4916-2230-3404 v1 1
4 7
1 7
AMENDED AND RESTATED AT-WILL EMPLOYMENT AGREEMENT
OF
Stefan Chatwin
This agreement (“Agreement”) is between the CITY OF FOSTER CITY, a municipal corporation, and the ESTERO MUNICIPAL IMPROVEMENT DISTRICT, a district, organized under the laws of the State of California (collectively “City/District”), and STEFAN CHATWIN ("Employee"). City/District and Employee shall be collectively referred to as “Parties” or individually referred to as “Party”, “Employee” or “City/District”.
RECITALS
WHEREAS, the City/District and Employee entered into an Employment Agreement on June 21, 2022 that was amended on June 20, 2023, September 16, 2024, and August 4, 2025; and
WHEREAS, the parties have agreed to further amendments and desire to enter into this Agreement to memorialize their intent and the terms of employment by this Agreement.
NOW THEREFORE, it is hereby agreed by City/District and Employee as follows:
1. Effective Date
The effective date of this Agreement is June 2, 2026.
2. Appointment as City/District Manager and Start Date
The City/District agrees to continue to employ Employee as City/District Manager for the City/District, subject to the terms, conditions and provisions of this Agreement. Employee accepts such terms of employment. Employee shall be “at will” and serve at the pleasure of the City Council/District Board. Employee started performance of his duties as City/District Manager on June 21, 2022.
3. Term of Agreement
The term of this Agreement shall (“Term”) be for a period of five (5) years, commencing on June 2, 2026 to June 2, 2031, unless terminated earlier by either Party pursuant to Section 6 below. Employee is an at will employee who may be terminated at any time, with or without cause, and shall serve at the pleasure of the City/District Council. Employee may resign at any time for any reason by providing notice in accordance with Section 6 to City/District Council. If either Party intends not to renew or extend the Term at its expiration, the Party shall give notice to the other Party at least 180 days prior to the expiration of the Term. At the end of the Term, and no notice is provided by either Party pursuant to the preceding sentence, the Agreement shall renew automatically for one year increments unless the City/District provides notice to Employee of the City’s/District’s intent not to renew or extend the Agreement at its expiration at least 180 days prior to the expiration of the one year term. 4916-2230-3404 v1 2
4 7
1 7
4. Duties and Responsibilities
a. Employee will perform the functions and duties specified in the laws of the United States and the State of California and in Foster City Municipal Code, Title 2, Chapter 2.04, and Estero Municipal District Code, Title 2, Chapter 2.12, ordinances and resolutions of City/District, and to perform other legally permissible and proper duties and functions of the City/District Council may, from time to time, assign.
b. Employee shall perform his duties to the best of his ability in accordance with the highest professional and ethical standards of the profession, comply with all general rules and regulations established by the City/District, and obey all State and Federal laws. c. Employee agrees to devote his productive time, ability and attention to the City/District's business during the term of this Agreement. Employee shall not hold secondary employment, and shall be employed exclusively by the City/District. The City/District and Employee recognize that Employee is expected to devote necessary time outside normal office hours to perform business of the City/District. Since Employee's position is "exempt" under the Fair Labor Standards Act, Employee shall not receive overtime or extra compensation for work performed outside normal business hours.
d. Employee 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, the Employee must complete disclosure forms as required by law.
5. Work Hours
The Employee is an exempt employee expected to work the hours necessary to fulfill the obligations of the Employee position. The City Council/District Board and Employee share the belief that his presence at City Hall during normal business hours is important to demonstrate leadership and to promote employee morale and growth. With these goals in mind, as the head of the City/District organization, the Employee is expected to be available at all times and is generally expected to be present in the workplace during normal business hours on most days.
In recognition of the position’s demands, the City Council/District Board wishes to provide the Employee flexibility to determine his work schedule in fulfilling his work obligations. The Employee may therefore set his own regular work schedule provided that it averages at least 8 hours per regular work day (including leave taken) over a two week period.
6. Resignation, Termination and Severance Pay
a. Resignation: Employee may resign or retire at any time from his employment with the City/District, and agrees to provide the City/District at least sixty (60) calendar days advance written notice of the effective date of his resignation or retirement. Failure of Employee to give the required written notice of resignation will result in a pro-rata reduction in benefits normally payable to resigning City/District employees, such as, but not limited to, accrued vacation payment, and the like. Voluntary resignation by Employee will result in a loss of all Severance Pay from City/District.
b. Termination by City/District: City/District may terminate Employee, with or without cause, at any time.
4916-2230-3404 v1 3
4 7
1 7
i. Termination without Cause: City/District may terminate Employee without cause by providing him with a written notice of termination. If City/District terminates employee without cause, City/District shall provide Employee sixty (60) calendar days written notice of such termination, unless the parties mutually agree otherwise. If the City/District, at the request of a majority of the City Council/District Board, requests Employee’s resignation without cause, then Employee shall be deemed terminated without cause. If the Employee is terminated without cause, then the Employee is entitled to receive severance as detailed in Section Eleven (11) below. However, consideration of termination without cause of Employee by the City Council/District Board shall not occur within ninety (90) calendar days before or following a general or special election at which a Councilmember is elected.
ii. Termination for Cause: City/District may terminate Employee for cause by providing him with a written notice of termination. Such termination may be effective immediately. The following are sufficient basis for termination for cause:
A. Employee engages in illegal activities;
B. Gross malfeasance;
C. Dereliction of duties;
D. Absence from employment without a good cause;
E. Failure to perform duties and responsibilities under this Agreement, as defined in the City/District’s Code, or as specified in the City/District Manager’s job description.
F. Resume fraud or other acts of material dishonesty;
G. Violation of the City/District’s Rules, including but not limited to, the City/District’s rule against harassment, discrimination, and retaliation; H. Use or possession of illegal drugs;
I. Engaging conduct tending to bring embarrassment or disrepute to the City/District;
J. Conviction of any felony or any criminal offense involving moral turpitude; or
K. An abuse of his office or position as that term is defined in Government Code Section 53243.4.
c. Termination by Reduction of Salary or Benefits: If City/District at any time during this Agreement reduces the salary of City/District Manager in a greater percentage than an applicable across-the-board reduction for other “at will” employees, as defined in the City/District’s Compensation and Benefits Plan for Management Employees (“Plan”), the Employee may, at his option, be deemed to be “terminated” without cause at the date of such reduction.
d. Affirmation of “At-Will” status: The parties recognize and affirm that: 1) Employee is an "at-will" employee whose employment may be terminated by the City Council/District Board at any time; and 2) there is no express or implied promise made to Employee for any form of continued employment as City/District Manager or any other position of employment with City/District. This Agreement is the sole and exclusive basis for an employment relationship between Employee and the City/District. Nothing in this Agreement shall be construed to create a property interest for Employee in the position of City/District Manager. 4916-2230-3404 v1 4
4 7
1 7
7. Salary
Effective July 1, 2026, City/District agrees to pay Employee $365,448 in base salary per year ($30,454 per month) for the first year of the Agreement. Effective July 1, 2027, City/District agrees to pay Employee $383,724 in base salary per year ($31,977 per month) during the remaining term of this Agreement for his services. All salary payments to Employee shall be payable in installments at the same time as other employees of the City/District are paid and subject to the customary withholding. Increases in salary will be determined by the City Council/District Board as part of Employee’s performance evaluations, and in no case shall Employee’s annual salary increase exceed that of other across the board increases for Management Employees.
8. Vacation, Sick Leave, and Other Employment Benefits
Unless provided otherwise in this Agreement, Employee shall receive all benefits provided to Department Heads pursuant to the approved Compensation and Benefits Plan for the City of Foster City and Estero Municipal Improvement District Management employees. In addition, on the Effective Date of this Agreement:
a. Employee may participate in a voluntary 401(a) plan and/or 457 plan. Should Employee elect to contribute a minimum 1% of base salary to his 401(a) plan and/or 457 plan, the City/District agrees to make a contribution equaling 10% of Employee’s annual base salary into Employee’s account. The maximum voluntary contribution to Employee’s account shall be that amount established by law. Such contributions will not be deemed to increase Employee’s base salary for any purpose. b. City/District shall provide an auto allowance of $600/month to compensate Employee for the use of his personal vehicle on official City/District business, including all business travel within 100 miles of City Hall. The car allowance shall be subject to withholdings, to the extent required by law. Employee shall maintain a current and valid California Driver’s License, insurance coverage, registration and any other legal requirements to operate a personal motor vehicle in the State of California. c. City/District will provide Employee with a computer and smartphone to be used in the manner and subject to the procedures generally applicable to other executive employees, including applicable computer use policies.
9. Dues, Subscriptions, and Professional Development
a. The City/District agrees that on a yearly basis during its budget process to consider whether to pay for professional dues and subscriptions of Employee for national, regional, state, and local associations and organizations. b. The City/District agrees that on a yearly basis during its budget process to consider whether to pay for travel and subsistence expenses of Employee for professional and official travel, meeting, and other occasions to continue the professional development of Employee, and to pursue necessary official functions for the City/District, including, but not limited to the ICMA Annual Conference and such other national, regional, state and local governmental groups and committees (including community and civic organizations) thereof which Employee serves as a member, and for travel and subsistence expenses of Employee for short courses, institutes, and seminars that are necessary for his professional development and for the good of the City/District.
Employee understands and agrees these professional development expenses are 4916-2230-3404 v1 5
4 7
1 7
subject to budget constraints and that the City Council/District Board retains discretion in determining whether to fund any of the above-referenced expenses.
10. Housing Benefits
a. Housing Allowance: Upon providing proof of residency, City/District will pay to Employee $3,600 per month for housing assistance for a residential unit located within the City (“Housing Allowance”). This Housing Allowance is applicable to either a purchased or rental primary residence within the City. If Employee elects to obtain the Housing Allowance, the Employee shall not be entitled to obtain a City Loan, as outlined below. The Housing Allowance shall automatically increase by the San Francisco-Oakland-Hayward, CA, Housing Consumer Price Index on July 1st of each year during the remaining term of this Agreement for his services. b. Housing Loan: Should Employee purchase his primary residence within the City of Foster City during the term of this Agreement, the City/District agrees to make available to Employee a housing loan of up to Two Million Five Hundred Thousand Dollars ($2,500,000) (“City Loan”) providing that the City Loan shall not exceed ninety percent (90%) of the property purchase price. If Employee elects to obtain the City Loan, the Employee shall not be entitled to any Housing Allowance outlined above.
The City Loan shall be limited to purchase of the property within the City limits and shall be Employee’s primary residence. The City Loan shall be evidenced by a Promissory Note made by Employee payable to the City/District and secured by a First Deed of Trust on the property. Any such loan will be in a form as approved by the City Council/District Board, and will include the following terms:
(i) Thirty (30) year term, with an interest rate not to exceed the five (5) year average rate of return on the state’s Local Agency Investment Fund (“LAIF”), locked at the time of any such loan.
(ii) The Employee shall be required to pay all principal and interest for the loan amount which shall be amortized and payable in equal biweekly installments through an automatic payroll deduction.
(iii) The Employee shall be responsible to pay all costs associated with any such residence, including, but not limited to all applicable taxes, insurance and homeowners fees and be responsible at his expense to maintain the property in good and habitable conditions at all times. (iv) The loan may be prepaid earlier without penalty.
(v) The Promissory Note shall be due and payable in full within eighteen (18) months of Employee’s termination if Employee’s termination is pursuant to section 6(b)(i) above. If separation is for any other reason than section 6(b)(i), the Employee shall have nine (9) months to repay the Promissory Note. If the City/District determines in its reasonable discretion that the property is no longer Employee’s primary residence, Employee shall have sixty (60) days to repay the Promissory Note.
4916-2230-3404 v1 6
4 7
1 7
11. Severance
a. Employee shall serve at the will and pleasure of the City Council/District Board, and his employment may be terminated by the City Council/District Board at any time in accordance with Section 6. Termination of Employee’s employment shall not require any showing of cause or justification, nor shall Employee be entitled to any internal administrative appeal of the decision of the City Council/District Board, beyond any process required by law.
b. In the event of Employee's involuntary termination for reasons other than his resignation, death, disability, or termination with cause as provided in section 6(b)(ii) above, Employee shall be paid severance pay as provided in section 11(e) below.
Employee shall not receive severance if, at the end of the five year Term, the Council determines not to renew this Agreement.
c. In accordance with state law, Employee shall be entitled to receive all compensation earned, but unpaid, for actual work performed and accrued unused vacation time as of the date of termination.
d. If Employee is paid severance pay as provided in section 11(e), below, payment of such severance shall be conditioned upon Employee's signature on written waiver, attached hereto as Exhibit A, of any claims, grievances or causes of action against City/District, its employees, agents, officers, and City/District Council arising out of or concerning this Agreement, Employee’s employment with City/District, or the termination of his employment with the City/District. If Employee does not agree to waive such claims, grievances or causes of action, the City/District shall not pay Employee severance pay.
e. If Employee’s employment is terminated, and severance pay is applicable pursuant to the terms stated above, City/District agrees to pay Employee a cash payment equal to twelve (12) months of base salary, health benefits, and any remaining lease payments owed as part of any qualified housing under the Housing Allowance, minus any required withholding. Such payment shall release City/District from any further obligations under this Agreement. Further, should the City/District pay any remaining lease payments for any qualified housing, the Employee will work in good faith with the City/District to transfer any remaining lease term to the City/District.
12. Annual Performance Evaluation
a. City/District and Employee acknowledge that periodic performance evaluations are an important means by which City/District and Employee may ensure effective communications regarding expectations and performance. Toward this end, the City Council/District Board will review and discuss Employee’s performance 6 months after the Effective Date of this Agreement, 12 months after the Effective Date of this Agreement, and annually thereafter. Employee acknowledges and accepts the fact that the City Council/District Board has the right to schedule an evaluation session more frequently than once a year.
b. Employee will request and schedule the annual performance evaluation as appropriate under City Council/District Board agenda procedures or as otherwise directed by the City Council/District Board.
4916-2230-3404 v1 7
4 7
1 7
13. Indemnification
The City/District shall defend, hold harmless and indemnify Employee against any tort, civil rights, personnel, discrimination, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of Employee's duties in accordance with the provisions of California Government Code section 825. The City/District shall provide a defense in accordance with California Government Code section 995. The City/District may decline to defend and/or indemnify Employee only as permitted by the California Government Code. The City/District may compromise and settle any such claim or suit and pay the amount of any settlement or judgment therefrom.
14. Bonding
City/District shall bear the full cost of any fidelity or other bonds the City/District Council requires of Employee under any law or ordinance or otherwise.
15. Notices
Notices to Employee must be served (1) to Employee personally, (2) by delivery to the Office of the City/District Manager during regular business hours, or (3) by deposit in the custody of the United States Postal Service, postage prepaid, to Employee’s home address on file with the City/District. Notice is deemed given as of the date of personal service, delivery or deposit, respectively.
Notices to the City/District must be delivered to the City Attorney/District Legal Counsel personally or to the City Attorney/District Legal Counsel’s Office during normal business hours.
16. Abuse of Office
California Government Code Sections 53243, 52431.1, 53243.2 and 52431.3 are incorporated by reference as if fully set forth herein.
If this Agreement is terminated, any cash settlement related to the termination that Employee may receive from City/District shall be fully reimbursed to the City/District if Employee is convicted of a crime involving an abuse of his or his office or position.
17. Entire Agreement
This Agreement contains all of the terms agreed upon by the City/District and Employee with respect to the subject matter of this Agreement and supersedes all prior agreements, arrangements and communications between the Parties concerning such subject matter, whether oral or written, including but not limited to information published in the job announcement and other recruiting documents pertaining to compensation and benefits of the City/District manager position.
18. Confidentiality
4916-2230-3404 v1 8
4 7
1 7
During the course of employment or at any other time, Employee agrees not to disclose, communicate, use to the detriment of the City/District or for the benefit of any other person (including Employee) or misuse in any way any confidential information or data concerning City/District. Employee acknowledges and agrees that all such confidential information received by Employee will be received in confidence and as a fiduciary of the City/District.
19. Informed Agreement
This Agreement has been negotiated between the City/District Council, on behalf of City/District, and Stefan Chatwin as Employee. City/District and Employee acknowledge that 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/District and Employee acknowledge that they have each had an adequate opportunity to consult with their own legal counsel in the negotiation and preparation of this Agreement.
20. AB 1344
Assembly Bill 1344, which was subsequently enacted as Government Code Sections 53243 - 53244, sought to provide greater transparency in local government and institute certain limitations on compensation paid to local government executives.
These statutes, generally require that certain contracts between local agencies and its employees include provisions requiring an employee who is convicted of a crime involving an abuse of his office or position to provide reimbursement to the local agency for the certain forms of payment, including but not limited to the following: (i) criminal defense costs; (ii) cash settlement payments; and (iii) any non-contractual settlement payments. Accordingly, the Parties agree that it is their mutual intent to fully comply with these Government Code sections and all other applicable law as it exists as of the date of execution of this Agreement and as such laws may be amended from time to time thereafter. Specifically, the following Government Code sections are called out and hereby incorporated by this Agreement:
§ 53243.1. Reimbursement of legal criminal defense upon conviction of crime involving office or position.
§ 53243.2. Reimbursement of cash settlement upon conviction of crime involving office or position.
§ 53243.3. Reimbursement of non-contractual payments upon conviction or crime involving office or position.
§ 53243.4. “Abuse of office or position” defined.
21. Effect of Conviction on Termination.
If Employee is convicted of a crime involving an abuse of his office or position, as defined in Government Code section 53243.4, the following restrictions will apply: (i) 4916-2230-3404 v1 9
4 7
1 7
any paid leave given to Employee pending an investigation shall be fully reimbursed to City/District, (ii) any funds expended by City/District for the legal criminal defense of Employee shall be fully reimbursed to City/District, (iii) any cash settlement paid to Employee shall be fully reimbursed. Upon conviction of a covered felony under Government Code sections 7522.72 or 7522.74, Employee may forfeit the benefits in accordance with those sections.
22. General Provisions
A. Construction. “Herein” and other similar compounds of the word “here” mean this entire instrument and not any particular provision. Section headings and numbers have been inserted for convenience of reference only and shall be given no legal effect. In the event of any conflict between any headings or numbers and the text of this Agreement, the text shall control.
B. Counterparts. This Agreement may be executed in one or more counterparts, each of which is considered an original, and all of which taken together are considered one and the same instrument. This Agreement may be signed electronically in accordance with the City’s/District’s policy regarding electronic signatures.
C. Waiver. Waiver by either party of any term or condition of this Agreement or any breach is not a waiver of any other term or condition or breach of the Agreement.
D. Execution and Applicable Law. This Agreement has been executed in California, and is to be governed in accordance with the laws of the State of California in every respect. The Parties agree that venue for any action arising out of this Agreement shall be in San Mateo County.
E. Amendment. This Agreement may not be amended or modified except by a written instrument executed by the parties.
F. Entire Agreement. This Agreement contains all of the terms agreed upon by the City/District and Employee with respect to the subject matter of this Agreement and supersedes all prior agreements, arrangements and communications between the parties concerning such subject matter, whether oral or written, including but not limited to information published in the job announcement and other recruiting documents pertaining to compensation and benefits of the city manager position.
G. Mediation. Neither Employee nor City/District shall be permitted to file legal action without first meeting in mediation and making a good faith attempt to reach a mediated resolution which mediation shall be conducted within 30 days of the request to initiate mediation by either party to this Agreement. The Parties may, by mutual consent, agree to a longer period of time for mediation. The costs of the mediator, if any, shall be paid equally by the Parties. If a mediated settlement is reached neither party shall be deemed the prevailing party for purposes of the settlement and each party shall bear its own legal costs.
H. Successors. This agreement is binding upon and inure to the benefit of the heirs at law and executors of Employee.
I. Severance of Provisions. If any provision, or any portion thereof, contained in this Agreement is held unconstitutional, invalid or unenforceable, the remainder of this Agreement, or portion thereof, is considered severable, not affected, and remains in full force and effect.
IN WITNESS WHEREOF, the City/District has caused this Agreement to be signed and executed in its behalf by its Mayor/President and duly attested by the City/District Clerk. It has also been executed by the Employee.
4916-2230-3404 v1 10
4 7
1 7
EMPLOYEE CITY/DISTRICT
____________________________ _________________________________ Stefan Chatwin Art Kiesel, Mayor/President
ATTEST:
___________________________________
Priscilla Schaus, City Clerk/District Secretary
APPROVED AS TO FORM:
___________________________________________
Benjamin L. Stock, City Attorney/District Legal Counsel