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Home My WebLink AboutStaff Report 4.D 09/18/2017Agenda Item #4.D y w *� ail DATE: September 18, 2017 TO: Honorable Mayor and Members of the City Council FROM: Amy Reeve, Director of Human Resources SUBJECT: Resolution Approving the First Amendment to the First Restated At -Will Agreement for Employment of City Attorney RECOMMENDATION It is recommended that the City Council adopt the attached resolution approving the First Amendment to the First Restated At -Will Agreement for Employment of the City Attorney, and Authorizing the Mayor to execute said Agreement. BACKGROUND The City Attorney reports to the City Council, and is employed pursuant to an employment agreement. The Agreement dictates the Attorney's compensation, benefits, and working conditions. In June 2013, the City Council approved an at -will employment agreement with the City Attorney, effective July 1, 2013. The Agreement was restated one time in 2017 to: increase annual Compensation; provide for reduction of annual sell -back of unused administrative leave; and to establish an expiration date for the term of the Agreement. During FY 2016/17, the City Council approved changes to the agreements with AFSCME represented bargaining units (Units 1, 2, and 3) the Petaluma Professionals and Mid - Managers Association (Units 4, 9, and 11 - PPMMA), and Department Directors, Unit 8. These groups agreed to a greater share of the City's cost of the PERS retirement program. The increased cost to employees was offset by adjustments to their base salaries. These bargaining units represent nearly the entirety of the "Miscellaneous" group of employees. The PERS retirement formula for these employees is 2 percent at age 55, 60, or 62, depending on hire date. This compares to the "Safety" group, whose formulas are 3 percent at age 50, 55, or 57, depending on hire date. Increases in the amount of contribution by individual employees to the PERS Employer Contribution were negotiated with the Miscellaneous bargaining groups. These employees agreed to assume 3% of the Employer Contribution, in addition to the 6.25 -7 percent Employee Contribution they have always paid. This brings to 10 percent the total employee contribution for those hired prior to January 1, 2013, and 9.25% for those hired after that date. In exchange, these groups received a 3 percent base wage increase, to offset their out -of- pocket costs for the PERS pick -up. This results in a three- quarter of one percent (0.75 %) increase in employee wages, over the employee cost of the PERS pickup, reflecting the difference between taxable wages and pre -tax benefits. In addition to this pick -up, Units 1, 2, 3, 4, 9, and 11 also agreed to an additional pick -up of one percent in a subsequent year, for which their base wage will be increased 3/a of one percent (.0075). The City Manager, the City Clerk, and the City Attorney constitute the remainder of the "Miscellaneous" employees who have agreed to an additional PERS contribution and who will cast a vote to amend the Ca1PERS contract to reflect the additional employee pick -up. The City Council approved the additional PERS contribution for the City Manager at the September 1, 2017 meeting and the City Attorney and City Clerk contract amendments are before the Council for consideration on September 18, 2017. If approved, the next Ca1PERS contract amendment will authorize an additional three percent (3 %) employee contribution to Ca1PERS for employees in Unit 8 (Department Directors) and Unit 10 (Public Safety Mid - Management) as well as the executive employees under contract, as mentioned above. DISCUSSION Changes from the First Restated At -Will Agreement for Employment of City Attorney are in Sections 5 and 11. These changes are summarized below: Section 5, Compensation, provides for a three (3) percent salary increase to offset the PERS pick -up required in Section 17. This will not be effective until the first payroll period following the adoption of a PERS contract amendment, but will increase the annual base wage to $198,707.60. This is not expected to occur until January 2018. Section 11, Retirement, is changed to require the City Attorney to pay three (3) percent of the City's contribution towards PERS retirement. This change would be effective the first payroll following the adoption of a contract amendment with Ca1PERS, which is estimated to occur in January 2018. FINANCIAL IMPACTS The three percent (3 %) salary increase results in an increase to compensation of $482.30 per month, or $5,787.60 annually. A cost difference exists between the value of the PERS pick -up and the proposed base wage increase. This reflects the difference between a taxable wage and a pre -tax benefit, and roll -up costs associated with increasing the base wage. Together, these changes result in a net increase to total compensation of $124.19 per month, or $1,490.31 annually. ATTACHMENTS 1. Resolution 2. Exhibit A to Resolution — First Amendment to First Restated At -Will Agreement for Employment of City Attorney 2 ATTACHMENT 1 Resolution No. 2017- N.C.S. of the City of Petaluma, California A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA APPROVING THE FIRST AMENDEDMENT TO THE FIRST RESTATED AT -WILL AGREEMENT FOR EMPLOYMENT OF CITY ATTORNEY AND AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT WHEREAS, CITY and City Attorney (the Parties) entered into an At -Will Agreement (Agreement) for Employment of City Attorney dated July 1, 2013; and, WHEREAS, the Agreement has been restated one time, to: increase annual Compensation; provide for reduction of annual sell -back of unused administrative leave; and to establish an expiration date for the term of the Agreement; and WHEREAS, the Parties desire to amend the Agreement to require the City Attorney to pick -up a three (3) percent share of the City's cost of PERS retirement benefits, and to increase the Attorney's base wage by three (3) percent, to $198,707.60; and WHEREAS, the PERS pick -up and base wage adjustment shall only be effective upon adoption of a contract amendment with CaIPERS; and WHEREAS, the City Council and City Attorney Eric Danly agree to the changes in the terns of Employment, Compensation, and Benefits relating to the position of City Attorney as set forth in the First Amendment to the First Restated At -Will Agreement for Employment of City Attorney attached and incorporated herein as Exhibit A. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Petaluma hereby approves the First Amendment to the First Restated At -Will Agreement for Employment of City Attorney, attached as Exhibit A and incorporated herein by reference. BE IT FUTHER RESOLVED that the City Council of the City of Petaluma hereby authorizes the Mayor to execute said Amendment. rd EXHIBIT A FIRST AMENDMENT TO THE FIRST RESTATED AT -WILL AGREEMENT FOR EMPLOYMENT OF CITY ATTORNEY This Amendment is made and entered into this day of September 2017, by and between the City of Petaluma, California, a charter city, ( "the CITY "') and Eric Danly ( "City Attorney "). The City and the City Attorney do hereby agree to amend the First Restated At -Will Agreement for Employment of City Attorney ( "Agreement ") in accordance with the following: Paragraph (a) of Section 5, "Compensation ", is amended to read as follows: 5. Compensation: a. The City agrees to pay City Attorney an annual base salary of $192,920.00, payable in installments at the same time that the other employees of the CITY are paid. Effective the first payroll following the adoption of a contract amendment with Ca1PERS and concurrent with City Attorney paying an additional three percent (3 %) towards PERS retirement, City Attorney shall receive a 3% base wage increase and shall be paid an annual base salary of $198,707.60. 2. Section 11, "Retirement ", is amended to read as follows: 11. Retirement: a. City has previously enrolled City Attorney into the California Public Retirement System (PERS). City agrees to make all the appropriate contributions on City Attorney's behalf, for the employer share required, and to contribute on behalf of City Attorney seven percent (7 %) of City Attorney's base salary in accordance with Section 5 of the Agreement, as amended from time to time, into the City of Petaluma 401 (A) Government Money Purchase Plan and Trust. City Attorney shall pay the entire contribution for the PERS employee share required. Effective the first payroll following the adoption of a contract amendment with CalPERS, City Attorney shall pay an additional three percent (3 %) towards PERS retirement. The parties shall work collaboratively to expedite formal adoption of a contract amendment with Ca1PERS to reflect this cost - sharing agreement under which the employee is paying a portion of the employer contribution to PERS. Except as otherwise amended hereby, all other terms of the Agreement remain unchanged and in full force and effect. CITY ATTORNEY In Eric Danly, City Attorney CITY IN David Glass, Mayor DATED: ATTEST: Claire Cooper City Clerk APPROVED AS TO FORM: Lisa Tennenbaum Assistant City Attorney DATED: