March 22, 2022
Agenda Item No. 17
TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
Barbara J. Salvini, Human Resources Director - 949-644-3300, [email protected] PREPARED BY:
Barbara J. Salvini, Human Resources Director, [email protected] PHONE:
949-644-3300
TITLE:
Resolution No. 2022-21: Seventh Amended and Restated Employment Agreement for City Attorney ABSTRACT:
Pursuant to the City Charter of Newport Beach, Article VI, the City Attorney is appointed by, and serves at the pleasure of, the City Council. The terms and conditions of the current City Attorney’s employment are defined by his Sixth Amended and Restated Employment Agreement. From time to time, the City Council and incumbents may renegotiate the employment terms, including adjustments to compensation and/or other benefits. During the City Council’s Closed Sessions on February 22, 2022, and March 8, 2022, the City Council discussed the terms of the City Attorney’s agreement. A Seventh Amended and Restated Employment Agreement (Employment Agreement) for the City Attorney is presented for the City Council’s consideration and approval.
RECOMMENDATION:
Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; Approve and authorize the Mayor to execute a Seventh Amended and Restated Employment Agreement between the City of Newport Beach and City Attorney Aaron C. Harp, subject to the terms and conditions approved by the City Council; Adopt Resolution No. 2022-21, A Resolution of the City Council of the City of Newport Beach, California, Modifying the Salary Range for the City Attorney; and Approve Budget Amendment No. 22-047 appropriating $5,303 from unappropriated General Fund balance to various salary and benefit accounts to implement the terms of the Agreement for the remainder of FY 2021-22.
DISCUSSION:
City Attorney Aaron C. Harp was appointed as City Attorney for the City of Newport Beach (City) on September 6, 2011. His current employment terms are outlined in a Sixth Amended and Restated Employment Agreement which was approved by the City Council on January 26, 2021. The agreement provided for an initial annual base pay adjustment of 2.058%; base pay adjustments beginning the pay period which included January 1, 2022, and annually thereafter equal to the lesser of 2% or the “Cost of Living” as defined by Government Code Section 3511.1; a one-time, lump sum bonus of $588; and bi-weekly City-paid contributions of $200 to his City-sponsored deferred compensation account. The proposed revisions to the Seventh Amended and Restated Employment Agreement (Attachment A) provide for the following:
Employment agreement through December 30, 2028 which is designed to ensure a smooth transition of Council appointees over a period of time; Compensation
A merit adjustment of 5% in the first year, and cost-of-living adjustments tied to those received by executive management employees beginning on January 1, 2023, and each January thereafter, for the remaining term of the agreement.
Deferred Compensation
The proposed Seventh Amended and Restated Employment Agreement modifies the existing deferred compensation benefit by eliminating the $200 bi-weekly City-paid contribution to the City Attorney’s 457 deferred compensation account and modifying the existing 401(a) City contribution to provide for an annual contribution of $14,500 for calendar year 2022 with $2,500 increases in January of each year for the remaining term of the Employment Agreement.
Severance
If terminated without cause, the City shall provide a cash settlement equal to the City Attorney’s monthly salary, multiplied by the number of months left on the unexpired term of the Employment Agreement, subject to certain conditions.
Certain other benefits for the City Attorney such as cafeteria allowance, paid leave, retirement and supplemental retirement plans, disability and life insurance benefits are tied to the terms and conditions outlined in the City’s Key and Management Compensation Plan. Except as referenced above and specifically identified in the Seventh Amended and Restated Employment Agreement, the language contained in the City Attorney’s proposed Employment Agreement does not alter any of the previously established benefit relationships with the Key and Management Compensation Plan.
Attached for the City Council’s consideration is the Seventh Amended and Restated Employment Agreement for the City Attorney (Attachment A). If approved by the City Council, Human Resources and Finance staff will work together to implement the terms. Consistent with the City Council’s stated goal of transparency, the employment agreement also will be published on the City’s website and readily available for public review.
In order to implement the proposed salary adjustment for the City Attorney, the salary range needs to increase to provide sufficient movement for the incumbent. The proposed resolution (Attachment D, Resolution No. 2022-21), provides the necessary increase in the salary range for City Attorney. If adopted, the annual salary range for City Attorney will be $180,301 to $270,428.
FISCAL IMPACT:
The detailed costing information included in Attachment C is provided on a calendar year basis. Because the effective date of the Agreement is mid-fiscal year, the cost to implement the terms of the Agreement for FY 2021-22 is less than the $18,281 shown in Attachment C.
Additionally, certain pension and compensated absences costs are long term in nature and will not impact the current fiscal year’s budget. Should the City Council approve the Agreement, the budgetary impact is therefore reduced to $5,303 in FY 2021-22.
Sufficient projected unappropriated General Fund balance is available to fund the required appropriations. Budget Amendment No. 22-047 appropriating $5,303 is included as Attachment B for your review.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A – Seventh Amended and Restated Employment Agreement Attachment B – Budget Amendment No. 22-047
Attachment C – Estimate of Costs Associated with the Seventh Amended and Restated Employment Agreement for the City Attorney Attachment D – Resolution No. 2022-21
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Seventh Amended and Restated Employment Agreement for City Attorney March 22, 2022
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