AGREEMENT BETWEEN THE CITY OF COLFAX AND
MNJ ADVISORS INC.
This Agreement is made on this 28th, day of June, 2023, between the City of Colfax and MNJ Advisors Inc., (the “Agreement”) is entered into between the CITY OF COLFAX ("City"), a municipal corporation organized in the State of California, and MNJ ADVISORS, INC, a California corporation (“MNJ”). The parties agree as follows:
RECITALS
A. City will commence an open recruitment to permanently fill the vacant position of City Manager in the next 90 days;
B. City is presently in need of an individual with the knowledge, skills and abilities to temporarily hold the position of Interim City Manager during the City's recruitment to permanently fill the position of City Manager;
C. Michael Luken, President/CEO of MNJ Advisors, Inc., is uniquely qualified and has the requisite specialized skills, training and experience to serve as Interim City Manager for the City, including training and experience relating to expediting emergency response and recovery for the City;
D. City desires to employ the specialized services of Michael Luken as Interim City Manager in consideration of and subject to the terms, conditions, and benefits set forth in this Agreement;
E. MNJ Advisors Inc. will perform the duties of Interim City Manager in consideration of and subject to the terms, conditions, and benefits set forth in this Agreement; F. MNJ Advisors, Inc. is a consulting firm, employing a retired CalPERS Employee, Michael Luken, as an employee. MNJ Advisors acknowledges that Michael Luken will be restricted to working no more than a combined 960 hours for City, a state agency, or other CalPERS contracting agencies (collectively "CalPERS Agencies") during City's 2022-2023 fiscal year, or for any additional or subsequent fiscal year. MNJ represents that Michael Luken has not received any unemployment compensation from any CalPERS Agencies during the 12-month period preceding the effective date of this Agreement, that Michael Luken has not received a retirement incentive upon retirement within the meaning of Government Code § 7522.56(g), and that Michael Luken has attained normal retirement age within the meaning of Government Code § 21220.5; G. This Agreement was approved by the City Council as a regular agenda item at a regular meeting held on May 24, 2023.
OPERATIVE PROVISIONS
In consideration of the promises and conditions contained herein, the parties agree as follows:
1. Appointment as Interim City Manager
The City hereby agrees to enter into an agreement with MNJ and appoint its employee Michael Luken as Interim City Manager for the City subject to the terms, conditions, and provisions of this Agreement.
MNJ hereby accepts such contract for services.
2. Status and Term of Agreement
(a) This Agreement commences and is effective on June 28, 2023 ("Commencement Date"). This Agreement shall expire at the earlier of: (i) the employment of a permanent City Manager; (ii) upon Item 9C
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termination of the Agreement by either MNJ or City as provided in Section 4 of this Agreement; or (iii) Michael Luken’s exhaustion of his 960-hour limitation to service pursuant to CalPERS rules and regulations, unless otherwise extended by the Executive Order of the Governor. (b) MNJ acknowledges that it is a contractor of the City which shall serve at the pleasure of the City Council at all times during the period of its service. The terms of the City's personnel rules, policies, procedures, ordinances, resolutions, or Municipal Code (collectively "Personnel Policies") shall not apply to Michael Luken to the extent such Personnel Policies conflict with this Agreement. (c) Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of the City Council to terminate the contract with MNJ at any time for any lawful reason. (d) Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of MNJ to terminate this contract at any time.
3. Duties and Responsibilities
(a) City agrees to utilize Michael Luken through MNJ as an Interim City Manager of the City to perform the functions and duties of that office including, under City Council direction, providing management oversight in directing the activities and operations of the City as set forth in the Municipal Code of the City of Colfax, and to perform other legally permissible duties and functions as City Manager as the City Council shall from time- to-time assign, including, without limitation, assisting the City’s recruitment of a permanent City Manager (the “Services”).
(b) MNJ shall not engage in any activity which is or may become a conflict of interest, prohibited by contract, or which may create an incompatibility of office as defined under California law. Prior to performing any services under this Agreement and annually thereafter, MNJ must complete disclosure forms as required by law.
4. Resignation and Termination
(a) MNJ may terminate this agreement at any time with or without cause and agrees to give City at least thirty (30) days’ advance written notice of the effective date of termination unless the parties mutually agree otherwise.
(b) City may at any time terminate MNJ, with or without cause.
5. Compensation
(a) City agrees to pay MNJ for services rendered pursuant to this Agreement at the rate of $97.50 per hour for three (3) days per week in the office and two (2) days per week remote work/on-call (173 1/3 hours per month). All payments to MNJ shall be paid within 30 days of invoices submitted by MNJ to City. Michael Luken will attend all regular and special City Council meetings and all internal/external meetings required to conduct city business. MNJ will assist City with the recruitment of a permanent city manager.
(b) MNJ will record and report to City all hours worked for City as may be required for purposes of CalPERS compliance.
(c) Pursuant to CalPERS regulations and policy statements, Michael Luken shall not receive from City any benefits City commonly provides to its employees, including without limitation health, dental, or vision insurance coverage, life insurance, employee assistance programs, and similar benefits. (d) City shall reimburse MNJ for milage at the current IRS Standard Mileage Rate (currently $0.655 per mile) for all travel to and from the City and outside meetings and for any reasonable expenses incurred in the course of this contract.
6. Indemnification
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City shall defend and indemnify MNJ against any action, including but not limited to any tort, professional liability claim or demand, or other noncriminal legal, equitable or administrative action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of MNJ and Michael Luken’s duties as an officer of City, other than an action brought by City against MNJ, or an action filed against City by MNJ. City shall be responsible for and have authority to compromise and settle any action, with prior consultation with MNJ, and pay the amount of any settlement or judgment rendered on that action. MNJ shall cooperate fully with City in the settlement, compromise, preparation of the defense, or trial of any such action.
MNJ shall hold harmless and indemnify, including without limitation the cost to defend, the City and its officers, agents and employees from and against any and all claims, demands, damages, costs or liability that arise out of, or pertain to, or relate to the sole negligence, recklessness or willful misconduct of MNJ and/or its agents in the performance of the Services. This indemnity does not apply to liability for damages for death or bodily injury to persons, injury to property, or other loss, arising from the sole negligence, willful misconduct or material defects in design by the City or its agents, servants employees or independent contractors other than MNJ who are directly responsible to the City, or arising from the active negligence of the City officers, agents, employees or volunteers.
7. Insurance
General Liability Coverage- During the term of this Agreement, MNJ shall, at its sole cost and expense, obtain and maintain general liability insurance, including personal injury and property damage insurance for all activities of MNJ and its subcontractors, if such are authorized by the City, arising out of or in connection with the Services. The insurance shall be written on a comprehensive general liability form and include a broad form comprehensive general liability endorsement. In the alternative, the City will accept, in satisfaction of these requirements, commercial general liability coverage which is equivalent to the comprehensive general liability form and a broad form comprehensive general liability endorsement. The insurance shall be in an amount of not less than $1 million combined single limit personal injury and property damage for each occurrence. The insurance shall be occurrence based insurance. General liability coverage written on a claims made basis shall not be acceptable absent prior written authorization from the City.
Automobile Liability Coverage-Automobile liability insurance covering bodily injury and property damage for all activities of MNJ arising out of or in connection with this Agreement, including coverage for owned, hired and non-owned vehicles, in an amount of not less than $1 million combined single limit for each occurrence.
Policy Endorsements-Each general liability and automobile liability insurance policy shall be endorsed with the following provisions:
(a) The City, and its elected or appointed officials, employees and agents shall be named as insureds or additional insureds with regard to damages and defenses of claims arising from activities performed by or on behalf of MNJ.
(b) The insurance afforded by each policy shall apply separately to each insured who is seeking coverage or against whom a claim is made or a suit is brought, except with respect to the insurer’s limits of liability.
(c) The insurance shall be primary insurance as respects the City and its elected or appointed officers, officials, employees and agents. Any other insurance maintained by the City or its elected or appointed officers, officials, employees, agents or volunteers shall be in excess of this insurance and shall not contribute with it.
(d) The insurance shall not be suspended, voided, cancelled, or reduced in coverage or in limits except after thirty (30) days prior written notice has been provided to the City. Any failure to comply with the reporting requirements of any policy shall not affect coverage provided to the City, its elected or appointed officers, officials, employees, or agents.
Professional Liability Coverage- MNJ shall also take out and maintain professional liability, errors and omissions insurance in an amount not less than $1 million. The professional liability insurance policy shall be endorsed with a provision stating that it shall not be suspended, voided, cancelled, or reduced in coverage or in limits except after thirty (30) days written notice has been provided to the City.
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Insurance Certificates and Endorsements-Prior to commencing the Services under this Agreement, MNJ shall submit to the City documentation evidencing the required insurance signed by the insurance agent and the companies named. This documentation shall be on forms which are acceptable to the City and shall include all required endorsements and verify that coverage is actually in effect. This Agreement shall not be effective until the required insurance forms and endorsements are submitted to and approved by the City. Failure to provide these forms within the time period specified by City may result in the award of this Agreement to another contractor should the City, in its sole discretion, decide to do so. Current certification of insurance shall be kept on file with the City at all times during the term of this Agreement.
Deductible and Self-Insured Retentions-Any deductibles or self-insured retentions must be declared to and approved by City.
Termination of Insurance-If the City receives notification that MNJ’s insurance will be suspended, voided, cancelled or reduced in coverage or in limits, and if MNJ does not provide for either the reinstatement of that insurance or for the furnishing of alternate insurance containing all of the terms and provisions specified above prior to the termination of that insurance, City may either terminate this Agreement for that breach, or City may secure the required insurance to satisfy the conditions of this Agreement and deduct the cost thereof from compensation which would otherwise be due and payable to MNJ for Services rendered under the terms of this Agreement.
8. Independent consultant
It is understood and agreed that MNJ, including MNJ’s employees or subcontractors, is an independent consultant and that no relationship of employer-employee exists between the parties hereto for any purpose whatsoever. MNJ shall finance its own operations and shall operate as an independent contractor. Nothing in this Agreement shall be construed to be inconsistent with this relationship or status.
MNJ shall be responsible for the employment status and safety of its employees who may perform work under this Agreement. MNJ shall comply with all laws and regulations, including any prevailing wage and other employment laws and regulations, such as California Labor Code sections 1720, et seq., to the extent they are applicable to the work to be performed under this Agreement.
If in the performance of this Agreement, any third persons are employed by MNJ, such persons shall be entirely and exclusively under the direction, supervision and controls of MNJ. Except as specifically provided elsewhere in this Agreement, all terms of employment, including hours, wages, working conditions, discipline, hiring and discharging, or any employment or requirements of law, shall be determined by MNJ. It is further understood and agreed that MNJ shall issue W-2 or 1099 IRS Forms for income and employment tax purposes, for all of MNJ’s assigned personnel and subcontractors.
MNJ shall complete all services required by this Agreement according to its own methods and shall not be subject to the City’s control as to end product, final result or manner and means by which such services are provided.
9. Taxes
MNJ shall pay, when and as due, any and all taxes incurred as a result of MNJ’s compensation hereunder, including estimated taxes. MNJ hereby agrees to indemnify the City for any claims, losses, costs, fees, liabilities, damages or injuries suffered by the City arising out of MNJ’s breach of this section.
10. Accounting Records
During the performance of this Agreement and for a period of twelve (12) months after completing all services hereunder, services or a specific task order, MNJ shall maintain all accounting and financial records related to this Agreement, including, but not limited to, records of MNJ’s costs for all services performed under this Agreement and records of the MNJ’s expenses, in accordance with generally accepted accounting practices. MNJ shall keep such records available for inspection and audit by representatives of the City upon reasonable written notice.
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11. Alternative Dispute Resolution
Before resorting to mediation, arbitration or other legal process, the primary contacts of the parties shall meet and confer and attempt to amicably resolve any dispute arising from or relating to this Agreement subject to the following provisions. Any party desiring to meet and confer shall so advise the other party pursuant to a written notice. Within 15 days after provision of that written notice by the party desiring to meet and confer, the primary contacts for each party shall meet in person and attempt to amicably resolve their dispute. Each primary contact, or the person acting in their absence with full authority to resolve the dispute, shall attend the meeting and shall be prepared to devote an entire day thereto. If any dispute remains unresolved at the end of the meeting, any party to this Agreement shall have the right to invoke the mediation process provided for below.
Any dispute that remains unresolved after the meet and confer shall immediately be submitted to nonbinding neutral mediation, before a mutually acceptable, neutral retired judge or justice at the Sacramento Office of the Judicial Arbitration and Mediation Service (“JAMS”). If within five days after the meet and confer the parties are unable to agree upon the selection of a neutral mediator, then the first available retired judge or justice at the Sacramento office of JAMS shall serve as the neutral mediator. The parties agree to commit to at least one full day to the mediation process. Additionally, to expedite the resolution of any dispute that is not resolved by mediation, the parties agree to each bring to the neutral mediation a list of at least five neutral arbitrators, including their resumes, whose availability for an arbitration hearing within 30 days after the mediation has been confirmed.
If mediation is unsuccessful, before the mediation concludes, the parties shall mediate the selection of a neutral arbitrator to assist in the resolution of their dispute. If the parties are unable to agree on an arbitrator, the parties agree to submit selection of an arbitrator to the mediator, whose decision shall be binding on the parties. In that case, the mediator shall select a neutral arbitrator from the then active list of retired judges or justices at the Sacramento Office of the JAMS. The arbitration shall be conducted pursuant to the provisions of the California Arbitration Act, sections 1280-1294.2 of the California Code of Civil Procedure. In such case, the provisions of Code of Civil Procedure Section 1283.05 and 1283.1 shall apply and are hereby incorporated into this Agreement.
This section shall survive the termination or expiration of this Agreement. If there is no Sacramento office of JAMS, then the office of JAMS closest to the City shall be used instead of a Sacramento office.
12. No Contract Term or Damage
Nothing in this Agreement shall be construed to create a contract of employment, either express or impliedin-fact, for any fixed term or requiring cause for termination. MNJ and Michael Luken hereby expressly waives the right to bring claims or causes of action seeking contract-based damages relating to this agreement with the City. MNJ acknowledges that either party may terminate the agreement at any time for any reason, with or without cause, pursuant to paragraph 4.
13. Notices
Unless otherwise provided herein, any notices required by this Agreement shall be in writing and either given in person or by first class mail with the postage prepaid and addressed as follows:
TO CITY: TO MNJ Advisors Inc.
Trinity Burruss, Mayor Mike Luken, President/CEO
City of Colfax MNJ Advisors Inc.
P.O Box 702 6160 Rose Garden Lane
Colfax, CA 95713 Roseville, CA 95747
14. Entire Agreement
This Agreement is the final expression of the complete agreement of the parties with respect to the matters Item 9C
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specified herein and supersedes all prior oral and written understandings and agreements, and, except as prescribed herein, this Agreement cannot be modified except by written mutual agreement signed by the parties.
15. No Assignment, No Third-Party Beneficiaries
This Agreement is not assignable by either City or MNJ. Nothing in this Agreement shall be construed to create, and the parties do not intend to create any beneficial rights in third parties.
16. Severability, Applicable, Law, and Interpretation
In the event any provision of this Agreement is finally held or determined to be illegal or void by a competent court with jurisdiction, the remainder of this Agreement shall remain in full force and effect unless the provision(s) found to be void are wholly inseparable from the remaining portions of this Agreement. Any dispute concerning this Agreement shall be governed and construed under the laws of the State of California in effect at the time of signing of this Agreement. The parties consent to the jurisdiction of the California courts with venue in Placer County.
17. Compliance with Federal, State and Local Law
MNJ shall comply with all applicable federal, state and local laws, statutes, ordinances, rules and regulations affecting the Services, including without limitation laws requiring licensing and prohibiting discrimination in employment because of race, creed, color, sex, age, marital status, physical or mental disability, national origin or other prohibited bases. City shall not be responsible or liable for MNJ’s failure to comply with applicable laws, statutes, ordinances, rules or regulations.
18. Construction
To the fullest extent allowed by law, the provisions of this Agreement shall be construed and given effect in a manner that avoids any violation of statute, ordinance, regulations or law. This Agreement has been negotiated between the City of Colfax’s City Council and MNJ. City and MNJ acknowledge they have each contributed to the making of this Agreement and that in the event of a dispute over the interpretation of this Agreement, the language of the Agreement will not be construed against one party in favor of the other.
City and MNJ acknowledge they have each had an adequate opportunity to consult with their own legal counsel in the negotiation and preparation of this Agreement.
19. Successors
This Agreement shall be binding on and inure to the benefit of the respective parties hereto except to the extent of any contrary provision in this Agreement.
20. Attorney’s Fees
If any party to this Agreement commences legal proceedings to enforce any of its terms or to recover damages for its breach, the prevailing party shall be entitled to recover its reasonable attorney’s fees, costs and the expenses of expert witnesses, including any such fees costs and expenses incurred on appeal.
21. Time of the Essence
Time is of the essence in the performance of the Services. MNJ will perform its Services with due and reasonable diligence consistent with sound professional practices and shall devote such time to the performance of the Services as may be necessary for their timely completion.
22. Counterparts
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This Agreement may be executed simultaneously in two counterparts, which shall be identified by number and each of which shall be deemed an original, but all of which together shall constitute one document.
IN WITNESS WHEREOF, the parties hereby have executed this Agreement on the day first above written:
Dated:
Michael W. Luken, President/CEO
MNJ Advisors, Inc.
Dated: City of Colfax
By:
Trinity Burruss, Mayor
Approved as to form:
City Attorney
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