s normal evaluation period. However, tThe determination of PFP awards for all employees who meet the established eligibility criteria will be made following the end of each fiscal year (no later than 60 days following the end of the fiscal year). As an example: An employee whose evaluation period is January 15th – January 14th each year will be eligible for PFP after the end of the Fiscal Year ( - no later than September 1).

The parties agree that to the extent permitted by law, Pay for Performance pay is special compensation for “classic member” employees as defined in Exhibit C to this MOU and shall be reported as such pursuant to Title 2 CCR, Section 571(a)(1) Incentive Pay - Bonus.

Proposed M&P Employee Performance Evaluation

1. Rating Category: Core Responsibilities
a. Factors:
i. Job knowledge
ii. Performance of job duties
iii. Consistency
iv. Contribution
b. Ratings (Suggested Guidelines)
i. Exceeds Expectations

1. Demonstrates exceptional knowledge of their job responsibilities

2. Goes above and beyond in their work

3. Performs job duties at an exceptional level

4. Contributes to the success of the department and the City ii. Meets Expectations

1. Exhibits a strong understanding of their job responsibilities

2. Possesses necessary skills to perform job duties effectively

3. Consistently performs duties effectively

4. Often contributes to the success of their team
iii. Needs Improvement

1. Struggles in areas related to their job knowledge

2. May require additional training to effectively perform job duties

3. Does not consistently perform job duties

4. Does not consistently contribute to the success of the team iv. Unsatisfactory

1. Job knowledge is significantly below expectations

2. Does not display necessary skills and understanding of their role

3. Displays disinterest or unwillingness to learn or improve job knowledge

4. Does not contribute to the successful functioning of division/department

2. Rating Category: Customer Service
a. Factors:
i. Customer Communication
ii. Responsiveness and Follow-Up
iii. Professionalism
iv. Follows City/Department Expectations
b. Ratings (Suggested Guidelines)
i. Exceeds Expectations

1. Provides clear, concise, and accurate communication with customers, always mindful of their audience and individual needs

2. Provides timely responses before deadlines

3. Excels at interactions with customers while maintaining professional demeanor, and often going the extra mile to ensure customer satisfaction

4. Always follows established expectations/policies and procedures while working with customers
ii. Meets Expectations

1. Generally communicates well with customers and provides clear and accurate information

2. Often follows-up with customers in a timely manner

3. Professionally addresses customers and their needs

4. Consistently follows established expectations/policies and procedures while working with customers
iii. Needs Improvement

1. Displays difficulty communicating with customers

2. Does not consistently follow-up on pending customer needs in a timely manner

3. Customer interactions may not always remain professional or meet the expectations of the department

4. Has occasionally not followed City customer service
expectations/policies and procedures
iv. Unsatisfactory

1. Lacks necessary communication skills to provide adequate customer service

2. Does not follow-up on pending customer needs

3. Consistently unprofessional during customer interactions

4. Consistently fails to follow City customer service expectations/ policies and procedures

3. Rating Category: Communication Skills
a. Factors:
i. Listening
ii. Facilitation
iii. Conflict Resolution
iv. Written and Verbal Communication
b. Ratings (Suggested Guidelines)
i. Exceeds Expectations

1. Engages in active listening and responds proactively to feedback

2. Facilitates open and honest discussion promoting a positive work environment

3. Leverages excellent communication skills to resolve conflicts effectively and efficiently

4. Demonstrates exceptional written and verbal communication across multiple channels
ii. Meets Expectations

1. Typically engages in active listening and responds to feedback

2. Contributes to a positive work environment by maintaining open lines of communication

3. Utilizes good communication skills to assist with conflict resolution

4. Demonstrates good written and verbal communication skills iii. Needs Improvement

1. Has difficulty engaging in active listening and responding appropriately to feedback

2. Has difficulty fostering a positive work environment through good communication

3. Displays difficulty in adapting communication skills to assist with conflict resolution

4. Requires further development of written and/or verbal communication skills
iv. Unsatisfactory

1. Rarely engages in active listening or provide appropriate responses to feedback

2. Consistently ignores or dismisses valuable feedback from colleagues regarding communication issues

3. Contributes to conflicts within the team through poor communication skills

4. Consistently demonstrates written and verbal communication deficiencies

4. Rating Category: Teamwork
a. Factors:
i. Collaboration
ii. Accountability
iii. Conflict Resolution
iv. Fosters Inclusive Work Environment
b. Ratings (Suggested Guidelines)
i. Exceeds Expectations

1. Collaborates effectively with others, including cross-departmentally, remaining open minded and willing to entertain others’ ideas

2. Takes accountability for their mistakes or errors, and/or those of their team.

3. Eagerly and actively engages in problem solving to support conflict resolution

4. Fosters, supports, and contributes to an inclusive and cooperative work environment
ii. Meets Expectations

1. Consistently collaborates effectively with their colleagues

2. Consistently takes accountability for their mistakes or errors, and/or those of their team.

3. Consistently resolves conflicts professionally

4. Works to foster an inclusive and cooperative work environment iii. Needs Improvement

1. Requires support to enhance collaborative capabilities

2. Often fails to take accountability for their actions and decisions, and often blames others for mistakes or errors

3. Improvement is needed in their conflict resolution skills

4. Does not consistently foster an inclusive and cooperative work environment
iv. Unsatisfactory

1. Exhibits a reluctance or a negative attitude towards team collaboration

2. Readily attributes blame to others

3. Consistently fails to resolve conflicts in a satisfactory manner

4. Fails to foster an inclusive and cooperative work environment

5. Rating Category: Safety Protocols
a. Factors:
i. Follows Safety Protocols/Procedures
ii. Reports Hazards
b. Ratings (Suggested Guidelines)
i. Exceeds Expectations

1. Proactively works to improve workplace safety

2. Reports hazards in the workplace and contributes to the mitigation of those hazards
ii. Meets Expectations

1. Consistently adheres to all safety policies and procedures

2. Consistently reports hazards in the workplace
iii. Needs Improvement

1. Has occasionally not adhered to safety policies and procedures

2. Does not consistently report safety hazards in the workplace iv. Unsatisfactory

1. Fails to adhere to safety policies and procedures

2. Does not report hazards in the workplace

6. Rating Category: Judgement and Decision Making
a. Factors:
i. Performs research / due diligence
ii. Considers and applies known facts and/or information in exercising judgement
iii. Provides updates to supervisor/manager
iv. Learns from mistakes and draws upon previous experiences in exercising judgement
b. Rating (Suggested Guidelines)
i. Exceeds Expectations

1. Makes sound decisions

2. Demonstrates exceptional judgement in all situations

3. Proactively provides updates to supervisor or manager

4. Learns from mistakes and adjusts accordingly
ii. Meets Expectations

1. Consistently makes sound decisions

2. Demonstrates good judgement in most situations

3. Provides updates to supervisor or manager when prompted

4. Generally learns from mistakes and seeks help from others when necessary
iii. Needs Improvement

1. Occasionally makes poor decisions

2. Demonstrates poor judgement in some situations

3. Occasionally fails to provide updates to supervisor or manager

4. Does not consistently learn from mistakes or seek help from others when necessary
iv. Unsatisfactory

1. Consistently makes poor decisions

2. Demonstrates poor judgment in most situations

3. Fails to provides updates to supervisor or manager

4. Does not learn from mistakes and repeats them; does not seek help from others

7. Rating Category: Management of People, Projects, and/or Programs a. Management of People
i. Factors:

1. Motivating Others / Goal Setting

2. Approachability

3. Interpersonal Skills

4. Performance Evaluations
ii. Ratings (Suggested Categories)

1. Exceeds Expectations
a. Proactively takes time to talk with team members to build a sense of team and camaraderie; sets clear goals and
expectations and holds employees accountable for
achieving goals
b. Demonstrates empathy towards coworkers and employees and creates an open environment where their employees are comfortable approaching them as supervisor; manages
questions and conflicts exceptionally well
c. Demonstrates and builds a harmonious work environment and effectively communicates thoughts and ideas to their team
d. Is proactive in completing timely performance evaluations and creates performance evaluations that are meaningful with thoughtful and constructive feedback

2. Meets Expectations
a. Provides motivation through leadership; sets goals for employees
b. Is accessible to the team if any questions, conflicts, or issues arise
c. Effectively communicates thoughts and ideas to their team d. Completes evaluations within 30 days of employee’s
anniversary date, and creates performance evaluations that meet expectations of a supervisor

3. Needs Improvement
a. Does not consistently set clear goals and expectations b. Sometimes avoids interactions with team members
c. Can dominate conversations without allowing input from others, fails to recognize non-verbal cues from other people, and/or does not engage with employees
d. Completes evaluations within 60 days of employee’s
anniversary date, and struggles to create performance
evaluations that are meaningful

4. Unsatisfactory
a. Fails to provide effective motivation (e.g. only motivates by fear and/or threat of discipline); does not set clear goals/ expectations and/or does not hold employees accountable for achieving goals
b. Lacks communication skills, and unapproachable demeanor leads employees to go to different supervisors for questions or interaction
c. Fails to demonstrate basic empathy or understanding of other’s needs
d. Completes evaluations over 60 days from employee’s
anniversary date or has failed to complete evaluations, and evaluations do not meet minimum expectations of a
supervisor
b. Management of Projects/Programs
i. Factors:

1. Organizational Skills

2. Deadlines

3. Prioritization

4. Budget and Contract Management
ii. Ratings (Suggested Categories)

1. Exceeds Expectations
a. Exceptional organizational skills on all projects and tasks b. Meets or exceeds deadlines that are under the employee’s control
c. Consistently and effectively prioritizes tasks and multiple projects with input as needed
d. Proactively monitors project budget and effectively manages contracts

2. Meets Expectations
a. Effectively organizes tasks and projects
b. Consistently meets deadlines that are under the employee’s control or provides reasonable justification for schedule changes
c. Is successful in prioritizing tasks with input as needed d. Ensures that project stays within budget and exercises expected level of contract oversight

3. Needs Improvement
a. Inconsistent organization of tasks and projects
b. Occasionally misses deadlines due to reasons under
employee’s own control
c. Occasionally unable to prioritize tasks and needs assistance in setting task priorities
d. Requires assistance in monitoring project budget and managing contracts

4. Unsatisfactory
a. Disorganized approach to tasks and projects
b. Consistently fails to meet deadlines
c. Consistently unable prioritize tasks without assistance d. Fails to monitor project budget or exercise effective cost controls, and allows contracts to exceed budget or scope of work

8. Rating Category: Initiative and Innovation
a. Factors:
i. Proactive
ii. Adaptability
iii. Innovative
b. Ratings (Suggested Categories)
i. Exceeds Expectations

1. Is highly proactive in identifying, researching, and implementing new strategies to improve efficiency

2. Expertly adapts to new situations and embraces change with creative solutions

3. Consistently generates innovative ideas that directly contribute to the success of the team
ii. Meets Expectations

1. Consistently generates creative ideas to improve existing processes

2. Able to adapt to new situations or processes

3. Contributes creative ideas during brainstorming sessions iii. Needs Improvement

1. Struggles to think outside of the box and come up with new ideas or approaches to problems

2. Shows limited adaptability in new situations

3. Struggles to think creatively
iv. Unsatisfactory

1. Often fails to recognize or acknowledge problems, and does not develop new ideas or solutions to problems

2. Resistant to change (e.g. becomes overly defensive or combative) when asked to adapt to new situations or processes

3. Disinterested in seeking innovative opportunities or solutions Attachment 2
City of Beverly Hill’s Written Declaration of Impasse
Related to its Negotiations with the
Beverly Hills Management and Professional Employees Association Following Rejection of the City’s Last, Best and Final Offer Issued to the Association on March 5, 2025
March 17, 2025
In accordance with Government Code section 3505.4 and Title 8 of the California Code of Regulations section 32802, the City of Beverly Hills declares impasse to these negotiations. This notice shall constitute written notice of the declaration of impasse.

Attachment 3
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
FACTFINDING REPORT AND RECOMMENDATIONS FOR SETTLEMENT - 1

IN THE FACTFINDING PROCEEDINGS

PURSUANT TO THE MEYERS-MILIAS-BROWN ACT

CITY OF BEVERLY HILLS,
Employer,
&

BEVERLY HILLS MANAGEMENT AND
PROFESSIONAL EMPLOYEES’

ASSOCIATION,
Association
Case No.: LA-IM-346-M

FACTFINDING REPORT AND

RECOMMENDATIONS FOR

SETTLEMENT
Chairperson: Najeeb N. Khoury
Employer Panel Member: Peter Brown, Liebert Cassidy Whitmore Association Panel Member: Robert Wexler, Rains, Lucia & Stern Hearing Date: July 09, 2025

BACKGROUND
The Beverly Hills Management and Professional Employees’ Association (“Association”) represents management and professional employees at the City of Beverly Hills (“Employer” or “City”).

The parties’ relationship is currently governed by an MOU that runs from October 7, 2023 to October 2, 2026. The MOU has a reopener clause covering performance evaluations and a corresponding pay for performance plan (“PFP”). The parties reopened the MOU on those subjects and reached conceptual agreements on changes to the performance evaluations as well as the transition period to using the new evaluations. However, they could not reach agreement 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
FACTFINDING REPORT AND RECOMMENDATIONS FOR SETTLEMENT - 2 on the criteria needed for employees to qualify for the PFP. During bargaining, each side made movement from their original positions; however, this did not resolve the parties’ differences.

The City’s final proposal required that employees receive “Exceeds Expectations” on four (4) of the eight (8) categories on the new Performance Evaluation plan in order to be eligible for the PFP, and the Association countered that an employee must receive “Exceeds Expectations” on three (3) of the eight (8) categories to be eligible and cannot receive a “Needs Improvement” rating in any category on the Performance Evaluation.

The City declared impasse on March 17, 2025 on the sole issue of the PFP criteria, and the Association made a factfinding request to the Public Employment Relations Board (PERB) on April 14, 2025. The parties selected me to serve as the neutral factfinding panel chair. The factfinding hearing occurred on July 9, 2025, via Zoom.

ANALYTICAL FRAMEWORK
Unlike interest arbitration, where a third-party neutral sets the terms of a new contract, a third-party neutral chair in a Meyers-Milias-Brown Act (MMBA) factfinding simply provides recommendations. In essence, this makes factfinding an extension of bargaining. Ultimately, the parties must persuade one another of their positions, and the neutral factfinder simply provides an outside perspective to help the parties along.

As set forth in California Government Code Section 3505.4(d), the MMBA requires factfinders to “consider, weigh, and be guided” by the following criteria:

1. State and federal laws that are applicable to the employer.

2. Local rules, regulations, or ordinances.

3. Stipulation of the parties.

4. The interests and welfare of the public and the financial ability of the public agency. 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
FACTFINDING REPORT AND RECOMMENDATIONS FOR SETTLEMENT - 3

5. Comparison of the wages, hours, and conditions of employment of the employees involved in the factfinding proceeding with the wages, hours, and conditions of other employees performing similar services in comparable public agencies.

6. The consumer price index for goods and services, commonly known as the cost of living.

7. The overall compensation presently received by the employees, including direct wage compensation, vacations, holidays, and other excused time, insurance and pensions, medical and hospitalization benefits, the continuity and stability of employment, and all other benefits received.

8. Any other facts, not confined to those specified in paragraphs (1) to (7), inclusive, which are normally and traditionally taken into consideration in making the findings and recommendations.

In this case, none of the factors is directly relevant. However, neutral factfinders have typically required the party seeking a change to the status quo to carry the burden of persuasion, and I will follow that convention in this case.

CURRENT PFP PROGRAM
Under the current PFP program, employees may receive annual lump sum payments of up to 5% of their base salary if they receive a certain number of points from their performance evaluations. Employees receive 2 points for an “Exceeds Standards Often” rating; one point for an “Exceeds Standards Sometimes” rating; zero points for a “Satisfactory” rating; are disqualified from the PFP for an “Unsatisfactory” rating; and are given zero points for an “Unrated/Inapplicable” rating. To become eligible for the lump sum, an employee must earn a cumulative score of 8 points or above on a performance evaluation AND must not have received 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
FACTFINDING REPORT AND RECOMMENDATIONS FOR SETTLEMENT - 4 an unsatisfactory rating in any of the ten (10) categories on the performance evaluation. Even if an employee becomes eligible, the employee’s respective Department Head determines the value of the PFP award and has the discretion not to award a lump sum to an eligible employee.

CITY’S POSITION
The City proposes changing the performance evaluation to contain eight categories instead of ten. The City’s proposed eight categories are:

1. Core employee responsibilities, with sub-factors of job knowledge, performance of job duties, consistency, and contribution.

2. Consumer service, with sub-factors of customer communication, responsiveness and follow-up, professionalism, and following city/department expectations.

3. Communication skills, with sub-factors of listening, facilitation, conflict resolution, and written and verbal communications.

4. Teamwork, with sub-factors of collaboration, accountability, conflict resolution, and fostering an inclusive work environment.

5. Safety protocol, with sub-factors of following safety protocols/procedures and reporting hazards.

6. Judgement and decision-making skills, with sub-factors of performance research/due diligence, considering and applying known facts and/or information in exercising judgement, providing updates to supervisors and managers, and learning from mistakes and drawing upon previous experiences in exercising judgement.

7. Management of People and Projects/Programs, with two sub-categories accompanied by relevant sub-factors:
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
FACTFINDING REPORT AND RECOMMENDATIONS FOR SETTLEMENT - 5 a. Management of People, with sub-factors of motivating others/goal setting, approachability, interpersonal skills, and performance evaluations. b. Management of Projects/Programs, with sub-factors of organizational skills, deadlines, prioritization, and budget and contract management.

8. Initiative and Innovation, with sub-factors of proactivity, adaptability, and innovation.

In addition to changing the ratings categories, the City proposes changing the point system, with a new four-level point system whereby “Exceeds Expectations” would be worth one point, “Meets Expectations” would be worth zero points, “Needs Improvement” would be worth zero points, and an “Unsatisfactory” would be worth zero points.

The City also wants to change the eligibility requirements for the PFP such that an employee must receive an “Exceeds Expectations” rating on at least four (4) of the eight (8) ratings categories and must not receive more than one (1) “Needs Improvement” score across all ratings categories to qualify for the PFP program. Under the new system (like the old), an employee’s respective Department Head would still determine the value of the PFP award and would have the discretion not to award a lump sum to an eligible employee.

The City asserts that its new system is more equitable as some of the ratings factors in the current evaluation do not apply to all members of the Association, making it harder for those employees to accumulate the necessary points. It also argues that its proposed ratings system has an explanation for each rating system factor, which enables the rater to better assess the employee.

ASSOCIATION’S POSITION
The Association conceptually agrees with the new performance evaluation categories and the new ratings categories. However, it does not agree with the new proposed requirements for 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
FACTFINDING REPORT AND RECOMMENDATIONS FOR SETTLEMENT - 6 becoming eligible for the PFP program, and argues that they are more onerous than under the previous system.

Specifically, the Association notes that under the current performance evaluation system, employees receive points for both Exceeds Standards Often (2 points) and Exceeds Standards Sometimes (1 point), whereas under the proposed system, employees will only receive points for Exceeds Expectations (1 point). Additionally, the number of potential points one can receive in the current system is twenty but will only be eight in the proposed system.

The Association further points out that an employee under the proposed system needs to receive an Exceeds Standards on 50% of the performance evaluation categories to become eligible for the PFP, whereas under the current system, an employee can be eligible for the PFP without receiving the highest rating in any category as the second highest rating category is also awarded a point. For these reasons, the Association sees the City’s proposal as making it more difficult to become eligible for the PFP.

The City responds that its goal is not to make qualification for the PFP more restrictive, and it plans on budgeting the same number of dollars for the program. Rather, it is attempting to clarify the process and make it more equitable.

RECOMMENDATION
As mentioned above, neutral factfinders have typically required the party seeking a change to the status quo to carry the burden of persuasion, and I will follow that convention in this case. Here, the City seeks two changes from the status quo.

First, it seeks to change the performance evaluation system. Specifically, it seeks to use eight criteria instead of ten in evaluating employees. The City has attempted to design the eight criteria to apply to all bargaining unit members, whereas the old system often had factors that 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
FACTFINDING REPORT AND RECOMMENDATIONS FOR SETTLEMENT - 7 were inapplicable to some bargaining unit members. The City also seeks to provide raters with greater clarity on how they should rate employees. The Association agrees that these updates are needed and has conceptually agreed to these changes. I, therefore, recommend that the parties adopt the new performance evaluation system.

Second, the City seeks to change the point system for how employees qualify for the PFP. The City insists that only employees who receive four or more Exceeds Standards out of eight categories should be eligible for the PFP program. The Association counters that employees who receive three or more Exceeds Standards and do not receive any “Needs Improvement” ratings should qualify for the PFP program.

The Association fears that the City’s proposal will make it more onerous to qualify for the PFP; the City states that is not the intent of its proposal.

I recommend adopting the City’s proposal for one year with the following caveat. Given that the main concerns are whether fewer bargaining unit members will qualify for the PFP and whether the same amount of funds will be spent on the program, I recommend that at the end of the first year of implementing the City’s proposal, the parties analyze the data to determine whether there has been a significant drop in the number of employees qualifying for the PFP and whether there has been a significant drop in the total amount of money paid to bargaining unit members under the PFP.

If there has not been a significant drop in either category, then the City’s proposal should continue to be implemented as is. If there has been a significant drop, then the parties should bargain over recalibrating how qualifications and payouts should have worked for that first year of the new PFP process. The parties should then retroactively implement the recalibrated figures 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
FACTFINDING REPORT AND RECOMMENDATIONS FOR SETTLEMENT - 8 to eliminate any significant statistical variations that occurred during the first year, and those changes should carry on into future years.

I sincerely hope that this recommendation assists the parties in reaching a negotiated settlement.

Date: August 4, 2025
Najeeb N. Khoury
Attachment 4
3505.4.

(a) The employee organization may request that the parties’ differences be submitted to a factfinding panel not sooner than 30 days, but not more than 45 days, following the appointment or selection of a mediator pursuant to the parties’ agreement to mediate or a mediation process required by a public agency’s local rules. If the dispute was not submitted to mediation, an employee organization may request that the parties’ differences be submitted to a factfinding panel not later than 30 days following the date that either party provided the other with a written notice of a declaration of impasse. Within five days after receipt of the written request, each party shall select a person to serve as its member of the factfinding panel. The Public Employment Relations Board shall, within five days after the selection of panel members by the parties, select a chairperson of the factfinding panel. (b) Within five days after the board selects a chairperson of the factfinding panel, the parties may mutually agree upon a person to serve as chairperson in lieu of the person selected by the board. (c) The panel shall, within 10 days after its appointment, meet with the parties or their representatives, either jointly or separately, and may make inquiries and investigations, hold hearings, and take any other steps it deems appropriate. For the purpose of the hearings, investigations, and inquiries, the panel shall have the power to issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence. Any state agency, as defined in Section 11000, the California State University, or any political subdivision of the state, including any board of education, shall furnish the panel, upon its request, with all records, papers, and information in their possession relating to any matter under investigation by or in issue before the panel. (d) In arriving at their findings and recommendations, the factfinders shall consider, weigh, and be guided by all the following criteria:
(1) State and federal laws that are applicable to the employer. (2) Local rules, regulations, or ordinances.
(3) Stipulations of the parties.
(4) The interests and welfare of the public and the financial ability of the public agency. (5) Comparison of the wages, hours, and conditions of employment of the employees involved in the factfinding proceeding with the wages, hours, and conditions of employment of other employees performing similar services in comparable public agencies.
(6) The consumer price index for goods and services, commonly known as the cost of living. (7) The overall compensation presently received by the employees, including direct wage compensation, vacations, holidays, and other excused time, insurance and pensions, medical and hospitalization benefits, the continuity and stability of employment, and all other benefits received. (8) Any other facts, not confined to those specified in paragraphs (1) to (7), inclusive, which are normally or traditionally taken into consideration in making the findings and recommendations. (e) The procedural right of an employee organization to request a factfinding panel cannot be expressly or voluntarily waived.
(Amended by Stats. 2012, Ch. 314, Sec. 1. (AB 1606) Effective January 1, 2013.)

3505.5.

(a) If the dispute is not settled within 30 days after the appointment of the factfinding panel, or, upon agreement by both parties within a longer period, the panel shall make findings of fact and recommend terms of settlement, which shall be advisory only. The factfinders shall submit, in writing, any findings of fact and recommended terms of settlement to the parties before they are made available to the public. The public agency shall make these findings and recommendations publicly available within 10 days after their receipt. (b) The costs for the services of the panel chairperson selected by the board, including per diem fees, if any, and actual and necessary travel and subsistence expenses, shall be equally divided between the parties. (c) The costs for the services of the panel chairperson agreed upon by the parties shall be equally divided between the parties, and shall include per diem fees, if any, and actual and necessary travel and subsistence expenses. The per diem fees shall not exceed the per diem fees stated on the chairperson’s résumé on file with the board. The chairperson’s bill showing the amount payable by the parties shall accompany his or her final report to the parties and the board. The chairperson may submit interim bills to the parties in the course of the proceedings, and copies of the interim bills shall also be sent to the board. The parties shall make payment directly to the chairperson. (d) Any other mutually incurred costs shall be borne equally by the public agency and the employee organization.

Any separately incurred costs for the panel member selected by each party shall be borne by that party. (e) A charter city, charter county, or charter city and county with a charter that has a procedure that applies if an impasse has been reached between the public agency and a bargaining unit, and the procedure includes, at a minimum, a process for binding arbitration, is exempt from the requirements of this section and Section 3505.4 with regard to its negotiations with a bargaining unit to which the impasse procedure applies. (Added by Stats. 2011, Ch. 680, Sec. 3. (AB 646) Effective January 1, 2012.) 3505.7.

After any applicable mediation and factfinding procedures have been exhausted, but no earlier than 15 days after the factfinders’ written findings of fact and recommended terms of settlement have been submitted to the parties pursuant to Section 3505.5, a public agency that is not required to proceed to interest arbitration may, after holding a public hearing regarding the impasse, implement its last, best, and final offer, but shall not implement a memorandum of understanding. The unilateral implementation of a public agency’s last, best, and final offer shall not deprive a recognized employee organization of the right each year to meet and confer on matters within the scope of representation, whether or not those matters are included in the unilateral implementation, prior to the adoption by the public agency of its annual budget, or as otherwise required by law. (Amended by Stats. 2022, Ch. 412, Sec. 2. (AB 2556) Effective January 1, 2023.) Attachment 5

Certificate Of Completion
Envelope Id: 41CEBA49-D781-4D2E-8123-158A533C4C47 Status: Sent Subject: Complete with Docusign: Resolution re Impasse with MP and implementation of LBFO - September 30...

Source Envelope:

Document Pages: 2 Signatures: 2 Envelope Originator:

Certificate Pages: 2 Initials: 0 Marco Bernocchi
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
455 N. Rexford Drive
Beverly Hills, CA 90210
[email protected]
IP Address: 198.245.189.181
Record Tracking
Status: Original
9/23/2025 4:02:59 PM
Holder: Marco Bernocchi
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
David Snow for
[email protected]
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 72.219.162.164
Sent: 9/23/2025 4:13:18 PM
Resent: 9/23/2025 4:34:56 PM
Viewed: 9/23/2025 4:37:09 PM
Signed: 9/23/2025 4:38:35 PM
Electronic Record and Signature Disclosure:

Not Offered via Docusign
Shelley Ovrom
[email protected]
Director of Human Resources
Security Level: Email, Account Authentication
(None) Signature Adoption: Pre-selected Style
Using IP Address: 198.245.189.166
Sent: 9/23/2025 4:13:18 PM
Resent: 9/23/2025 4:34:57 PM
Viewed: 9/23/2025 4:42:40 PM
Signed: 9/23/2025 4:43:10 PM
Electronic Record and Signature Disclosure:

Not Offered via Docusign
Anthony Rodstein
[email protected]
Purchasing Services Manager
City of Beverly Hills (Finance Department)
Security Level: Email, Account Authentication
(None)
Sent: 9/23/2025 4:43:11 PM
Electronic Record and Signature Disclosure:

Not Offered via Docusign
Nancy Hunt-Coffey
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via Docusign
Sharona R. Nazarian
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via Docusign
Signer Events Signature Timestamp
Huma Ahmed
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via Docusign
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
Intermediary Delivery Events Status Timestamp
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Kirsten Rowe
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via Docusign
Witness Events Signature Timestamp
Notary Events Signature Timestamp
Envelope Summary Events Status Timestamps
Envelope Sent Hashed/Encrypted 9/23/2025 4:13:18 PM
Payment Events Status Timestamps

Beverly Hills City CouncilSeptember 30, 2025

Beverly Hills City Council
September 30, 2025