Agenda packet, second session — National City City Council, March 15, 2022 (part 3 of 3)

Staff Report – Fiscal Year 2022 Mid-Year Budget Review
March 15, 2022
Table A
General Fund Revenues Fiscal Year 2022
Revenue Category
Adopted
Budget
Adjusted
Budget
Projected
Actuals Variance
Sales & Use Tax $20,397,106 20,397,106 $23,400,205 $3,003,099 District Transactions & Use Tax 12,654,000 12,654,000 14,722,000 2,068,000 Property Tax 2,372,998 2,372,998 2,384,920 11,922
Property Tax in Lieu of VLF 7,741,006 7,741,006 7,822,689 81,683 Other Revenues 13,588,107 14,439,931 17,172,565 2,732,634 Transfers In 5,500 5,500 5,500 -
Total $56,758,717 $57,610,541 $65,507,879 7,897,338
Note: The Adjusted Budget equals the Adopted Budget plus any year to date amendments to the budget, as well as adjustments to match appropriations carried over for revenue offset capital projects.

T
he General Fund’s primary sources of revenue are the sales & use tax, the district transactions & use tax, property tax in lieu of vehicle license fees, and property taxes. Projections are based on a combination of year-to-date and historical data, input from the City’s sales tax consultant, and information obtained from the State of California and County of San Diego:
 Sales & Use Tax and District Transactions & Use Tax: The adopted budget for these two major funding sources anticipated a continued recovery from the impacts of the COVID- 19 pandemic. Retail sales have turned out to be stronger than anticipated, however, resulting in Sales & Use Tax revenues trending well above actual amounts for the same period as last fiscal year. Based on projections provided in by the City’s sales tax consultant, these revenues are expected to exceed the Fiscal Year 2021-22 budget by $3.0 million. The District Transactions & Use Tax is currently expected to finish the year at $2.1 million above the budgeted level. Staff is working on a continuing basis with the City’s sales tax consultant to ensure that we have the latest information for each of these funding sources as we continue to recover from the economic uncertainties created by the pandemic.
 Property Tax revenue is expected to be above budget by approximately $12,000.

Assessed values that apply to the General Fund are in line with the assumptions in the adopted budget.
 Property Tax in Lieu of Vehicle License Fees (VLF) is based on a formula that applies the City-wide increase in assessed property values to the prior year’s allocation. The exact increase in assessed values was not known at the time the budget was prepared, but the actual amount will be $82,000 greater than budgeted.

R
evenues in the “Other Revenues” category are expected to end the year above budget by $2.7 million, which is attributable to a combination of projected positive and negative variances in the various individual accounts. Contributing significantly to the positive variance are the 2 395 of 452

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Staff Report – Fiscal Year 2022 Mid-Year Budget Review
March 15, 2022

unbudgeted $2.0 million received from the State for capital improvements at Las Palmas Pool, and an increase of $368,000 in Successor Agency residual balance distributions over the anticipated amount.

Expenditures

Expenditure totals at year-end are currently projected to be below budget by $0.5 million. The variances by expenditure category are shown in Table B below.

Table B
General Fund Expenditures Fiscal Year 2022

Expenditure Category
Adopted
Budget
Adjusted
Budget
Projected
Actuals Variance
Personnel $41,045,469 $42,284,372 $42,233,893 $50,479
Maintenance & Operations 6,863,263 7,733,259 7,278,436 454,823 Capital Outlay 175,430 193,450 193,450 -
Capital Improvement Program 2,750,000 5,745,493 5,745,493 - Internal Service Charges and Reserves 7,726,142 7,726,142 7,726,142 - Transfers Out 1,993,910 1,993,910 1,993,910 -
Total $60,554,214 $65,676,627 $65,171,324 $505,303

Note: The Adjusted Budget equals the Adopted Budget plus any year to date amendments to the budget, as well as appropriations carried over from the prior year for contracts and capital project s.

Personnel costs make up about 70% of the General Fund’s adopted budget. At fiscal-year-end they are projected to be less than budgeted by approximately $50,000. While vacant authorized positions are contributing to anticipated savings of $1.2 million in a combination of full-time salaries, retirement plan charges, and health insurance premiums, this is offset by costs for overtime requirements, primarily in the Police and Fire departments, which are expected to exceed budgeted amounts by $1.2 million. An anticipated reimbursement for Strike Team deployment will offset approximately $0.8 million of these overtime costs.

Maintenance & Operations expenditures are projected to be $0.5 million below budget overall, due to a combination of anticipated savings in various accounts partially offset by unanticipated expenses in others.

All appropriations for Capital Outlay and Capital Improvements are being projected as being entirely spent, because none of the current projects are expected to yield any savings from the amounts budgeted. It is likely, however, that some portion of the current year’s appropriations will be unspent at year-end and will be carried over to next fiscal year.

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Staff Report – Fiscal Year 2022 Mid-Year Budget Review
March 15, 2022

For Internal Service Charges and Transfers Out, all amounts budgeted are projected to be spent, although at year-end actual expenditures of the service provider funds will be reviewed for savings and charges will be adjusted accordingly. Similarly, the Parks Maintenance and Library funds, the primary recipients of Transfers Out from the General Fund, will be reviewed at year- end to determine whether a portion of the transfer amounts can be reduced.

Staff will continue to monitor all revenues and expenditures and will provide updates in the third quarter budget status report and in conjunction with the Fiscal Year 2022-23 budget development process.

Net Impact on Unassigned Fund Balance

Table C below combines the revenue and expenditure projections discussed above. As noted in the summary at the beginning of this report, the adopted budget anticipated the use of $3.8 million of unassigned fund balance. As shown in the table below, unassigned fund balance is now projected to increase by $0.3 million due to revenues outpacing expenditures.

Table C
General Fund Impact on Fund Balance Fiscal Year 2022

Note: The use of Assigned Fund Balance is the sum of non-revenue offset appropriations that were carried over from unspent amounts from the prior fiscal year. Appropriations are carried over for contracts for work that was in progress in the prior year as well as for unspent appropriations for capital projects. The use of Un assigned Fund Balance is the focus of this report.

BUDGET ADJUSTMENTS

During the mid-year budget review process, the Finance Department, in conjunction with City department staff, identified budget adjustments necessary due to expenses unanticipated during

FY 21-22
Adopted
FY 21-22
Adjusted
FY21-22
Projected Variance
Total Revenues $56,758,717 $57,610,541 $65,507,879 $7,897,338 Total Expenditures $60,554,214 $65,676,627 $65,171,324 ($505,303) Use of Fund Balance ($ 3,795,497) ($ 8,066,086) $336,555 $8,402,641 Components of Use of Fund Balance
Assigned -
Unassigned $3,795,497 $8,066,086 ($336,555) ($8,402,641) Total $ 3,795,497 $8,066,086 ($336,555) ($8,402,641)

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Staff Report – Fiscal Year 2022 Mid-Year Budget Review
March 15, 2022

the annual budgeting process. The attached schedule (“Exhibit ‘A’”) details the recommended adjustments. The recommendation section below provides a summary of those adjustments by fund.

RECOMMENDATIONS

1. Authorize the City Manager to approve budget adjustments up to the following amounts:

 Parks Fund
Expenditures
□ $15,000

• Gas Tax Fund
Expenditures
□ $256,000

• Facilities Maintenance Fund
Expenditures
□ $250,000

• Motor Vehicle Services Fund
Expenditures
□ $265,000

• Vehicle Replacement Fund
Expenditures
□ $890,829
Revenues
□ $885,829

 Liability Insurance Fund
Expenditures
□ $491,863
Revenues
□ $491,863

• Housing Authority Fund
Expenditures
□ $50,000
Revenues
□ $50,000

 Low/Mod Income Housing Fund
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Staff Report – Fiscal Year 2022 Mid-Year Budget Review
March 15, 2022

Expenditures
□ $125,000

• Library Grants Fund
Expenditures
□ $4,349
Revenues
□ $4,349

2. Accept and file this staff report.

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Exhibit “A” - Recommended Mid-Year Budget Adjustments, Fiscal Year 2022 Department Fund Expenditure Revenue Net Explanation
Engineering Parks Fund 15,000$ -$ 15,000$ Water Rate Increases, Additional Properties (Paradise Creek Park and Roosevelt Corridor from 1st St. - 8th St. Sidewalk Landscape, Plants and Trees)
Gas Tax Fund 56,000$ -$ 56,000$ Additional unbudget overtime for Streets unit.

Gas Tax Fund 200,000$ -$ 200,000$ Knockdowns - Street Lights and Traffic Street Poles Facilities Maint Fund 250,000$ -$ 250,000$ Elevator Repairs, Fire Training Facility Pump; Fire Station Door Lock Installation
Motor Vehicle Services Fund 50,000$ -$ 50,000$ Fire Vehicle Accident Repairs/South Coast Emergency Vehicle Services Motor Vehicle Services Fund 200,000$ -$ 200,000$ Fuel Rate Increase Motor Vehicle Services Fund 10,000$ -$ 10,000$ Vehicle Parts 3% to 50% Increase Motor Vehicle Services Fund 5,000$ -$ 5,000$ Update Tire Tool and Vehicle Code Reader (Scanner) Vehicle Replacement Fund 5,000$ -$ 5,000$ Parks Trencher Trailer Cost increased - approved in a previous fiscal year Fire Vehicle Replacement Fund 885,829$ 885,829$ -$ Triple Combination Apparatus Fire Truck City Attorney Liability Insurance Fund 491,863$ 491,863$ -$ Unanticipated Liability Claim Costs Housing Housing Authority Fund 25,000$ 25,000$ -$ 2525 Highland Avenue affordable housing project Housing Authority Fund 25,000$ 25,000$ -$ 2525 Highland Avenue affordable housing project Low/Mod Income Housing Fund 50,000$ -$ 50,000$ NOFA for affordable housing project(s) and Kimball Highlands Low/Mod Income Housing Fund 75,000$ -$ 75,000$ NOFA for affordable housing project(s) and Kimball Highlands Library Library Grants Fund 4,349$ 4,349$ -$ Literacy Services Grant 400 of 452
RESOLUTION NO. 2022 –

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY,

CALIFORNIA, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING VARIOUS FISCAL YEAR 2022 MID-YEAR BUDGET ADJUSTMENTS.

WHEREAS, on June 1, 2021, the City Council of the City of National City adopted Resolution No. 2021-68, adopting the budget for Fiscal Year 2022; and

WHEREAS, as part of the mid -year review process, the Finance Department reviewed the first six months for actual revenues and expenditures, and projected the last six months of the fiscal year; and
WHEREAS, the mid-year budget review was presented to the City Council and members of the public on March 15, 2022; and

WHEREAS, the City Manager has requested approval of the Recommended Mid- Year Budget Adjustments (“Exhibit A”).

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NATIONAL CITY,

CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:

Section 1: The City Council of the City of Nat ional City here by approves the Fiscal Year 2022 Recommended Mid -Year Budget Adjustments (“Exhibit A”) and authorizes the City Manager to make the associated adjustments to the Fiscal Year 2022 Budget.

Section 2: That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

PASSED and ADOPTED this 15th day of March, 2022.

Alejandra Sotelo-Solis, Mayor
ATTEST:

Luz Molina, City Clerk
APPROVED AS TO FORM:

Charles E. Bell Jr., City Attorney
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Exhibit “A” - Recommended Mid-Year Budget Adjustments, Fiscal Year 2022 Department Fund Expenditure Revenue Net Explanation
Engineering Parks Fund 15,000$ -$ 15,000$ Water Rate Increases, Additional Properties (Paradise Creek Park and Roosevelt Corridor from 1st St. - 8th St. Sidewalk Landscape, Plants and Trees)
Gas Tax Fund 56,000$ -$ 56,000$ Additional unbudget overtime for Streets unit.

The following page(s) contain the backup material for Agenda Item: Resolution of the City Council of the City of National City, California, amending the Employment Agreement between the City of National City and Charles E. Bell Jr. for the position of City Attorney and authorizing a budget appropriation of $3,600 from the General Fund to cover fiscal year 2022 cost increases. (Finance)
Please scroll down to view the backup material.
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CITY OF NATIONAL CITY, CALIFORNIA

COUNCIL AGENDA STATEMENT

PREPARED BY: DEPARTMENT:

PHONE: APPROVED BY:

AGENDA ITEM NO. MEETING DATE:

ENVIRONMENTAL REVIEW:

FINANCIAL STATEMENT: APPROVED: Finance
ORDINANCE: INTRODUCTION:

ACCOUNT NO.

STAFF RECOMMENDATION:

BOARD / COMMISSION RECOMMENDATION:

RECOMMENDATION:

ATTACHMENTS:
________________

March 15, 2022
ITEM TITL E:

Resolution of the City Council of the City of National City, California, amending the Employment Agreement between the City of National City and Charles E. Bell Jr. for the position of City Attorney and authorizing a budget appropriation of $3,600 from the General Fund to cover fiscal year 2022 cost increases.

Administrative Services
EXPLAN ATION:

The City Attorney’s employment contract was automatically reopened to discuss compensation and benefits, in accordance with Section 3.B, which was triggered by City Council action taken on February 1, 2022 to increase compensation for other managers and executives. Two amendments to the current City Attorney employment contract are proposed. First, a 5.46% equity adjustment salary increase effective October 21, 2022 (Section 3).

Second, removal of the residency requirement and addition of a $1,200 per month housing allowance if the City Attorney maintains residency within the City of National City (Section 20). All other terms, compensation, and benefits will remain the same as the original employment contract.

The specific terms of the Employment Agreement are set forth in the attached “Summary Outlining the Salary and Other Compensation of the City Attorney” The Summary is a requirement of the Brown Act (Government Code Section 54953(c)(3), and must be read aloud into the record at a City Council Meeting.

Molly Brennan

1. Summary Outlining the Salary and Other Compensation of the City Attorney

2. City Attorney Employment Agreement

3. Amendment to the City Attorney Employment Agreement

4. Resolution

This is not a project, and therefore, is not subject to environmental review.

FINAL ADOPTION:

APPROVED: ________________ MIS
Expenditure appropriation to 001-405-000-110: Allowances & Stipends $3,600 to cover FY22 housing allowance.

The budget appropriation needed to cover the salary increase will be included in the fiscal year 2022-2023 budget.

Adopt the Resolution amending the Employment Agreement for City Attorney

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[The Report is to be read aloud at an open meeting of the City Council as an Agenda Item prior to the execution of the employment agreement] Oral Summary Report Outlining
the Salary and Other Compensation of the City Attorney
Government Code Section 54953(c)(3)
The following is a summary of the salary and other compensation under the Employment Agreement to be received by the City Attorney in accordance with the Executive Benefits package:
 Three-year contract
 $190,000 annual salary for year 1
 $197,500 annual salary for year 2
 Potential for $214,208.50 annual salary for year 3
 10 paid fixed holidays per year
 9 days administrative leave per year
 Vacation accrued at the rate of 10.00 hours per month for the first 10 years of employment and at the rate of 13.33 hours per month beginning with the 11th year  Employee life insurance equivalent to the employee’s annual gross salary, up to a maximum of $150,000
 Availability of health, dental, and vision insurance, with up to $1,200 per month of premiums paid by the City
 Participation in CalPERS retirement system
 Vehicle allowance of $750 per month
 Housing allowance of $1,200 per month if resides within the City of National City  If employment is terminated by the City other than for cause, payment of six months’ base salary at the current rate of pay
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EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into this 21st day of October, 2020, by and between the City of National-City, a municipal corporation, (hereinafter called "Employer") and Charles E. Bell Jr. (hereinafter called "Employee") an individual who has education, training and experience in legal issues involving local government, and who is a member in good standing of the State Bar of California, both of whom agree as follows:

S~ction 1 Term.

This Agreement shall remain in full force in effect for a period of three (3) years from October 21, 2020, through October 21, 2023, unless sooner terminated by the Employer or Employee as provided in Section 9, 10 or 11 of this Agreement.

Section 2 Duties and Authority.

Employer agrees to employ Charles E. Bell Jr. as City Attorney, on an at:will basis, to perform the functions and duties specified in the National City Municipal Code and the California Government Code, and to perform other legally permissible and proper duties and functions, commencing on October 21, 2020.

Section 3 Compensation.
( '
A. _ Base Salary: Employer agrees to pay Employee an anpual base salary of one hundred ninety thousand ($190,000), payable in installments at the same time that the other executive employees of the Employer are paid. Employer agrees to pay Employee a 3% annual increase after year 1 and 2 upon satisfactory annual reviews.

B. This Agreement shall be re-opened to discuss compensation and benefits if, and at the time, managers or executives receive any increase in compensation or benefits.

C. Beginning October 21, 2023, consideration shall be given on an annual basis to increase salary, based upon increases in the Consumer Price Index ("CPI"), as that term is defined at Government Code section 3511.l(b). Any increase in salary shall be dependent upon ,- the results of the performance_ evaluation conducted under the provisions of Section 12 of this Agreement.
, D. Deferred Compensation: Employer shall provide seven-thousand five-hundred ($7500) annually to Employee's selected deferred compensation plan. This payment shall be made each Octqber in years 2021, 2022, and 2023. ,
Section 4
A.

Health, Disability and Life Insurance Benefits.

The Employer agrees to provide Employee a cafeteria health benefit of $1200.00 per month.

B. .,The Employer agrees to put into force and to make require_d premium payments for. short term and long term disability coverage for the Employee.

C. The Employer shall pay the amount of premium due for term life insurance in the amount of $150,000. The Employee shall name the beneficiary of the life insurance policy. 1 2020 Employment Agreement
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I'
Section 5 Vacation, Sick and Military Leave.

A. The Employee shall accrue sick and vacation leave and other paid leave on an annual basis at the rate provided to Executive employees.

B. The Employee is entitled to accrue all unused vacation and sick leave, without limit, and in the event the Employee's employment is terminated, either voluntarily or involuntarily, the Employee shall be compensated for all unused vacation and sick leave in accordance with the Employer's customary practice for Executive Employees.

C. The Employee shall be entitled to military reserve leave time pursuant to state law and City policy.

Section 6 Monthly Vehicle Allowance.

The Employer agrees to pay to the Employee, during term of this Agreement and in addition to other salary and benefits herein provided, the sum of $9000.00 per year, payable at $750.00 per month, as a vehicle allowance to be used to purchase, lease, or own, operate and maintain a vehicle. The Employee shall be responsible for paying for liability, property damage, and comprehensive insurance coverage upon such vehicle and shall further be responsible for all expenses attendant to the purchase, operation, maintenance, repair, and regular replacement of said vehicle. The Employer shall reimburse the Employee at the IRS standard mileage rate for any business use of the vehicle beyond the greater National City area. For purposes of this Section, use of the car within the greater National City area is defined as travel to locations within a 50 mile radius of the National Cify Civic Center. · Section 7 Retirement.

The Employer agrees to enroll the Employee into the Public Employees' Retirement System and to make all the appropriate contributions on the Employee's behalf, for the required Employer share. Employee shall pay the entire employee share, as determined by CalPERS.

Section 8 General Business Expenses.

1. Employer agrees to budget for and to pay for professional dues and subscriptions of the Employee necessary for continuation and full participation in national, regional, state and local associations, and organizations necessary and desirable for the Employee's continued professional participation, growth, and advancement, and for the good of the Employer.

2. Employer agrees to budget for and to pay for travel and subsistence. expenses of Employee for professional and official travel, meetings, and occasions to adequately continue the professional development of Emplqyee and to pursue necessary official functions for Employer, including but not limited to the League of California Cities, and such other national, regional, state and local governmental groups and committees in which Employee services as a member.

3. Employer also agrees to budget for and to pay for travel and subsistence expenses of Employee for short courses, institutes and seminars that are necessary for the Employee's professional.development and for the good of the Employer.

4. Employer recognizes that certain expenses of a, non-personal but job-r_elated nature are incurred by Employee, and agrees to reimburse or to pay said general expenses. The Finance Director is authorized to disburse such moneys upon receipt of duly executed expense or petty cash vouchers, receipts, statements or personal affidavits.

5. - The Employer acknowledges the value of having Employee participate and be directly involved in local civic clubs or organizations. Accordingly, Employer shall pay for the 2 2020 Employment Agreement
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reasonable membership fees and/or dues to enable the Employee to become an active member in local civic clubs or organizations.

6. The Employer shall provide Employee with a computer, software, fax/modem, and cell phone required for the Employee to perform the job and to maintain communication.

Section 9 Termination.
· For the purpose of this Agreement, termination shall occur when:

1. The majority of the Employer's City Council votes to terminate the Employee at a duly authorized public meeting.

2. If the Employer, citizens or legislature acts to amend any provisions of the state or · 1ocal law pertaining to the role, powers, duties, authority, and responsibilities of the Employee's position that substantially changes the form of government, the Employee shall have the right to declare that such amendments constitute termination.

3. If the Employer reduces the base salary, compensation or any other financial benefits of the Employee, unless it is applied in no greater percentage than the average reduction of all department heads, such action shall constitute a breach of this Agreement and will be regarded as a termination.

4. If the Employee resigns following an offer to accept resignation, whether formal or informal, by the Employer as representative of the majority of the governing body that the Employee resign, then the Employee may declare a: termination as of the date of suggestion.

5. Breach of contract declared by either party with a 30 day cure period for either Employee or Employer. Written notice of a breach of contract shall be provided in accordance with the provisions of Section 20.

Section 10 Severance.

The Employee is an at-will employee, serving at the pleasure of the Employer's City Council. This Agreement, and the Employee's employment with the Employer, may be terminated with or without cause by the Employer's City Council. In the event the Employee is terminated for cause, or voluntarily resigns his position with the Employer, then the Employee shall not be entitled to the payment of Severance by the Employer.

In the event the Employee is terminated by the Employer other than for cause, and during such time that Employee is willing and able to perform his duties under this Agreement, then Employer agrees to pay Severance equal to one-half year's base salary at the current rate of pay.

This Severance shall be paid in one lump sum unless otherwise agreed to by the Employer and the Employee. This severance shall include the·"Employee's continued participation in the Employer's (health care plan for a period of six months after his separation from City Employment. The value of the City's contribution to the cost of health care shall not exceed the established contribution for Executive employees as of the date of the Employee's separation.

In the event of Severance, the Employee shall also be compensated for all accrued sick and vacation leave.

If the Employee is terminated because of a conviction of a felony, then the Employer is not obligated to pay Severance under this section. If the Employee is convicted of a crime involving an abuse of office or position, then regardless of the term of the contract, if the Employee is terminated, any cash settlement, including severance, related to the termination received by Employee from Employer shall be fully reimbursed to the Employer.

I
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Section 11 Resignation.

In the event that the Employee voluntarily resigns his position with the Employer, the Employee shall provide a minimum of thirty (30) days' notice unless the parties agree otherwise.

Section 12 Performance Evaluation.

Employer may annually review the perfonriance of the Employee in the Employee's a~iversary month subject to a process, form, criteria, and format for the evaluation which shall be mutually agreed upon by the Employer and Employee. The process at a minimum may include the opportunity for both parties to: (1) prepare a written evaluation, (2) meet and discuss the evaluation, and (3) present a written summary of the evaluation results. The final written evaluation should be completed and delivered to the Employee within thirty (30) days of the evaluation meeting.

Section 13 Hours of Work.

It is recognized that the Employee must devote a great deal of time outside the normal office hours on business for the Employer, and to that end· Employee shall be allowed to establish an appropriate work schedule, compatible with the normal business hours of the City of National City.

Section 14 Outside Activities.

A. Disclosure and Acknowledgement: Employee has disclosed and acknowledged one (1) outside activity (Treasurer for the Cal Poly Black Alumni Chapter). Should this present a conflict of interest or inability for the City Attorney to provide full service to the City, he will withdraw from such activities. ·
B. Notice and Consent: Employee shall give written notice to Council for Council's approval of any new outside activities of Employee.

Section 15 Indemnification.

In accordance with federal, state or local law, Employer shall defend, save harmless and indemnify Employee against any tort, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the course and scope of the performance of Employee's duties as City Attorney, or resulting from the exercise of judgment or discretion in connection with the course and scope of performance .of program duties or responsibilities, unless the act or omission involved willful or wanton conduct. In such cases, the Employee may request and the Employer shall not unreasonably refuse to provide independent legal representation at the Employer's expense and the Employer may not unreasonably withhold approval. Legal representation provided by Employer for Employee shall extend until a final determination of the legal action, including any appeals brought by either party. The Employer shall indemnify Employee against any and all losses, damages, judgments, interest, settlements, fines, court costs, and other reasonabfo costs · and expenses of legal proceedings, including attorney's fees and any other liabilities incurred by, imposed_ upon, or suffered by such Employee in connection with or resulting from any claim, action, suit or proceeding, actual or threatened, arising out of or in connection with the performance of the Employee in the course and scope of her duties. Any settlement of any claim 4 2020 Employment Agreement
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must be made with prior approval of the Employer in order for indemnification, as provided in this Section, to be available. ·
Employee recognizes the Employer shall have the right to compromise and settle any claim or suit. Further, Employer agrees to pay all reasonable litigation expenses of Employee throughout the pendency of any litigation to which the Employee is a party, witness or advisor to the Employer. Such expense payments shall continue beyond Employee's service to the Employer as long as litigation is pending. Further, Employer agrees to pay Employee reasonable consulting fees and travel expenses when Employee serves as a witness, advisor or consultant to Employer regarding pending litigation. .
· If Employee is convicted of a crime involving an abuse of his office or position, as defined in Government Code section 53243.4, then Employee shall fully reimburse Employer for any funds provided for Employee's criminal defense, if any such funds were provided pursuant to or consistent with this Section. This paragraph shall not be construed as creating or implying an obligation by Employer to provide a criminal defense to Employee.

Section 16 Bonding.

Employer shall bear· the full cost of any fidelity or other bonds required of the Employee under any law or ordinance.

Section 17 Other Terms and ConditiQns of Employment. .

A. The Employer shall fix any such other terms and conditions .of employment, as it may detemiine from time to time, relating to the performance of the Employee, provided such terms and condi~ions · are not inconsistent with or in conflict with the provisions of this Agreement, the National City Municipal Code, or any other law.

B. Except 8:S otherwise provide in this Agreement, the Employee shall be entitled to the highest level of benefits that are enjoyed by other appointed employees of the Employer as provided in the Municipal Code or by practice.

Section 18 Notices.

Notice pursuant to this Agreement shall be given by depositing in the custody of the United States Postal Service, postage prepaid, addressed as follows:

EMPLOYER: Mayor
City of National City
1243 National City Boulevard
National City, CA 91950-4301
EMPLOYEE: Charles E. Bell Jr.
[ At the address of the .

Employee's principal
residence]
Alternatively, notice required pursuant to this Agreement may be personally served in the same manner as is applicabkto civil judicial practice. Notice shall be deemed given as of the date of personal service or as the date of deposit of such written notice in the course of transmission in the United States Postal Service.

Section 19 General Provisions.

A. Integration. This Agreement sets forth and establishes the entire understanding between the Employer and the Employee relating to the employment of the Employee by the Employer. Any prior discussions or representations by or between the parties are merged into 5 2020 Employment Agreement
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and rendered null and void by this Agreement. The parties by mutual written agreement may amend any provision of this Agreement during the life of the Agreement. Such amendments shall be incorporated and made a part of this Agreement.

B. Binding Effect. This Agreement shall be binding on the Employer and_ the Employee as well as their heirs, assigns, executors, personal representatives and successors in interest.

C. Effective Date. This Agreement shall become effective on October 21, 2020.

D. Severability. The invalidity or partial invalidity of any portion of this Agreement will not effect the validity of any other provision. In the event that any provision of this Agreement is held to be invalid, the remaining provisions shall be deemed to be in full force and effect as if they have been executed by both parties subsequent to the expungement or judicial modification of the invalid provision.

E. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

F. Construction. The parties acknowledge and agree that (1) each party is of equal bargaining strength, (2) each party has actively participated in the drafting, preparation and negotiation of this Agreement, (3) each such party has consulted with or has had the opportunity to consult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Agreement, (4) each party and such party's counsel and advisors have reviewed this Agreement, (5) each party has agreed to enter into this Agreement following such review and the rendering of such advice, and (6) any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement, or any portions hereof, or any amendments hereto.

Section 20 City Attorney's Residency.

The City Attorney acknowledges and agrees that he will establish· and maintain residency within the City of National City.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written.

CITY OF NATIONAL CITY
By:~ . Afajandasotelo-Sr
APPROVED AS TO FORM:

EMPLOYEE
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RESOLUTION NO. 2020-190

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, APPOINTING CHARLES E. BELL JR. AS CITY ATTORNEY AND AUTHORIZING THE MAYOR TO EXECUTE A 3 YEAR EMPLOYMENT AGREEMENT BETWEEN THE CITY OF NATIONAL CITY AND CHARLES E. BELL JR. WITH THE EFFECTIVE DATE OF OCTOBER 21, 2020 .

WHEREAS, after a Nation-wide City Attorney recruitment conducted by The Hawkins Company, Charle!;, E. Bell Jr. was selected as City Attorney.

NOW, THEREFORE, BE IT RESOLVED by the City Cquncil of the City of National City as follows:

SECTION 1. Charles E. Bell Jr. is hereby appointed to the position of City Attorney for the City of National City effective October 21, 2020.

SECTION 2. In consideration of Mr. Bell's acceptance of the appointments made hereinabove, the City Council hereby approves the following employment terms and conditions:

A. Commencement of Employment
October 21, 2020 is hereby designateq as the date of commencement of Mr.

Bell's duties to serve as City Attorney.

B. Salary I Compensation
The base salary to be paid to Mr. Be.II for his services as City Attorney, shall be $190,000 annually with a .3% . annual increase after year 1 . and_ 2 upon satisfactory annual evaluations, annual payment of $7,500 for Deferred 1 Compensation, $750.00 per month for vehicle allowance payable in accordance with the City's customary payroll practices.

C. Benefits
In addition to base salary, Mr. Bell shall receive such other benefits as are provided to City Council-appointed officers of the City, including .holidays, vacation leave, executive leave, sick leave, and insurance. and retirement benefits.

SECTION 3. ,The Mayor is heret;iy authorized to execute an Employment Agreement between the City and Charles E. Bell Jr. with an initial term <;>f three (3) years. Said Agreement is on file in the office of the City Clerk.

PASSED and ADOPTED this 20th day of October, 2020
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Passed and a dopted by the Council of the City of N ational City, Californ ia, on October 20, 2020 by the following vote, to-wit:

Ayes :

Nays:

Absen t:

Abstain:

Counc ilmembers Cano , Morrison , Qui ntero, Rios, Sotelo-Sol is.

None.

AUTHENTI CATE D BY: ALEJANDRA SOTELO -SOLIS
Mayor of the City of National City, California
MICHAEL R. DALLA
City Clerk of the City of National City, California
BY:

Deputy
I HEREBY CERT IFY that the above and forego ing is a full, true and correct copy of RESOLUTION NO. 2020-190 of the City of National City, Californ ia, passed and adopted by the Counci l of said City on October 20, 2020.

By: ---- -----------
Deputy
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CITY OF NATIONAL CITY, CALIFORNIA

COUNCIL AGENDA STATEMENT
MEETING DATE: October 20, 2020
rEM TITLE:

AGENDA ITEM N0.4
Resolution of the City Council of the City of National City, Appo inting Charles E. Bell Jr. as City Attorney and Authorizing the Mayor to Execute a 3 year Employment Agreement between the City of National City and Charles E. Bell Jr. with the effective date of October 21, 2020.

PREPARED BY: Angil Morris-Jones DEPARTMENT:

PHONE: Ext. 4222 APPROVED BY:

EXPLANATION:

After a Nation-wide City Attorney recruitment conducted by The Hawkins Company, Charles E. Bell Jr. was selected as City Attorney .

At the end of the regular City Council Meeting on October 6, 2020 , a two part Report Out of Closed Session was given by the City Attorney :
1) On September 19, 2020,City Council selected a candidate for the appointment of a City Attorney by a 5 to O vote and directed that the terms of the Employment Agreement be brought to City Council for approval at the October 6, 2020 Closed Session ; and
2) On October 20, 2020 a Report Out of Closed Session , the City Council approved the terms of the Employment Agreement by a 5-0 Vote and directed that the Employment Agreement be presented on October 20, 2020 City Council Meeting for formal approval and appointment.

The Brown Act requires that salary and benefits of Executive Employees are read aloud prior to the Adoption of ,e Resolution Appo inting the City Attorney and Approving the Employment Agreement pursuant to Government -.;ode§ 54953 (c)(3).

FINANCIAL STATEMENT: APPROVED: Finance
ACCOUNT NO. 001-405-000-1* (Personnel) APPROVED: MIS
Due to net cost savings realized by the Deputy City Attorney Position vacancy , overall City Attorney's Office Personnel expenses are expected to end the year within budget.

ENVIRONMENTAL REVIEW:

This is not a project and therefore , not subject to environmental review.

ORDINANCE: INTRODUCTION: D FINAL ADOPTION: D
STAFF RECOMMENDATION:

Adopt Resolution.

BOARD/ COMMISSION RECOMMENDATION:

N/A
ATTACHMENTS:
1) Employment Agreement
2) Resolution
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(
\.

EMPLOYMENT AGREEMENT
City Attorney
City of National City
California
I
2020
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EMPLOYMENT AGREEMENT

CITY ATTORNEY

TABLE OF CONTENTS
Introduction
Section 1 Term
Section 2 Duties and Authority
Section 3 Compensation
Section 4 Health, Disability and Life Insurance
Benefits
Section 5 Vacation, Sick and Military Leave
Section 6 Monthly Vehicle Allowance
Section 7 Retirement
Section 8 General Business Expen!j5es
Section 9 Termination
Section 10 Severance
Section 11 Resignation
Section 12 Performance ~valuation
Section 13 Hours of Work
Section 14 Outside Activities
Section 15 Indemnification
Section 16 Bonding
Section 17 Other Terms and Conditions of
Employment
Section 18 Notices
Section 19 General Provisions
Section 20 City Attorney's Residency
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EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into this 21st day of October, 2020, by and between the City of National City, a municipal corporation, (hereinafter called "Employer") and Charles E. Bell Jr. (hereinafter called "Employee") an individual who has. education, training and experience in legal issues involving local government, and who is a member in good standing oftlie State Bar of California, both.ofwhmn agree as follows:

Section 1 Term.

Section 2 Duties and Authority.

Employer agrees to employ Charles E. Bell Jr. as City Attorney, on an at-will basis, to perform the functions and duties specified in the National City Municipal Code and the California Government Code, ~nd to perform other legally permissible and proper duties and functions, commencing on October 21, 2020.

Sectiori 3 Compensation.

A. Base Salary: Employer agrees to pay Employee an annual base salary of one hundred ninety thousand ($190,000), payable in installments at the same time that the other executive employees of the Employer ate paid. Employer agrees to pay Employee a 3% annual increase after year 1 and 2 upon satisfactory annual reviews. · . B. This Agreement shall be re-opened to discuss compensation and benefits if, and at the time, managers. or executives receive any increase in compensation or benefits.

C. Beginning October 21, 2023, consideration shall be given on an annual basis to increase salary, based upon increases in the Consumer Price Index ("CPI''), as that term is defined at Government Code section 3511. l(b ). Any increase in salary shall be dependent upon the results of the performance evaluation conducted under the provisions of Section 12 of this Agreement.

D. Deferred Compensation: Employer shall provide seven-thousand five-hundred ($7500) annually to Employee's selected defened compensation plan. This payment shall be made each October in years 2021, 2022, and 2023.

Section 4
A.
per month.

Health, Disability and Life Insurance Benefits.

The Employer agrees to provide Employee a cafeteria health benefit of $1200.00 B. The Employer agrees to put ~into force and to make required premium payments for short term and long tenn disability coverage for the Employee. · C. The Employer sh.all pay the amount of premium due for tenn life insurance in the amount of $150,000. The Employee shall name the beneficiary of the life insurance policy. 1 2020 Employment Agreement
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Section 5 Vacation, Sick and Military Leave.

A. The Employee shall accrue sick and vacation leave and other paid leave on an annual basis at the rate provided to Executive employees.

B. The Employee is entitled to accrue all unused vacation and sick leave, without limit,. and in the event the Employee's employinent is terminated, either voluntarily or inv9luntarily, the Employee shall be compensated for all unused vacation and sick leave in accordance with the Employer's customary practice for Executive Employees.

C. The Employee shall be entitled to military reserve leave time pursuant to state law and City policy.

Section 6 Monthly Vehicle Allowance.

The Employer agrees to pay to the Employee, dming terin of this Agreement and in addition to other salary and benefits herein provided, the sum of $9000.00 per year, payable at $750.00 per month, as a vehicle allowance to be used to purchase, lease, or own, operate and maintain a vehicle. The Employee shall be responsible for paying for liability, property damage, and comprehensive insurance coverage upon such vehicle and shall further be responsible for all expenses attendant to the purchase, operation,
1 maintei:iance, repair, and regul_ar replacement of
said vehicle. The Employer shall reimburse the Employee at the IRS standard mileage rate for any business use of the vehicle beyond the greater National City area. For purposes of this· Section, use of the car within the· greater National City area is defined as travel to locations withip a 50 mile radius of the National City Civic Centec Section 7 Retirement.

The Employer agrees to enroll the Employee into the Public Employees' Retirement Systerh and to make all the appropriate contributions on the Employee's behalf, for the required Employer share. Employee shall pay the entire employee share, as determined by CalPERS.

Sect.ion 8 General Business Expenses.

1. Employer agrees to budget for and to pay for professional dues.and subscriptions of the Employee necessary for continuation and full participation in. national, regional, state and local associations, and organizations necessary and desirable for the Employee's continued professional participation, growth, and advancement, and for the good of the Employer.

2. Employer agrees to budget for and to pay for travel and subsistence expenses of Employee for professional and official travel, meetings, and occasions to adequately continue the professional development of Employee and to pursue necessary official functions for Employer, including but not limited to the League of California Cities, and Such other national, regional, state anci local governmental groups and committees in which Employee services as a member.

4. Employer recognizes that certain expenses of a non-personal but job-related nature are incurred by Employee, and agrees to reimburse or to pay said general expenses. The Finance Director is authorized to disburse such moneys upon receipt of duly executed expense or petty cash vouchers, receipts, statements or personal affidavits.

5. The Employer acknowledges the value of having Employee participate and be directly involved in local civic clubs or organizations. Accordingly, Employer shall pay for the 2 2020 Employment Agreement
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reasonable meni.bership fees and/or dues to enable the Employee to become ari active member in local civic clubs or organizations.

6. The Employer shall provide Employee with a computer, software, fax/uiodem, and cell phone required for the Employee to perform the job and to maintain communication.

Section 9 Termination.

For the purpose of this Agreement; te1mination shall occtir when:

1. The majority of the Employer's City Council votes to tenninate the Employee at a duly authorized public meeting.

2. If the Employer, citizens or legislature acts to amend any provisions of the state or local law pertaining to the role, powers,· duties, authority, and responsibilities of the Employee's position that substantially changes the fomi of government, the Employee shall have the nght to declare that such amendments constitute termination.

3. If the Employer· reduces the base salary, compensation or any other financial benefits of the Employee, unless it is applieµ in no greater percentage than the average reduction of all department heads, such action shall- constitute a breach of this Agreement and · will be regarded as a tennination.

4. If the Employee resigns following an offer to accept resignation, whether formal or informal, by the Employer as representative of the majoriti of the governing body that the Employee resign, then the Employee may declare a termination as of the date of suggestion.

5. Breach of contract declared by either party with a 30 day ctlre period for either Employee or Employer. Written notice of a breach of contract shall be provided in accordance with the provisions of Section 20. · ·
Section 10 Severance.

The Employee is an at-will employee, serving at the pleasure of the Employer's City Council. Thi_s Agreement, and the Employee's employment with the Employer, may be · terminated with or without cause by the Employer's City Council. In the event the Employee is terminated for cause, or voluntarily resigns his· position with the Employer, then the Employee shall not be entitled to the payment of Severance by the Employer.

In the event the Employee is terminated by the Employer other than for cause, arid during such time that Employee is willing and able to perform his duties under this Agreement, then Employer agrees to pay Severance equal to one-half year's base salary at the current rate of pay.

This Severance shall be paid in one lump sum unless otherwise agreed to by the Employer and the Employee. This severance shall include the Employee's continued participation in the Employer's health care plan for a period of six months after his separation from City Employment. The value of the City's contribution to the cost of health care shall not exceed the established contribution for Executive employees as of the date of the Employee's separation.

In the event of Severance, the Employee shall also be compensated for all accrued sick and vacation leave. ·
If the Employee is termin!:lted because of a conviction of a felony, then the Employer is not obligated to pay Severance under this section. If the Employee is convicted of a crime involving an abuse of office or position, then regardless of the term of the contract,- if the Employee is terminated, any cash settlement, including severance, related to the termination received by Employee from Employer shall be fully reimbursed to the Employer. 3 2020 Employment Agreement
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Section 11 Resignation.

In the event that the Employee voluntarily resigns his position with the Employer, the I
Employee shall provide a minimum of thirty (30) days' notice unless the parties agree otherwise.

Section 12 Performance Evaluation.

Employer may annually review the performance of the Employee in the Employee's anniversary month subject to a process, forin, criteria, and format for the evaluation which shall be mutually agreed upon by the Employer and Employee. The process at a minimum may include the opportunity for both parties to: . (1) prepare a written evaluation, (2) meet and discuss the evaluation, and (3) present a written summary of the evaluation results. The final written evaluation should be completed and ~elivered to the Employee within thirty (30) days of the evaluation meeting.

Section 13 Hours of Work. ·
It is recognized that the Employee must devote a great deal of time outside the normal office hours on business for the Employer, and to that end Employee shall be allowed to establish an appropriate work schedule, compatible with the normal business hours of th~ City of National City. ·
Section 14 Outside Activities.

A. Disclosure and Acknowledgeme!lt: Employee has djsclosed and acknowledged one (1) outside activity (Treasurer for the Cal Poly Black Alumni Chapter). Should this present a conflict of interest or ihability for the City Attorney to provide full service. to the City, he will withdraw from such activities.

B. Notice and Consent: Employee shall give written notice to Council for Council's approval of any new outside activities of Employee.

Section 15 lnde~hification.

Employee recognizes the Employer shall have the right to compromise and settle any claim or suit. Further, Employer agrees to pay all reasonable litigation expenses of Employee throughout the pendency of any litigation to which the Einployee is a party, witness or advisor to the Employer. Such expense .payments shall continue beyond Employee's service to the Employer as long as litigation is pending. F,urther, Employer agrees to pay Employee reasonable consulting fees and travel expenses when Employee serves as a witness, advisor or consultant to Employer regarding pending litigation.

If Employee is convicted of a crime involving an abuse of his office or position, as defined in Government Code section 53243.4, then Employee shall fully reimburse Employer for any funds provided for Employee's criminal defense, if any such funds were provided pursuant to or consistent with this Section. This paragraph shall not be construed as creating or implying an obligation by Employer to provide a criminal defense to Employee.

Section 16 Bonding.

Employer shall bear the full cost of any fidelity or other bonds required ·of the Employee under ariy law or ordin~nce.

Section 17 Other Terms and Conditions of Employment.

A. The Employer shall fix any such other terms and.conditions·of employment, as it may determine from time to time, relating to the performance of the Employee, provided such terms ·and conditions are not inconsistent with or in conflict with the provisions of this Agreement, the National City Municipal Code, or any other law.

B. Except as otherwi_se provide in this Agreement, the Employee st1all be entitled to the highest level of benefits that are enjoyed by other appointed employees of the Employer as provided in the Municipal Code or by practice. ·
Section 18 Notices.

Notice pursuant to this Agreement shall be given by depositing in the custody of the United States Postal Service, postage prepaid, addressed as follows:

EMPLOYER: Mayor
City:ofNational City
1243 National City Boulevard
National City, CA 91950~4301
EMPLOYEE: Charles E. Bell Jr.
[ At the address of the
Employee's principal
residence]
Alternatively, notice required pursuant to this Agreement may be personally served in the same manner as is applicable to civil jud1.cial practice. Notice shall be deemed given as of the date of personal service or as the date of deposit of such written notice in the course of transmission in the United States Postal Service.

Section 19 General Provisions.

A. Integration. This Agreement sets forth and establishes the entire understanding between the Employer and the Employee relating to the employment of the Employee by the Employer. Any prior discussions or representations by or between the parties are merged into 5 2020 Employment Agreement
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and rendered null and void by this Agreement. The partie s by mutual written agreem ent may amend any provision of this Agreement during the life of the Agreement. Such amendments shall be incorporated and made a part of this Agreement.

B. Binding Effect. This Agreement shall be binding on the Employer and the Employee as well as their heirs, assigns, executors, personal repre sentatives and successors in interest.

C. Effective Date. This Agreement shall become effective on October 21, 2020 .

D. Severability. The invalidity or partial invalidit y of any portion of this Agreement will not effect the validity of any other provision. In the event that any provision of this Agreement is held to be invalid, the remaining provisions shall be deemed to be in full force and effect as if they have been executed by both parties subsequent to the expungement or judicial modification of the invalid provision .

E. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

F. Construction. The parties acknow ledge and agree that (1) each party is of equal bargaining strength , (2) each party has actively participated in the drafting, preparation and negotiation of this Agreement , (3) each such party has consulted with or has had the opportunity to cons ult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Agreement, (4) each party and such party's counsel and advisors have reviewed this Agreement, (5) each party has agreed to enter into this Agreement following such review and the rendering of such advice, and (6) any rule or construction to the effect that ambiguitie s are to be resolved against the drafting party shall not apply in the interpretation of this Agre ement, or any portions hereof , or any amendments hereto.

Section 20 City Attorney's Residency.

The City Attorney acknowle dges and agrees that he will establish and maintain residency within the City of National City.

IN WITNESS WHEREOF , the parties hereto have executed this Agreement on the date and year first above written.

CITY OF NATIONAL CITY
By:

Alejandra Sotelo-So lis, Mayor
APPROVED AS TO FORM:

Angil P. Morris-Jones, City Attorney

EMPLOYEE
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RESOLUTION NO. 2020 -

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, APPOINTING CHARLES E. BELL JR. AS CITY ATTORNEY AND AUTHORIZING THE . . . ( MAYOR TO EXECUTE A 3 YEAR EMPLOYMENT AGREEMENT BETWEEN THE CITY \"-. OF NATIONAL CITY AND CHARLES E. BELL JR. WITH THE EFFECTIVE DATE OF OCTOBER 21, 2020
WHEREAS, after a Nation-wide City Attorney recruitment conducted by The Hawkins· .

Company, Charles E. Bell Jr. was selected as City Attorney. · NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of National City as follows: ·
SECTION 1. Charles E. Bell Jr. is hereby appointed to the position of City Attorney for the City of National City effective October 21, 2020.

SECTION 2. In consideration of Mr. Bell's acceptance of the appointments made hereinabove, the City Coundl hereby approves the following employment terms and conditions:

A Commencement of Employment ,
October 21, 2020 is hereby designated as the date of commencement of Mr.

Bell's duties:to serve as City Attorney.

B. Salary/ Compensation
The base salary to be paid to Mr. Bell for his services as City Attorney, shall be . $190,000 annually with a 3% annual increase after yec1r 1 and 2 of satisfactory annual evaluations, annual payment of $7,500 for Deferred Compensation,. $750.00 pe~ month for vehicle allowance payable in accordance with the City's customary payroll practices.

C. Benefits
In addition to base salary, Mr. Bell shall receive such other benefits as are provided to City Council-appointed officers of· the City, including holidays, vacation leave, ·executive leave, sick leave, and insurance and retirement benefits. '
SECTION 3. The Mayor is hereby authorized to execute an Employment Agreement between the City and Charles E. Bell Jr. with an initial term of three (3) years. Said Agreement is on file in the office of the City Clerk.

PASSED and ADOPTED this 20th day of October, 2020
ATTEST:

Michael R. Dalla,· City Clerk
APPROVED AS TO FORM:

Angil P. Morris-Jones, City Attorney
Alejandra Sotelo-Solis, Mayor
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RESOLUTION NO. 2022 -

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY,

CALIFORNIA AMENDING THE EMPLOYMENT AGREEMENT BETWEEN THE CITY OF NATIONAL CITY AND CHARLES E. BELL JR. FOR THE POSITION OF CITY ATTORNEY AND A BUDGET APPROPRIATION OF $3,600 FROM THE GENERAL FUND TO COVER FISCAL YEAR 2022 COST INCREASES

WHEREAS, the City Attorney’s employment contract was automatically reopened to discuss compensation and benefits, in accordance with Section 3.B, which was triggered by City Council action taken on February 1, 2022 to increase compensation for other managers and executives; and

WHEREAS, two amendments to the current City Attorney employment contract are proposed:

1) A 5.46% equity adjustment salary increase effective October 21, 2022 (Section 3).

2) Removal of the residency requirement and addition of a $1,200 per month housing allowance if the City Attorney maintains residency within the City of National City (Section 20).

WHEREAS, all other terms, compensation, and benefits will remai n the same as the original employment contract; and

WHEREAS, City staff recommends adopting the r esolution to amend the Employment Agreement with Charles E. Bell Jr., City Attorney.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NATIONAL CITY,

CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:

SECTION 1: Approves amending the Employment Agreement between the City of National City and Charles E. Bell Jr. for the position of City Attorney.

SECTION 2: The Mayor is hereby authorized to execute the Amended Employment Agreement between the City of National City and Charles E. Bell Jr.

SECTION 3: Authorizes a budget appropriation of $3,600 from the General Fund to cover Fiscal Year 2022 cost increases.

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Resolution No. 2022 –
Page Two

SECTION 4 : That the City Clerk shall certify the passage and adoption of this Resolution and enter it into the book of original Resolutions.

PASSED and ADOPTED this 15th day of March, 2022.

Alejandra Sotelo-Solis, Mayor
ATTEST:

Luz Molina, City Clerk
APPROVED AS TO FORM:

Jennifer K. Gilman, Assistant City Attorney
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EMPLOYMENT AGREEMENT
City Attorney

City of National City
California
Adopted October 2020
Amended March 2022
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EMPLOYMENT AGREEMENT

CITY ATTORNEY

TABLE OF CONTENTS
Introduction
Section 1 Term
Section 2 Duties and Authority
Section 3 Compensation
Section 4 Health, Disability and Life Insurance
Benefits
Section 5 Vacation, Sick and Military Leave
Section 6 Monthly Vehicle Allowance
Section 7 Retirement
Section 8 General Business Expenses
Section 9 Termination
Section 10 Severance
Section 1 1 Resignation
Section 12 Performance Evaluation
Section 13 Hours of Work
Section 14 Outside Activities
Section 15 Indemnification
Section 16 Bonding
Section 17 Other Terms and Conditions of
Employment
Section 18 Notices
Section 19 General Provisions
Section 20 City Attorney’s Residency
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EMPLOYMENT AGREEMENT
THIS AGREEMENT made and enteredintothislet day of October,2020, by and between the Cityof NationalCity,a municipalcorporation,(hereinaftercalled“Employer”) and CharlesE. BellJr.(hereinaftercalled“Employee”) an individualwho has education,training and experiencein legalissuesinvolvinglocalgovernment, and Who is a member in good standingof theStateBar of California,bothof whom agreeas follows:

Section 1 Term.

This Agreement shallremain in fullforce in effectfor a period of three(3) years from October 21, 2020, through October 21, 2023, unlesssooner terminatedby the Employer or Employee as providedinSection9, 10 or 11 of thisAgreement.

Section 2 Duties and Authority.

Employer agreesto employ CharlesE. BellJr.as CityAttorney,on an at-willbasis,to perfmm the functionsand dutiesspeciﬁed in the National City Municipal Code and the CaliforniaGovernment Code, and to perform other legallypermissibleand proper dutiesand functions,commencing on October 21, 2020.

Section 3 Compensation.

B. Employer agreesto pay Employee a 5.46% equityincreaseeffectiveOctober 21, 2022, in addition to the 3% identiﬁed in Section 3.A, for a totalsalary increase of

8.46%.

C. ThisAgreement shallbe re-openedtodiscusscompensationand beneﬁtsif,and at thetime,managers or executivesreceiveany increaseincompensationor beneﬁts.

D. Beginning October 21, 2023, considerationshallbe given on an annual basisto increasesalary,based upon increasesin the Consumer Price Index (“CPI”),as thatterm is deﬁned atGovernment Code section3511.1(b).Any increaseinsalaryshallbe dependentupon the resultsof the performance evaluationconducted under the provisionsof Section12 of this Agreement.

E. Deferred Compensation: Employer shallprovide seven-thousandﬁve-hundred ($7500) annuallyto Employee’s selecteddeferredcompensation plan.This payment shallbe made each October in years 2021, 2022, and 2023.

Section 4 Health, Disability and Life Insurance Benefits.

A. The Employer agreesto provideEmployee a cafeteriahealthbeneﬁt of $1200.00 permonth.

B. The Employer agrees to put intoforce and to make requiredpremium payments forshortterm and long term disabilitycoveragefortheEmployee. 1 2020 Employment Agreement, Amended 2022
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C. The Employer shallpay theamount of premium due forterm lifeinsuranceinthe amount of $150,000. The Employee shallname thebeneﬁciaryofthelifeinsurancepolicy.

Section 5 Vacation, Sick and Military Leave.

A. The Employee shallaccrue sickand vacationleaveand otherpaid leaveon an annualbasisattherateprovidedto Executiveemployees.

B. The Employee is entitledto accrueallunused vacationand sickleave,without limit,and in the event the Employee’s employment is terminated,eithervoluntarilyor involuntarily,the Employee shallbe compensated for allunused vacationand sick leave in accordancewiththeEmployer’s customarypracticeforExecutiveEmployees.

C. The Employee shallbe entitledtomilitaryreserveleavetimepursuantto statelaw and Citypolicy.

Section 6 Monthly Vehicle Allowance.

The Employer agreesto pay to the Employee, during term of thisAgreement and in additionto othersalaryand beneﬁts hereinprovided,the sum of $9000.00 per year,payableat $750.00 per month, as a vehicleallowanceto be used to purchase,lease,or own, operateand maintaina vehicle.The Employee shallbe responsibleforpaying forliability,propertydamage, and comprehensiveinsurancecoverageupon such vehicleand shallfurtherbe responsibleforall expenses attendantto the purchase,operation,maintenance,repair,and regularreplacementof saidvehicle.The Employer shallreimbursethe Employee atthe IRS standardmileage ratefor any businessuse of the vehiclebeyond the greaterNational City area.For purposes of this Section,use of the car within the greaterNationalCity area isdeﬁned as travelto locations withina 50 mileradiusofthe NationalCityCivicCenter.

Section 7 Retirement.

The Employer agrees to enrollthe Employee intothe Public Employees” Retirement System and tomake allthe appropriatecontributionson theEmployee’s behalf,fortherequired Employer share.Employee shallpay theentireemployee share,as determinedby CalPERS.

Section 8 General Business Expenses.

1. Employer agreesto budget forand to pay forprofessionaldues and subscriptions 0f theEmployee necessaryforcontinuationand fullparticipationin national,regional,stateand localassociations,and organizationsnecessaryand desirablefor the Employee’s continued professionalparticipation,growth,and advancement,and forthegood oftheEmployer.

2. Employer agreesto budget forand to pay fortraveland subsistenceexpensesof Employee forprofessionaland ofﬁcialtravel,meetings,and occasionsto adequatelycontinuethe professionaldevelopment of Employee and to pursuenecessaryofﬁcialfunctionsforEmployer, includingbut not limitedto the League of CaliforniaCities,and such othernational,regional, stateand localgovernmentalgroupsand committeesinwhich Employee servicesas a member.

3. Employer alsoagreesto budgetforand to pay fortraveland subsistenceexpenses of Employee for shoxtcourses,institutesand seminarsthatare necessaryfor the Employee’s professionaldevelopment and forthegood oftheEmployer.

4. Employer recognizesthat certainexpenses of a non-personalbut job-related natureare incurredby Employee, and agreesto reimburseor to pay saidgeneralexpenses.The 2 2020 Employment Agreement, Amended 2022
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Finance Directorisauthorizedto disbursesuch moneys upon receiptof duly executedexpense or pettycashvouchers,receipts,statementsorpersonalafﬁdavits.

5. The Employer acknowledges the value of having Employee participateand be directlyinvolvedin localcivicclubsor organizations.Accordingly,Employer shallpay forthe reasonablemembership feesand/ordues to enabletheEmployee to become an activemember in localcivicclubsor organizations.

6. The Employer shallprovide Employee with a computer, software,fax/modem, and cellphone requiredfortheEmployee toperformthejob and tomaintaincommunication.

Section 9 Termination.

For thepurposeof thisAgreement, terminationshalloccurwhen:

1. The majorityof theEmployer’s CityCouncilvotestoterminatetheEmployee ata duly authorizedpublicmeeting.

2. IftheEmployer, citizensor legislatureactsto amend any provisionsofthestateor locallaw pertainingto therole,powers,duties,authority,and responsibilitiesof theEmployee’s positionthatsubstantiallychanges theform of government,theEmployee shallhave therightto declarethatsuch amendments constitutetermination.

3. If the Employer reduces the base salary,compensation or any otherﬁnancial benefitsoftheEmployee, unlessitisappliedinno greaterpercentagethantheaveragereduction of alldepartmentheads,such actionshallconstitutea breach of thisAgreement and Willbe regardedas a termination.

4. IftheEmployee resignsfollowingan offerto acceptresignation,whether formal or informal,by the Employer as representativeof the majorityof the governingbody thatthe Employee resign,thentheEmployee may declarea terminationas of thedateof suggestion.

5. Breach of contractdeclaredby eitherpartywith a 30 day cure periodforeither Employee or Employer. Writtennoticeof a breachof contractshallbe providedinaccordance with theprovisionsof Section20.

Section 1 0 Severance.

The Employee isan at-willemployee, servingat the pleasureof the Employer’s City Council. This Agreement, and the Employee’s employment with the Employer, may be terminatedwith or withoutcause by theEmployer’s CityCouncil.In the eventthe Employee is terminatedforcause,or voluntarilyresignshispositionwith the Employer, then the Employee shallnot be entitledtothepayment of Severanceby theEmployer.

IntheeventtheEmployee isterminatedby theEmployer otherthanforcause,and during such time thatEmployee iswillingand ableto perform hisdutiesunder thisAgreement, then Employer agreesto pay Severanceequalto one-halfyear’sbase salaryatthecurrentrateof pay.

This Severanceshallbe paid in one lump sum unlessotherwiseagreed to by theEmployer and the Employee. This severance shallincludethe Employee’s continued participationin the Employer’s health care plan for a period of six months afterhis separationfrom City Employment. The valueof the City’scontributionto thecostof healthcareshallnotexceed the establishedcontributionforExecutiveemployees as of thedateoftheEmployee’s separation.

In the event of Severance,the Employee shallalsobe compensated forallaccruedsick and vacationleave.

Ifthe Employee isterminatedbecause of a convictionof a felony,then theEmployer is not obligatedto pay Severance under thissection.If the Employee is convictedof a crime involvingan abuse of ofﬁce or position,then regardlessof the term of the contract,ifthe 3 2020 Employment Agreement, Amended 2022
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Employee isterminated,any cash settlement,includingseverance,relatedto the termination receivedby Employee from Employer shallbe fullyreimbursedtotheEmployer.

Section 1 1 Resignation.

In the event thatthe Employee voluntarilyresignshis positionwith the Employer, the Employee shallprovidea minimum of thirty(30)days’noticeunlessthepartiesagree0the1wise.

Section 12 Performance Evaluation.

Employer may annuallyreview the performance of the Employee in the Employee’s anniversary month subjectto a process,form, criteria,and format for the evaluationwhich shall be mutually agreed upon by the Employer and Employee. The process at a minimum may includetheopportunityforbothpartiesto: (I)preparea writtenevaluation,(2)meet and discuss the evaluation,and (3)presenta writtensummary of the evaluationresults.The ﬁnal written evaluationshould be completed and deliveredto the Employee Within thirty(30) days of the evaluationmeeting.

Section 13 Hours of Work.

Itisrecognizedthatthe Employee must devote a greatdealof time outsidethe normal ofﬁce hours on businessfor the Employer, and to that end Employee shallbe allowed to establishan appropriatework schedule,compatibleWith thenormal businesshoursof theCityof NationalCity.

Section 14 Outside Activities.

B. Notice and Consent: Employee shallgivewrittennoticeto CouncilforCouncil’s approvalof any new outsideactivitiesof Employee.

Section 15 Indemnification.

Employee recognizesthe Employer shallhave the rightto compromise and settleany claim or suit.Further,Employer agreesto pay allreasonablelitigationexpenses of Employee throughoutthependency of any litigationto which theEmployee isa party,witnessor advisorto the Employer. Such expense payments shallcontinue beyond Employee’s serviceto the Employer as longas litigationispending.Further,Employer agreesto pay Employee reasonable consultingfeesand travelexpenseswhen Employee servesas a Witness,advisoror consultantto Employer regardingpending litigation.

IfEmployee is convictedof a crime involvingan abuse of his ofﬁce or position,as deﬁned inGovernment Code section53243.4,thenEmployee shallfullyreimburseEmployer for any funds providedforEmployee’s criminaldefense,ifany such funds were providedpursuant to or consistentwith thisSection.This paragraphshallnot be construedas creatingor implying an obligationby Employer toprovidea criminaldefensetoEmployee.

Section 16 Bonding.

Employer shallbearthe fullcostof any fidelityor otherbonds requiredof theEmployee under any law or ordinance.,
Section 17 Other Terms and Conditions of Employment.

A. The Employer shallﬁx any such otherterms and conditionsof employment, as it may determinefrom time to time,relatingto the performanceof the Employee, providedsuch terms and conditionsare not inconsistentwith or in conﬂict with the provisionsof this Agreement, theNationalCityMunicipalCode, or any otherlaw.

B. Except as otherwiseprovideinthisAgreement, theEmployee shallbe entitledto the highestlevelof beneﬁts thatareenjoyed by otherappointedemployees of the Employer as providedintheMunicipalCode or by practice.

Section 18 Notices.

Notice pursuantto thisAgreement shallbe given by depositingin the custody of the United StatesPostalService,postageprepaid,addressedas follows:

EMPLOYER: Mayor EMPLOYEE: CharlesE. BellJr.

CityofNationalCity [At the address of the
1243 NationalCityBoulevard Employee’s principal
NationalCity,CA 91950-4301 residence]
Alternatively,noticerequiredpursuantto thisAgreement may be personallyservedinthe same manner as isapplicableto civiljudicialpractice.Notice shallbe deemed given as of the date of personalserviceor as the date of depositof such writtennoticein the course of transmissionintheUnitedStatesPostalSewice.

Section 19 General Provisions.

A. Integration.This Agreement setsforthand establishestheentireunderstanding between the Employer and the Employee relatingto the employment of the Employee by the 5 2020 Employment Agreement, Amended 2022
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Employer. Any priordiscussionsor representationsby or between the partiesare merged into and renderednulland void by thisAgreement. The partiesby mutual writtenagreement may amend any provisionof thisAgreement duringthelifeof theAgreement. Such amendments shall be incorporatedand made a pan of thisAgreement.

B. Binding Effect. This Agreement shallbe binding on the Employer and the Employee as well as theirheirs,assigns,executors,personalrepresentativesand successorsin interest.

C. Effective Date. This Agreement shallbecome effectiveon October 21, 2020.

D. Severability.The invalidityor partialinvalidityof any portionof thisAgreement Will not effectthe validityof any other provision.In the event thatany provisionof this Agreement isheldto be invalid,theremainingprovisionsshallbe deemed to be infullforceand effectas ifthey have been executedby both partiessubsequentto the expungement or judicial modiﬁcationof theinvalidprovision.

E. Applicable Law. This Agreement shall be governed by and construed in accordancewiththe laws of theStateof Califomia.

F. Construction. The partiesacknowledge and agreethat(1)each partyisof equal bargainingstrength,(2) each partyhas activelyparticipatedin the drafting,preparationand negotiationof thisAgreement, (3)each such partyhas consultedwith or has had theopportunity to consultwith itsown, independentcounseland such otherprofessionaladvisersas such party has deemed appropriate,relativeto any and allmatterscontemplatedunder thisAgreement, (4) each partyand such party’scounseland advisershave reviewed thisAgreement, (5)each party has agreedto enterintothisAgreement followingsuch review and therenderingof such advice, and (6) any rule or constructionto the effectthat ambiguitiesare to be resolved againstthe draftingpartyshallnot apply inthe interpretationof thisAgreement, 01'any portionshereof,or any amendments hereto.

Section 20 Housing Allowance.

The Employer agreesto pay to the Employee, beginningApril2022 and in additionto othersalaryand beneﬁts hereinprovided,a housing allowanceof $1,200 per month While the CityAttorneymaintainsresidencywithintheCityofNationalCity.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on thedateand yearﬁrstabove written.

CITY OF NATIONAL CITY EMPLOYEE
By'
AlejandraSotelo-Solis,Mayor CharlesE. BellJr.

APPROVED AS TO FORM:

JenniferK. Gilman, AssistantCityAttorney
6 2020 Employment Agreement, Amended 2022
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The following page(s) contain the backup material for Agenda Item: Seeking direction from the City Council of the City of National City regarding repeal of Section 16.09 of the National City Municipal Code in its entirety to dissolve the Veterans and Military Families Advisory Committee and establish a Veterans Event Working Group. (Library and Community Services)
Please scroll down to view the backup material.
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CITY OF NATIONAL CITY, CALIFORNIA

COUNCIL AGENDA STATEMENT

ITEM TITLE:

PREPARED BY: DEPARTMENT:

PHONE:

EXPLANATION:

APPROVED BY:

AGENDA ITEM NO. MEETING DATE:

ENVIRONMENTAL REVIEW:

FINANCIAL STATEMENT: APPROVED: Finance
ORDINANCE: INTRODUCTION:

ACCOUNT NO.

STAFF RECOMMENDATION:

BOARD / COMMISSION RECOMMENDATION:

RECOMMENDATION:

ATTACHMENTS:
___________________
________________

March 15, 2022

Seeking direction from the City Council of the City of National City regarding repeal of Section 16.09 of the National City Municipal Code in its entirety to dissolve the Veterans and Military Families Advisory Committee and establish a Veterans Event Working Group.

Library & Community Services
At the September 15, 2020 City Council meeting, Council adopted an ordinance to amend National City Municipal Code 16.09 to reduce and modify membership of the Veterans and Military Families Advisory Committee due to lack of membership and quorum issues. As membership has markedly decreased, staff are recommending the dissolution of the committee and the formation of a Veterans Event Working Group to assist City staff in planning Memorial Day and Veteran’s Day events.

Please see attached staff report for additional information.

Joyce Ryan, Library & Community Services
Director

1. Staff Report with recent attendance

2. Committee Roster

This is not a project under CEQA and is therefore not subject to environmental review. PRC 21065.

FINAL ADOPTION:

APPROVED: ________________ MIS
N/A

Staff recommends repealing Section 16.09 of the National City Municipal Code in its entirety to dissolve the Veterans and Military Families Committee and establish a Veterans Event Working Group.

N/A

619-470-5882

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City Council Staff Report

March 15, 2022

ITEM
Seeking direction from the City Council of the City of National City regarding repeal of Section

16.09 of the National City Municipal Code in its entirety to dissolve the Veterans and Military Families Advisory Committee and establish a Veterans Event Working Group.

BACKGROUND
The ordinance amending Title 16 of the National City Municipal Code adding Chapter 16.09 establishing a Veterans and Military Families Advisory Committee was adopted on February 21, 2017.

Some important areas to highlight in the original ordinance are:
 11 member volunteer committee
 Appointments by the Mayor with confirmation by City Council  Committee members may be residents or non-residents
 Meetings to be held quarterly (at a minimum)
 City staff to provide administrative support to the Committee

Purpose of the Committee
The National City Veterans and Military Families Advisory Committee serves in an advisory capacity to the City Council of the City of National City on matters related to the support of our veterans and military community. The Committee makes recommendations to the City Council with respect to veterans and military service member-related issues, ceremonies, and other activities that occur within National City. Committee meetings provide a forum for discussion of issues relating to veterans and military families. The Committee provides advice and assistance to National City residents regarding resources available for veterans, military personnel, and their families. The Committee acts as a conduit of communication and coordination between the local veteran and military community, and the City of National City.

The Committee's responsibilities may include providing recommendations to the City Council on issues of interest to veterans, military personnel, and their families; providing a forum to discuss and help resolve issues, encouraging and promoting awareness, planning and assisting the City with planning of events honoring the heritage of our veterans and military community to establish and promote positive relations within the City; and serving as a liaison between the City of National City and community partners.

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Staff Report – Seeking Direction from City Council on Dissolution of Veterans and Military Families Committee
March 15, 2022

City staff brought forward an item at the August 18, 2020 City Council meeting to repeal section

16.09 of the National City Municipal Code in its entirety to dissolve the Veterans and Military Families Advisory Committee. This recommendation was brought forth as a result of the February 4, 2020 City Council meeting, where the City Council requested staff bring back a report on the status of the Veterans and Military Families Advisory Committee including the attendance, resident status, and committee roster.

At the August 18, 2020 City Council meeting, Council members voted to reduce the eleven member committee to seven members. Further direction was given regarding the residency requirements. Of the proposed seven voting members, five would be National City residents, and up to two voting members may be non-residents, similar to those requirements of the Community and Police Relations Commission.

Attendance
Following the August 18, 2020 meeting, which reduced the number of members, attendance has been as follows:

October 22, 2020 – Quorum

Present: Alvarado, Aguilar-Perez, Compton, Ferrill, Hernandez

Absent: Telles

January 28, 2021 – Quorum

Present: Alvarado, Aguilar-Perez, Ferrill, Hernandez, Telles

Absent: Compton

April 22, 2021 – Quorum

Present: Alvarado, Ferrill, Hernandez, Owolabi, Telles

Absent: Aguilar-Perez, Compton

July 22, 2021 – Quorum

Present: Alvarado, Aguilar-Perez, Ferrill, Hernandez, Telles

Absent: Compton, Owolabi

Nov. 8, 2021 – Quorum (date changed from Oct. 28, 2021 – lack of quorum for that date)

Present: Alvarado, Aguilar-Perez, Ferrill, Telles

Absent: Hernandez

January 27, 2022 – cancelled due to lack of quorum

Membership is now down to four members, which constitutes quorum; however, with only one person absent, a meeting cannot take place (this occurred at the January 27, 2022 meeting; the October 28, 2021 meeting was rescheduled because of lack of quorum). Although there is one application pending, City staff recommend that this advisory committee be dissolved and that a 437 of 452

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Staff Report – Seeking Direction from City Council on Dissolution of Veterans and Military Families Committee
March 15, 2022

working group be established to assist City staff with planning of events honoring the heritage of our veterans and military community.

Staff contacted the current four committee members on their desire to continue to serve.  3 resident committee members expressed a desire to continue to serve on a task force  1 non-resident committee member expressed a desire to continue to serve on a task force

A Veterans Event Working Group would allow for more flexibility in scheduling, allowing our current membership to participate with planning events which honor the heritage of our veterans and military community. Currently, these events include Memorial Day and Veteran’s Day.

Prior Meeting History
The Mayor and Council interviewed and appointed committee members from July 2017 through July 2018. After all committee members were sworn in by August 2018, staff made contact to coordinate their first meeting. It took many attempts to confirm quorum attendance and the first Veterans and Military Families Advisory Committee meeting was held on February 28, 2019.

By August 2020, the committee had held three regular meetings (February 28, 2019 - April 25, 2019 - July 25, 2019). Four other meetings (March 13, 2019 - May 28, 2019 - October 24, 2019 - January 23, 2020) were either canceled or unable to start the meeting due to a lack of quorum.

The April 23, 2020 and July 23, 2020 meetings were cancelled due to COVID-19.

RECOMMENDATION
Staff recommends repealing Section 16.09 of the National City Municipal Code in its entirety to dissolve the Veterans and Military Families Advisory Committee and establish a Veterans Event Working Group.

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Veterans and Military Families Advisory Committee
Committee Members

1. Jhoana Alvarado*

2. Shirley Ferrill*

3. Maria Elena Hernandez*

4. Armando Telles

*resident

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The following page(s) contain the backup material for Agenda Item: Fiscal Year 2021 4th Quarter General Fund Budget Review. (Finance)
Please scroll down to view the backup material.
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CITY OF NATIONAL CITY, CALIFORNIA

COUNCIL AGENDA STATEMENT
AGENDA ITEM NO.: MEETING DATE: March 15, 2022
ITEM TITLE:

Staff Report: Fiscal Year 2021 4th Quarter General Fund Budget Review.

PREPARED BY:Paul Valadez, Budget Manager
PHONE: 619-336-4332
EXPLANATION:

See attached staff report.

FINANCIAL STATEMENT:

ACCOUNT NO.

NA
ENVIRONMENTAL REVIEW:

DEPARTMENT: Fin
0< /;;
APPROVED BY: 7
APPROVED: _________ F INANCE
APPROVED: MIS
This is not a project and, therefore, not subject to environmental review.

ORDINANCE: INTRODUCTION D FINAL ADOPTION D
STAFF RECOMMENDATION:

Accept the staff report.

BOARD/ COMMISSION RECOMMENDATION:

NA
ATTACHMENTS:

Staff report
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City Council Staff Report

March 15, 2021

ITEM

Staff Report: Fiscal Year 2021 Budget Review

BACKGROUND

As part of the City of National City’s Strategic Plan objective to provide consistent financial reports, this staff report to City Council presents an update on the City’s financial operations for fiscal year 2021.

DISCUSSION

Budgets are projections based on known and anticipated future revenues and expenditures.

Throughout the year, staff monitor and analyze revenues and expenditures, develop projections, and provide periodic financial reports to the City Council, City Manager, and department directors. The totals presented herein for fiscal year 2021 are a summary of the actual revenues and expenditures, and their impact on fund balance compared to the corresponding budgeted amounts for the year.

Fiscal Year 2021

The fiscal year 2021 adopted budget authorized a $6.7 million use of general fund unassigned fund balance. Although an overall use of $6.7 million in unassigned fund balance was authorized, a combination of overall cost savings and unanticipated increase in revenues increased the overall fund balance by $2.4 million. However, the implementation of the City’s new reserve policy along with adjustments to other fund balance categories resulted in a net decrease of $1.9 million to unassigned fund balance. The variances between budgeted and actual revenues and expenditures and the impacts on fund balance are summarized below.

Revenues

The City receives revenues from various sources, some of which, such as taxes and fees, provide unrestricted cash that may be used at the City’s discretion. Other revenues are reserved for specified purposes, for example, grant funds received for capital projects. Actual general fund revenues, including transfers from other funds, for fiscal year 2021, listed by source in the table below, were more than their combined budgeted total by approximately $9 million.

Fiscal Year-End Revenue Totals

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Staff Report – Fiscal Year 2021 Budget Review
March 15, 2021

Revenue Source FY21 Actual
FY21 Adjusted
Budget1 Variance
Sales & Use Tax $ 22,139,734 $ 17,281,000 $ 4,858,734
District Transactions & Use Tax 13,118,582 11,293,000 1,825,582 Property Tax2 2,290,019 2,436,700 (146,681)
Property Tax in Lieu of VLF 7,634,768 7,400,000 234,768 Other Revenues 20,235,374 18,003,981 2,231,393
Transfers In 5,500 5,500 0
Total $ 65,423,977 $ 56,420,181 $ 9,003,796
1 adopted budget, plus budget adjustments
2 reflects reduction for property tax allocation to the Library and Parks Maintenance funds

Sales & use tax and district transactions & use tax revenues for fiscal year 2021 came roaring back after hitting a low point in the last quarter of fiscal year 2020 (April – June 2020).

Compared to the prior year’s under budget performance of $30.2 million of actual revenue, fiscal year 2021 saw a combined total of $35.3 million in revenue from sales & use taxes and the district transactions & use taxes. The point-of sales activity rebound was driven by new vehicle sales, family apparel, department stores, quick service and casual dining, higher gas prices, and building-construction activity. The shift towards online spending continued to grow from the beginning of the pandemic. Over the last two years, revenue from online activity has grown from 15% to 22% of total National City sales & use tax revenue. In fiscal year 2021, actual sales & use tax and district transactions & use tax revenue exceeded budget expectations by $6.7 million.

The budget was adopted during a time when the City was experiencing significant decreases to sales tax revenue and many unknowns about the economic impact and potential recovery from the pandemic. Thankfully, in hindsight we can now see that April-June 2020 was the low point for the City’s revenue and the recovery began quickly and rebounded sharply.

Property Tax and Property tax in lieu of VLF (vehicle license fee) were similar to what was budgeted, with a net impact of $88,000 over budget between the two revenue sources. Both Property Tax and Property tax in lieu of VLF have grown year over year and are projected to continue to steadily grow into the future as property values continue to rise.

The “Other Revenues” category includes various accounts related to ongoing City operations, one-time events, and capital projects reimbursements. Revenues in this category exceeded the budget by $2.2 million primarily due to the following:
• Investment related earnings exceeded budget by approximately $1.7 million. Earnings in the Section 115 trusts for pension and other post-employment benefits (OPEB) accounted for $1.3 million of this amount.
• $400k over budget on Transient Occupancy Tax (TOT) revenue. The adopted budget overestimated the impact of COVID-19 pandemic on the City’s hotels. National City businesses in this category were resilient during the pandemic. Revenue actuals were still down 10% from pre-pandemic revenue from this source.

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Staff Report – Fiscal Year 2021 Budget Review
March 15, 2021
• State and County grant revenue exceeded the budget by $553,000 for grants that were unanticipated when the budget was created.
• Refuse franchise revenue exceeded the budget by $252,000.

E
xpenditures
A
s of June 31, 2021, General Fund expenditures, including transfers to other funds, totaled $63.0 million, $3.5 million less than the adjusted budget of $66.5 million. Expenditure variances are summarized by category in the table below.

F
Y 2021 Year-End Expenditure Totals
Expenditure Type FY21 Actual
FY21 Adjusted
Budget1 Variance
Personnel Services $ 42,054,142 $ 41,689,691 $ 364,451 Maintenance & Operations 7,178,208 7,927,349 (749,141)
Capital Projects 3,713,466 6,691,874 (2,978,408)
Internal Service Charges 7,717,869 7,824,869 (107,000)
Transfers Out 2,368,520 2,380,369 (11,849)
Total $ 63,032,205 $ 66,514,152 $(3,481,947)
1 adopted budget total, plus budget amendments, encumbrances, & capital projects appropriations carried forward from previous fiscal year(s) P
ersonnel Services costs were $364,451 over budget due to overages in Public Safety overtime costs of $206,000 (net full-time salary savings due to vacancies being covered), in Allowances & Stipends of $89,000 and in Medicare of $69,000 (related to higher overtime).

M
aintenance & Operations (“M&O”) savings of $749,141 were realized across various accounts, but particularly in Contract Services ($501,000); Training, Travel, & Subsistence ($143,000); and R&M Traffic Control Devices ($57,000).

T
he capital projects category had a variance of $3 million between the budget and actuals. This $3 million does not represent savings. Rather, it is unspent monies on specifically authorized capital improvement projects that are still ongoing. The unspent appropriations were carried over to the fiscal year 2022 budget.

N
et Impact on Overall Fund Balance
T
he table below combines the above revenue and expenditure tables to compare the adjusted budget’s impact on fund balance to the actual impact on fund balance. Actual fiscal year 2021 revenues, expenditures, and transfers resulted in an estimated increase of $2.4 million in the overall fund balance of the General Fund, as compared to the adjusted budgeted usage of $10.1 3 444 of 452

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Staff Report – Fiscal Year 2021 Budget Review
March 15, 2021

million (primarily a combination of the authorized use of $6.7 million plus carry-overs from fiscal year 2020). This variance is primarily due to the unspent capital projects appropriations and operational savings discussed above. As discussed further below, fund balance is divided into five categories, non-spendable, restricted, committed, assigned, and unassigned.

Fund Balance Change – Actual vs Budget (Estimated)

Actual

Adjusted

Variance
Revenues 65,418,477 56,414,681 $9,003,796
Transfers In 5,500 5,500 -
Total Revenues & Transfers In 65,423,977 56,420,181 9,003,796

Expenditures $60,663,685 $64,133,783 ($3,470,098)
Transfers Out 2,368,520 2,380,369 (11,849)
Total Expenditures & Transfers Out $63,032,205 $66,514,152 ($3,481,947)

Fund Balance Gain/(Usage) $2,391,772 ($10,093,971) $12,485,743

Beginning Fund Balance $48,928,396 $48,928,396

Ending Fund Balance $51,320,168 $38,834,425

In accordance with Governmental Accounting Standards Board (“GASB”) Statement Number 54, fund balance is classified into the aforementioned categories based primarily on the extent to which its use of resources is constrained. The table below reflects the estimated changes in each category of fund balance within the General Fund from June 30, 2020 to June 30, 2021. The balances are dependent not only upon the results of operations, i.e., revenues and expenditures, but also upon changes in such things as liabilities accrued for employee benefits and unspent appropriations carried over to the succeeding fiscal year.

Components of Fund Balance (Estimated)

FY 20 FY 21 Change
Non-spendable $3,926,499 $3,964,434 $37,935
Restricted $10,092,890 $10,833,351 $740,461
Committed $11,485,066 $14,945,000 $3,459,934
Assigned $7,129,273 $7,193,969

$64,696

Unassigned $16,294,668 $14,383,414

$(1,911,254)

Total $48,928,396 $51,298,153 $2,369,757

Summary of fund balance changes by category:
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Staff Report – Fiscal Year 2021 Budget Review
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Non-spendable – fund balance representing assets which are not in spendable form. This is primarily land held for resale.

Restricted – category with spending constraints stipulated either “externally” by the provider of the assets or by law. For the City, the primary components of this category are the Section 115 trusts for pension and other post-employment benefit obligations (OPEB). Previously this category also included a reserve for the subsequent fiscal year’s debt service requirement. This reserve, which was in the amount of $535,169 as of June 30, 2020, was eliminated with the adoption of the May 4, 2021 revisions to City Council Policy #201 – Maintenance of Reserves and subsequent City Council action on June 15, 2021. The increase of $740,361 in the restricted category is the net of a gain in the combined pension and OPEB trusts of $1.275 million and the removal of the $.535 million debt service reserve.

Committed – total of resources which have internally imposed restrictions mandated by formal action of the City Council. This category comprises the City’s Economic Contingency Reserve, which was increased by City Council action on June 15, 2021 by $3.1 million to $12.2 million, and the Facilities Maintenance Reserve, which was increased as part of that same action by $345,000 to $2.7 million.

Assigned – assets constrained by the Council’s intent that they be used for specific purposes but not meeting the more strict criteria for classification as restricted or committed. The primary components are amounts set aside for compensated absences and those carried over for capital projects and open purchase orders.

Unassigned – total of spendable amounts not allocated to the other fund balance categories and which is available for use at Council’s discretion. Unassigned fund balance shows a decrease of $1.9 million to $14.4 million. This decrease should be viewed in the context of the adjustments made to the debt service, economic contingency, and facilities maintenance reserves described above, which combined totaled $2.9 million. Absent those adjustments, the unassigned fund balance would have increased by $1.0 million. City Council Policy #201 specifies maintaining the unassigned fund balance at a target level of 10% of budgeted operating expenditures. The adopted budget for fiscal year 2022 is $60.5 million, which would indicate a target level of $6.1 million. This amount compares favorably to the $14.4 million available. Should it be necessary to use the $3.8 million of unassigned fund balance that was authorized in the fiscal year 2022 budget, there would still be $10.6 million left at the end of the year.

Conclusion

The City’s General Fund experienced an increase in fund balance in fiscal year 2021 that allowed the City to meet or exceed targets for key reserves. The greatest contributors to the increase in fund balance were better than budgeted revenues due to an accelerated recovery from the COVID-19 pandemic coupled with operational savings. Per City Council Policy #201, the status of these reserves will be reviewed and presented to the City Council as part of the budget development process for fiscal year 2023.
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March 15, 2021

RECOMMENDATIONS

Accept and file this staff report.
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The following page(s) contain the backup material for Agenda Item: City Manager Report. (City Manager)
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Item # ___
03/15/22
City Manager Report

(City Manager)
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The following page(s) contain the backup material for Agenda Item: City Council Policy #105 request to agendize at a future meeting staff coming back with an updated policy concerning City Council Meetings and how meetings are conducted – Councilmember Mona Rios.

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Item # ___
03/15/22
City Council Policy #105 request to agendize at a future meeting staff coming back with an updated policy
concerning City Council Meetings and how meetings are
conducted – Councilmember Mona Rios
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CITY COUNCIL POLICY

CITY OF NATIONAL CITY

TITLE: Request by Member ofCityCounciltoPlacean Itemon POLICY # 106 a CityCouncil Agenda

ADOPTED: March 12, 1985 AMENDED: October 5,2021

CITY COUNCIL ITEM REQUEST
The CityCouncilItemRequest Form isformembers oftheCityCouncilto submitwrittenrequeststothe CityManager’s Ofﬁce forInclusion0tan itemon a futureCityCouncilMeeting Agenda. At the meeting where the initialwrittenrequest lsheard. discussionshould be limitedto whether the item should be added to an agenda and a date, not the meritof the item‘ A majorityvote ofthe CityCouncil isrequiredforthe item tobe added to a futureCityCouncil Meeting Agenda toraction.

RequestingMemberofCityCouncil:Mona Rios
Today's Date: MarCh 8' 2022
Isthismatter considered Time-Sensitiveby another entitydeadline? Yes

WRITTEN REQUEST
I,Mona Rios ,herebyrequestthatthefollowingitembe placedon theCityof NationalCity~ CityCouncll meeting agenda forconsideration.

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National City City CouncilMarch 15, 2022

National City City Council
March 15, 2022