CITY OF SEBASTOPOL
CITY COUNCIL
AGENDA ITEM
Meeting Date: April 4, 2023
To: Honorable Mayor and City Councilmembers
From: Ad Hoc Committee for City Manager and or City Attorney Recruitment Human Resources Consultant
Subject: Options for Consideration for City Manager and City Attorney Recruitment Recommendation: It is recommended that the Council: Receive the report, take public comment, move further discussion of options to a closed session meeting and approve Obtaining Request for Proposals (RFP) Executive Firm for City Manager recruitment and Request for Qualifications (RFQ) for City Attorney Services Funding: Currently Budgeted: ______ Yes ____X*_____ No _____ N/A Net General Fund Cost: ______
Account Code/Costs authorized in City Approved Budget (if applicable) AK (verified by Administrative Services Department) INTRODUCTION:
This item is to request that the City Council Receive the report, take public comment, and approve obtaining Request for Proposals for Executive Firm for City Manager Recruitment and Request for Qualifications for City Attorney Services. Staff has scheduled closed session meetings for further discussion of options. It should be noted that any discussion of the options for Closed Session topics cannot be conducted in Open Session but will need to be discussed in a City Council Closed Session Meeting. Tonight’s item is only for Council to Receive the options, take public comment, and approve Obtaining Request for Proposals for Executive Firm and Request for Qualifications for City Attorney Services.
INFORMATION ON DISCUSSION OF TONIGHT’S ITEM/PUBLIC COMMENT/AND CLOSED SESSION
REQUIREMENTS
REQUIREMENT FOR CLOSED SESSION: The Brown Act allows a legislative body to convene a closed session in order to meet privately with its advisors on specifically enumerated topics. The most common reason for a closed session is to consider personnel-related issues to consider employment, promotion, discipline, and/or performance evaluation of employees. Further, legislative bodies are permitted to meet in closed session to give direction to their labor negotiators on matters related to contract negotiations. As the options for the future employment of a City Manager relate to current employee related matters and future contract negotiations, the Council will not be able to discuss certain items in the Open Session of a Council meeting and will need to conduct a closed session. This protects Employees and City by avoiding the revealing of confidential information that may, in specified circumstances, prejudice the legal or negotiating position of the agency or compromise the privacy interests of employees. As it relates to applicants for a position, it can create issues for a candidate at their current employer if it becomes known that the candidate is interested in alternative employment.
For these reasons, the Brown Act allows for discussion of confidential information that is specifically related to the reason for the closed session and cannot be discussed during the Open session of the meeting. The Council will report out any final action taken in closed session.
The legislative body must report in open session certain actions taken in closed session, and the vote of each member, including Action to appoint, employ, dismiss, release, accept resignation of, or affect the status of any employee.
However, a report out may be deferred under certain circumstances, usually because it is contingent upon approval by another party.
No person may disclose confidential information that has been acquired by being present in an authorized closed session to unauthorized persons,
The Brown Act is clear that public employment personnel matters shall be discussed in closed session.
The City and Council appreciate the public’s questions and comments related to this item. Public comments related to this item received tonight will inform Council deliberation in future Council sessions both closed and open. The Council welcomes questions and comments related to the employment of a City Manager (including comments related to salary, benefits, and other terms and conditions of employment). However, tonight, Council members will refrain from answering any questions posed by members of the public in open session.
BACKGROUND
After 36 years as the City Attorney and 12 years as City Manager/City Attorney for the City of Sebastopol, Larry McLaughlin has announced that he is retiring. In late October, City Manager / City Attorney Larry McLaughlin publicly announced his pending retirement and to fill the position, the Council began embarking on the process of discerning a path forward and with this item has undertaken or is being asked to undertake the following:
1. Created an Ad Hoc Committee
2. Ad Hoc worked with HR consultant and City staff to discuss next step in the process to fill these critical roles which was to create this agenda item for the Council to receive the options and timelines to fill these critical roles.
3. Receive agenda item tonight on options for Filling Positions
4. Discussion of Request for Proposals for Executive Firm for City Manager Recruitment and Request for Qualifications for City Attorney
5. Take options into a closed session meeting for discussion
6. Take actions necessary in future meetings to acquire staff or services to meet the obligations of the City Manager and City Attorney roles.
DISCUSSION:
While there exists a handful of City Manager / City Attorney combined roles in California, the separation of the roles is most common and the pool of candidates for City Manager and candidates and firms for City Attorney is much larger.
The current employee's resignation in combination with a clause in the agreement between the Employee and the City dating back to 2012 when the employee as City Attorney was also first engaged in the City Manager’s role, and providing the right of the Employee to return to City Attorney, effectively separates the roles. Should the City Council or Employee decide not to continue his employment in the role of City Attorney, the City Council must decide whether to seek candidates for a combined or separate set of roles and the process in which roles will be filled.
This report will provide options, timelines and estimates of costs related to various options.
NOTE: Most if not all of the options below will require a closed session meeting as many of the options presented relate to current and future employment contracts. The City Council will only receive the options tonight and shall conduct a future closed session meeting to discuss these options.
The only actions the Council can take tonight is to receive the options, take public comment, and approve direction to staff for Request for Proposals for Executive Firm for City Manager Recruitment and Request for Qualifications for City Attorney Services.
KEY CONSIDERATIONS /OPTIONS FOR COUNCIL DISCUSSION:
As shown in the diagram below, the City has several key options for consideration in the wake of employee’s notice to retire from his role as City Manager. The options for consideration for a future City Council Closed Session are shown in the chart as well as explained below.
City Manager Notice, Agreement, Processes
Acknowledge and
Accept verbal
resignation
Address May 25 2012
agreement language
Consideration of process
for Interim
Interim Selection
Solicit Proposals from
search firms
Reach out internally for
interest for interim role
Review and Rank
Proposals
Presentations to Council
for selection
Filling Roles
Discuss combined vs
separate roles and
determine course
forward.
Legal Consultants
Begin selection Process
Develop materials
Marketing and
advertising
Selection Activities
Appointment or
engagement
Key Consideration/Option Acknowledge and accept Mr. McLaughlin’s resignation from joint role addressing his exemplary service
Time Line: City Council to discuss with employee (This is anticipated to be discussed within 30 days) Key Consideration/Option Consideration of how to address the existing May 25, 2012 City Attorney / Interim City Manager employment agreement language in relation to returning to City Attorney position
Time Line: City Council to discuss in Closed Session (This is anticipated to be discussed within 30 days)
Key Consideration/Option Consideration of Extension of Contract for Current City Manager / City Attorney (Consideration of Extension of current employment of City Manager/City Attorney until such time that a City Manager Is Hired)
Time Line: City Council to discuss in Closed Session (This is anticipated to be discussed within 30 days)
Key Consideration/Option Consideration of process for selection of interim assistance (whether internal or external) of either City Manager and/or City Attorney.
Time Line: City Council to discuss in Closed Session (This is anticipated to be discussed within 30 days)
The process for filling the role for interim could take one to two months or longer. A common search has two main phases:
• Month 1: Solicit Interest and interview in closed session qualified employees • Month 2: Announce selection in a regular Council meeting and transition and backfill activities
Fiscal Impacts: For an Internal Interim: City employees who are temporarily promoted receive between 5% and 10% above their current regular hourly pay or base salary (depending on their level in the organization and the level of the position they are filling). Over a period of six months, the cost to the City is estimated to be between $9,900 and $13,200 per employee temporarily promoted or $1,650 - $2,200 a month per temporarily promoted employee.
Or
City Manager Notice, Agreement, Processes
Acknowledge and Accept verbal resignation
Address May 25 2012 agreement language
Consideration of process for Interim
Consideration of External Interim: This process could also take one to three months or longer as a similar process would be used.
• Month 1: Establishment of profile
• Month 2: Marketing and selection activities in closed session • Month 2 or 3: Reference and Background
• Month 3: Appointment
*If the interim selected is a retired annuitant already working with the City, a reference and background is not required, and the timeline could be shortened.
Fiscal Impacts: An external interim candidate typically earns the top step of the current manager’s salary range of a retired annuitant, which is $89.92 for all hours worked. Candidates who are not CalPERS retired annuitants often want prevailing wages with no benefits which can range from $90 - $130 per hour with no benefits or overtime. Reasonable expenses are usually reimbursable in both cases. If we assume a 55-hour work week, a retired annuitant will run $21,431 per month or $128,586 over six months, and a non-retired annuitant will run between $21,450 and $30,983 per month and between $128,700 and $185,900 over six months.
Key Consideration/Option Consideration of Process(es) for filling the vacated role(s).
Time Line: The process for filling the role of a city executive normally takes a minimum of four to six months and could take longer.
ACTIONS FOR CONSIDERATION TONIGHT: Actions requested tonight will be done concurrently while closed session meetings are being conducted:
EXECUTIVE SEARCH CITY MANAGER:
Action 1:
Direct City staff to work with the City’s Human Resources Advisor to solicit proposals, conduct a preliminary assessment of proposals, and return to Council with a matrix to show proposal features and Interim Selection
Solicit Proposals from search
firms
Reach out internally for interest
for interim role
Review and Rank Proposals
Presentations to Council for
selection
Filling Roles
Discuss combined vs separate
roles and determine course
forward.
ranking. The top 3-4 firms will be invited to provide 15-minute presentations of their services during the Council meeting. Once selected staff will work with the successful firm to create an agreement and staff report for approval at the next Council meeting.
Timeline: Typically 1 to 2 months. 1 week to prepare and send out proposal requests, 2 weeks for proposals to be submitted, and 1 week to assess them. Council agenda items will be set up in advance to expedite the process. Then .5 to 1 month for Council meetings if at a regular session. This item could be heard and approved on consent and at any special meeting.
Fiscal Impact: The fiscal impact for the search and engagement of an existing employee or retired annuitant would be the hours required by the City’s Human Resource Consultant which would be less than $2,500 over the term of the agreement. A formal Executive Recruitment for City Manager for other than existing employee or retired annuitant would be between $35,000 to $50,000 for the consultant.
This amount does not include recruitment costs for City Attorney services if the Council chooses that direction in the future.
Time Line: A Common Executive Search Process: Search processes may have six to eight major phases, including:
• Month 1: Stakeholder Engagement Meetings
• Month 2: Profile and Materials Development
• Month 3 to 4 Outreach and Marketing - Search for Candidates • Month 5 Preliminary Screening – Final Candidate List
• Month 5 to 6: Selection Processes
• Month 6 to 7: Reference, Background, and Appointment
About Executive Search Timelines
The timeline for an executive search depends on the number and method of processes developed under steps one, two, and five and the available pool of qualified candidates. Periodically, recruitment will not result in a successful candidate. In those cases, the search firm will often reopen the search process or begin a new visioning and search process, expand the geographical reach for candidates, or may suggest other alternatives.
Legal Consultants
Begin selection Process
Develop materials
Marketing and advertising
Selection Activities
Appointment or engagement
Action 2:
Initiate an immediate RFQ for interim City Attorney services. The RFQ will include outside counsel currently engaged with the City as well as other options. Once proposals are ranked, staff will return to Council with the results and a recommendation. Council will authorize and approve the engagement in a public Council meeting.
Timeline: 2-3 months. This process will include the development of a scope of work, reaching out to known firms to request qualifications and fee information, review of the responses, creation of an agenda item, and placement on a coming City Council agenda.
Please note: Both compensations for each recruitment will be discussed in an Open Session City Council Meeting and will need to be decided prior to recruitment.
FOR INFORMATION ONLY: Tables have been provided relative to the current market. This is informational only and not the proposed compensation for these positions and is not for discussion tonight.
Sebastopol’s City Manager Salary is about 17% behind the market and results in a difference between the current salary and a competitive market salary is $3,167 a month or $38,000 a year which approximates $58,916 with benefits as shown in the chart below. The pensionable benefitted cost of the salary increase may be mitigated by providing some of the salary or increase in non-pensionable vehicles such as Retirement Health or Deferred Compensation arrangements.
The current City of Sebastopol City Manager/City Attorney Salary reflects ¾ time allocated for City Manager and ¼ time allocated for City Attorney.
Filling the City Attorney Role will also increase costs to the City. As a separate role, City Attorneys in Sonoma County have mostly been engaged under contract allowing municipalities to utilize the full resources of a firm rather than just one individual employee. This also removes the pension and other benefit costs associated with an employee.
Hiring a City Attorney through a firm under contract may require around $22,000 - $24,000 a month and about $260,000 annually. In contrast, a City Attorney who is an employee on staff (similar to the City of Santa Rosa), is salaried at a top step of $248,136 and with benefits would approach $385,000 as a City employee. The advantage of an hourly rate from a firm includes access to experts in other bodies of law and lower costs in months with fewer meetings and fewer legal matters. Conversely, costs will go up in times of high legal need. The chart below reflects the budgeted expenditures for City Attorneys under contract and the salary of Sebastopol, Santa Rosa, and Petaluma's attorneys. *Rohnert Park 23-24 budget shows $996,267 for all attorney’s fees and we were not able to reduce it to sole City Attorney role costs. Therefore they are not included in this comp table.
Average Attorney Fees for the City of Sebastopol:
For FY 21, 22 and current year to date, listed below are attorney fees for informational purposes only.
FY21 = $258,823.68
FY22 = $400,513.03
FY23 YTD thru Feb activities = $327,674.40
This information is not for discussion tonight, but is for information/background to the Council and community as the City Council is considering approval of a RFQ for City Attorney services. Legal fees vary each year for all cities as they are dependent upon the number of lawsuits filed, grievances, arbitration, etc. As noted above, the compensation for Attorney services will be discussed at an Open City Council Meeting once the RFQs have been received.
CITY COUNCIL AND/OR GENERAL PLAN GOALS
Goal 5: Provide Open and Responsive Municipal Government Leadership
5.3.3. Encourage and increase public awareness of City Policies, decisions, programs, and all public processes and meetings, by investigating effective methods of communication and obtaining feedback from the community.
Goal 6: Maintain a highly qualified Staff that works to provide services to serve and protect the residents, visitors, and businesses of this community.
Action CHW 5c: Practice an open-door policy in City programs, and actively engage and encourage participation from all individuals regardless of ethnicity, race, religion, class, disability, sexual orientation, and gender.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment, according to CEQA Guideline section 15378.
PUBLIC COMMENT:
As of the writing of this staff report, the City has not received any public comment. However, if staff receives public comment from interested parties following the publication and distribution of this staff report such comments will be provided to the City Council as supplemental materials before or at the meeting. In addition, public comments may be offered during the public comment portion of the consent calendar.
PUBLIC NOTICE:
This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours before the scheduled meeting date.
FISCAL IMPACT:
As shown in each of the sections above, the estimated fiscal impacts of the various key choices are shown in the table below:
RECOMMENDATION:
That the City Council Receive the report, take public comment, move further discussion of options to a closed session meeting, and:
1. approve Obtaining Request for Proposals for Executive Firm for City Manager Recruitment; and
2. approve Request for Qualifications for City Attorney Services It should be noted that any discussion of the options cannot be conducted in Open Session but will need to be discussed in a City Council Closed Session Meeting. Tonight’s item is receipt of options only as well as approval to obtain RFPs and RFQs.
*Staff will return to a future council meeting with a request for budget amendment for Executive Firm RFP once the City receives responses to the Request for Proposals for City Manager Recruitment. As noted above, it is anticipated that the costs could range from $35,000 to $50,000 based on current Request for Proposals conducted by other Cities.
ATTACHMENT:
Options Table. This Table Contains Options but May Not Be All Inclusive. Discussion of the options cannot be conducted in Open Session but will need to be discussed in a City Council Closed Session Meeting.
A presentation will be provided at the City Council Meeting.
Options Status of
Roles
City Manager City Attorney Incumbent Additional Information ATTACHMENT 1 A variety of options follow in this table. This is not a complete list and each option may have several additional steps required to fulfill it that may not be reflected here.
Option 1 Recruit/appoint
combined role
NOTE: Interim may be
required, can be staff
or outside
NOTE: Contract interim
may be required
Retain through
recruitment if
possible as CITY
ATTORNEY or in
both roles
Hire as Status Quo (City Manager/City
Attorney): The staffing study
recommends separating the functions
of the City Manager and City Attorney
Option 2 Separate roles Recruit for City
Manager
NOTE: Interim may be
required, can be staff
or outside
Recruit for City Attorney
NOTE: Contract interim
may be required
Retain through
recruitment if
possible as CITY
ATTORNEY or in
both roles
Separate Positions: Hire A City
Manager and a City Attorney (City
Attorney to be on site City employee
position)
Option 3 Separate Roles Recruit for City
Manager
NOTE: Interim may be
required, can be staff
or outside
RFP or RFQ process for
City Attorney.
NOTE: Contract interim
may be required
Retain through
recruitment if
possible as CITY
ATTORNEY or in
both roles
Separate Positions: Hire A City
Manager and Conduct Request for
Proposals for City Attorney Functions
(Whether a Consultant/Attorney Firm –
Not City Employee)
Option 4 Separate Roles Recruit for City
Manager
NOTE: Interim may be
required, can be staff
or outside
Negotiate agreement
with incumbent for
continued City Attorney
services
Note: current
employment agreement
provides that CITY
MANAGER/CITY
ATTORNEY returns to
CITY ATTORNEY when no
longer CITY MANAGER
Retain
incumbent
(current
employee) in
combined role
through
recruitment if
possible
Separate Positions: Hire A City
Manager and Retain Current City
Attorney Per Employee Contract.
Employment contract states that if
Employee is no longer the City
Manager, employee would remain as
City Attorney.
Option 5 Separate Roles Seek and Appoint
Interim City Manager
(staff or external)
Take time in recruiting
for permanent Role
Recruit for City Attorney
Note: Contract interim
may be required
Retain
incumbent in
combined role
through
Hire Interim City Manager (Either
conducting Internal and/or External
Recruitment or Appoint City Employee
on Emergency Basis)/Not Recruit for
Permanent City Manager at this time
Options Status of
Roles
City Manager City Attorney Incumbent Additional Information ATTACHMENT 1 A variety of options follow in this table. This is not a complete list and each option may have several additional steps required to fulfill it that may not be reflected here. recruitment if
possible
but take time to ensure Recruitment
Brochure/Compensation/Benefits are
Reflective of Council/ But Recruit for
City Attorney (City Attorney to be on
site City employee position).
Options 6 Separate Roles Seek and Appoint
Interim City Manager
(staff or external)
Take time in recruiting
for permanent Role
RFP/RFQ for City
Attorney firm
Note: Contract interim
may be required
Retain through
recruitment if
possible as CITY
ATTORNEY or in
both roles
Hire Interim City Manager (Either
conducting Internal and/or External
Recruitment or Appoint City Employee
on Emergency Basis)/Not Recruit for
Permanent City Manager at this time
but take time to ensure Recruitment
Brochure/But Recruit for Attorney
Firms (Consultant/Attorney Firm – Not
City Employee)
Option 7 Separate Roles Seek and Appoint
Interim City Manager
(staff or external)
Take time in recruiting
for permanent Role
Negotiate agreement
with incumbent for
continued City Attorney
services.
Note: current
employment agreement
provides that CITY
MANAGER/CITY
ATTORNEY returns to
CITY ATTORNEY when no
longer CITY MANAGER
Retain in both
roles through
recruitment, if
possible
Hire Interim City Manager (Either
conducting Internal and/or External
Recruitment or Appoint City Employee
on Emergency Basis)/Retain Current
City Attorney Per Employee Contract.
Employment contract states that is
Employee is no longer the City
Manager, employee would remain as
City Attorney.
Option 8
A subset
of
Options
5-7
Separate Roles Council makes internal
temporary promotion
of City employee to
serve as Acting City
Manager (6 mos. 960
hrs.)
Recruit, RFP/RFQ, or
retain current incumbent
for City Attorney role
Retain through
recruitment if
possible as CITY
ATTORNEY or in
both roles
Internal Temporary Promotion of
Department Head to Acting City
Manager for no more than six months
(would not require any internal
recruitment process)
Options Status of
Roles
City Manager City Attorney Incumbent Additional Information ATTACHMENT 1 A variety of options follow in this table. This is not a complete list and each option may have several additional steps required to fulfill it that may not be reflected here.
Option 9
A subset
of
options
5-7
Separate Roles Council RFQ-RFP to
engage with staffing
agency – use to hire
and appoint Interim
City Manager
Note: ideally CalPERS
annuitant (960 hours 6
mos.) or retired
manager not PERS.
Recruit for permanent
role
Recruit, RFP/RFQ, or
retain current incumbent
for City Attorney role
Retain through
recruitment if
possible as CITY
ATTORNEY or in
both roles
Interim Hire for City Manager through
City Approved Staffing Agency:
CALPERS Annuitant (less than 960
Hours) or Retired City Manager Not
Falling Under PERS 960 Annuitant
Option
10 Separate Roles Council may appoint
and negotiate with a
current City Contract
employee for Interim
role (retired annuitant
960 hrs. & 6 mos.
apply)
Recruit for permanent
Role
Recruit, RFP/RFQ, or
retain current incumbent
for City Attorney role
Retain through
recruitment if
possible as CITY
ATTORNEY or in
both roles
Hire Current City Contract Employee As
Interim through Recruitment/Hiring
Period – (960 Hour Annuitant)
Option
11 Separate Roles Council informally
request or seek
candidate interest and
formally appoint their
choice. No formal
recruitment processes.
Council informally
request or seek
candidate interest and
formally appoint their
choice. No formal
recruitment processes.
Retain through
recruitment if
possible as CITY
ATTORNEY or in
both roles
Council could choose to not do any
recruitment and ask for informal
process of interested persons to apply
and make appointment with no formal
recruitment.