GRESHAM CITY COUNCIL AGENDA ITEM TYPE: DECISION

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1 GRESHAM CITY COUNCIL AGENDA ITEM TYPE: DECISION City Manager Employment Contract Meeting Date: June 2, 2015 Agenda Item Number: C-5 Service Area: Governance & Mgt Service Area Manager: Mayor and City Council REQUESTED COUNCIL ACTION Approve employment contract with the City Manager. PUBLIC PURPOSE AND COMMUNITY OUTCOME In accordance with the Gresham City Charter, the City Council employs a City Manager as the administrative head of the City. BACKGROUND A performance evaluation was conducted in December, 2014, per the terms of the existing contract. RECOMMENDATION AND ALTERNATIVES Approval of an employment contract for the City Manager is recommended. BUDGET / FINANCIAL IMPACT Funding for the position is included in the annual budget. PUBLIC INVOLVEMENT This is an administrative item and does not require a public involvement plan. NEXT STEPS The contract will be effective July 1, 2015, if approved. ATTACHMENTS A. City Manager Employment Contract FROM: Rachael Fuller, Assistant City Manager 1

2 REVIEWED THROUGH: Council President Jerry Hinton FOR MORE INFORMATION Staff Contact: Rachael Fuller, Assistant City Manager Telephone: Staff Website: 2

3 CITY MANAGER EMPLOYMENT CONTRACT Contract No. THIS CONTRACT is between the City of Gresham, Oregon, a municipal corporation (City), and Erik Kvarsten (Employee). RECITALS City has employed Employee since September 21, 2004 as City Manager and desires to modify the existing terms of employment, as set forth in this Employment Contract ( Contract ). By signing below, City and Employee agree that the terms of this Contract and the continued employment relationship constitute sufficient mutual consideration for modification of the employment terms. Section 1. CITY MANAGER DUTIES 1.1 The City employs Erik Kvarsten as City Manager to perform the functions and duties specified in Section 20 of the City Charter, the Gresham Revised Code, Council resolutions and other duties as may be directed or assigned from time to time by the City Council. 1.2 Unless varied by this Contract, Employee is subject to all terms and conditions of the City Code, the Gresham Administrative Rules (GARs) and the Gresham Employee Manual policies (GEMs) as they currently exist or are subsequently modified, and any other applicable resolutions, policies or procedures that may be subsequently issued by the City. Section 2. HOURS OF WORK Employee will use his best efforts and devote his full time to this position and its responsibilities. Employee must not engage in any other employment, or engage in any other business activity that interferes with City duties and responsibilities. Since Employee must devote time outside of normal office hours to City responsibilities, City agrees that Employee may take an equivalent amount of compensatory time off and is not responsible for accounting for compensatory leave taken in increments of four hours or fewer. The parties acknowledge that Employee is classified as exempt under the Fair Labor Standards Act. Section 3. COMPENSATION City will pay Employee for services under this Contract at an annual salary of $149,604, payable in equal installments on the City s regular pay days. Effective July 1, 2015 and for the duration of this contract, the City Manager will receive annual salary adjustments equivalent to those, if any, provided to Department Directors. The City Council will not reduce the salary or other financial benefits paid to Employee except by mutual agreement, or due to financial exigency in the same percentage applied to all Department Directors. City Manager Employment Contract Page 1

4 Section 4. ANNUAL PERFORMANCE EVALUATION The City Council will conduct a formal review of Employee s work performance on a mutually agreeable date and in a mutually agreeable format. The performance evaluation will be used by the City Council to determine salary adjustments, if any, for the City Manager. Section 5. BENEFITS 5.1 City will make contributions on behalf of Employee to the Public Employees Retirement System on the same terms as for Department Directors, in accordance with applicable law and the GARs and GEMS as they currently exist or are subsequently modified. 5.2 Employee will continue to receive paid time off (PTO) at the maximum accrual amount currently specified for Category C employees under the GARs. Employee will receive payment for accrued unused PTO benefits upon termination of employment, on the same terms as for Department Directors, but will not be paid for accrued sick leave upon termination of employment for any reason. Employee will also receive all other fringe benefits on the same terms as Department Directors in accordance with the GARs and GEMs as they currently exist or are subsequently modified, unless different terms are specified in this Contract. 5.3 City will purchase and pay the required premiums on a term life insurance policy on the life of the Employee in the amount of Employee s annual base salary, with the beneficiary named by Employee. Section 6. AUTOMOBILE ALLOWANCE Employee's duties require the use of an automobile and City will pay Employee a monthly automobile allowance in the sum of $500, plus the equivalent of 1% of monthly salary (in lieu of the MSA/VEBA benefit previously received). Employee agrees that he is responsible for maintaining liability insurance in an amount acceptable to City on any vehicle used for City business. Employee also acknowledges that he is responsible for all costs associated with the purchase, operation, maintenance, repair and replacement of such automobile. The automobile allowance is in lieu of any reimbursement to Employee for mileage from Employee's personal automobile. Employee agrees that the automobile allowance is not considered to be wages subject to withholding, and that he is responsible for paying any income taxes owed on this amount. Section 7. PROFESSIONAL DEVELOPMENT AND EXPENSES 7.1 City will budget and pay the dues and subscriptions of Employee for participation in national, regional, state, and local professional organizations. City will budget and pay the reasonable travel and subsistence expenses of Employee to attend meetings, conferences, and continuing education seminars that are necessary for Employee's professional development and the good of the City. This includes conferences and meetings of the International City Manager Employment Contract Page 2

5 City/County Management Association, National League of Cities and League of Oregon Cities. 7.2 City will also budget and pay for other reasonable travel and subsistence expenses of Employee for official travel, meetings, and other functions. City will pay or reimburse Employee for job related expenses in accordance with approved City practice upon receipt of appropriate documentation. 7.3 The total employee professional development expenses and travel expenses referenced in this Section 7 may not exceed the amount specified in the adopted budget without written approval by the City Council. 7.4 Personal use of computer equipment is permitted. Employee understands there is no reasonable expectation of privacy in communications, documents or other materials stored in City computers and electronic systems, regardless of how or where stored. The City reserves the right to monitor use of its computers and electronic systems and may be required to disclose communications, documents or other materials stored on City computers and electronic systems through public records requests or as otherwise required by law. Section 8. TERM OF THE CONTRACT This Contract is effective immediately upon execution by Employee and a member of the City Council, with approval by the City Council. The term of this Contract shall end on June 30, 2018 unless terminated earlier pursuant to Sections 9, 10 or 11 below, or extended by a written agreement between the City Council and Employee. This contract may be modified only by written agreement signed by Employee and an authorized representative of the City Council. Section 9. VOLUNTARY RESIGNATION BY EMPLOYEE Employee may resign from employment for any reason. Employee agrees to provide City with at least 30 days written notice of resignation. If Employee is prevented from giving 30 days notice due to a verified unanticipated emergency, Employee shall give City as much advance notice as possible. Employee shall continue to perform his duties in full during the notice period, unless relieved of some or all of his duties by the City Council. Employee shall not be entitled to receive any severance pay as a result of a voluntary resignation. A resignation in lieu of termination or upon request from the City Council shall not be construed as a voluntary resignation. Section 10. TERMINATION BY CITY FOR CAUSE 10.1 Employee s employment may be terminated for cause if Employee engages in gross misconduct. Gross misconduct includes criminal conduct; acts of moral turpitude; violation of City s policies relating to discrimination or harassment; refusal to follow lawful directives by the City Council; gross abuse of authority; gross misuse of funds or property belonging to City; or dishonesty in carrying out the responsibilities of Employee s position. Employee shall be entitled to procedural due process prior to termination for misconduct. City Manager Employment Contract Page 3

6 10.2 Employee s employment may be terminated for cause if Employee is unable to perform the essential functions of his position due to physical or mental disability. Nothing in this section is intended to relieve City of its obligation to comply with state and federal medical leave laws and disability laws, including reasonable requests for leave of absence and other accommodations. Section 11. TERMINATION WITH SEVERANCE PAY City may terminate Employee s employment at any time for reasons other than gross misconduct if City pays Employee severance pay as provided in this Section A termination under this Section shall be deemed to occur if: The City Council votes to terminate Employee s employment at a duly authorized public meeting, or requests Employee s resignation, for reasons other than cause under Section 10; City s Charter is amended to substantially change the role, powers, duties, or authority of the City Manager, or substantially changes City s form of government; or City reduces the base salary or financial benefits of Employee, unless it is concurrent with a reduction for Department Directors and applied in no greater percentage than the average reduction If a termination occurs under this Section 11, Employee shall be entitled to receive severance pay in an amount equal to the lesser of: six (6) months of Employee s base salary, or the remaining balance of Employee s base salary for the term of the Contract, less applicable withholding. The severance amount shall be provided in a lump sum payment unless otherwise agreed in writing by the City and Employee. As a condition of receiving the severance payment, Employee shall be required to sign a general release of any claims he has or may have against the City and its representatives. Section 12. ARBITRATION OF DISPUTES City and Employee agree that any proceeding for breach or enforcement of this Contract shall be resolved in final and binding arbitration before a single arbitrator in accordance with the rules of the Arbitration Service of Portland (see unless City and Employee agree in writing to use a different arbitration service. The party bringing the claim must make a demand for arbitration within the applicable statutory limitations period. The prevailing party in any proceeding for breach or enforcement of this Contract shall be awarded that party s reasonable attorney fees incurred in the proceeding. This provision is governed by the Federal Arbitration Act. City Manager Employment Contract Page 4

7 Section 13. GENERAL PROVISIONS This Contract constitutes the entire agreement between City and Employee regarding the subject matter covered, except for additional material expressly incorporated by reference If any provision of this contract is determined to be invalid or unenforceable, the provision may be modified or deleted by a court or arbitrator with jurisdiction over the matter. All other terms and provisions of this Contract shall remain in full force and effect. EMPLOYEE: Signature Date FOR THE CITY OF GRESHAM: Signature Date The City Council approved this Contract on, City Manager Employment Contract Page 5