HomeMy WebLinkAbout10B City Manager Employment Agreement Oi PRIQ P
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CITY COUNCIL AGENDA REPORT
MEETING DATE: February 24, 2014
AGENDA #: 10B
PREPARED BY: Kelly Meyer, Asst. City Manager
PRESENTED BY: City Manager Evaluation Subcommittee: Mayor Hedberg, Councilor Soukup
AGENDA ITEM: CONSIDER APPROVAL OF AN EMPLOYMENT AGREEMENT WITH THE CITY
MANAGER THROUGH 2014.
DISCUSSION: Introduction: The purpose of this agenda item is to formally consider the extension of the
City Manager's employment agreement and a 2014 compensation adjustment.
History: Frank Boyles was appointed as the Prior Lake City Manager in 1993 and is now in
his 21st year with the City. The City Manager is an at -will employee appointed by the City
Council. Terms of employment for the City Manager are set out in an employment
agreement approved the by City Council. Such approval is considered annually in
connection with a performance review.
Current Circumstances: Mayor Hedberg and Councilmember Soukup serve as the
appointed members to the City Manager Evaluation Subcommittee that facilitate the written
review process, conduct the oral review and make any recommendations regarding
compensation.
The evaluation process consists of written reviews and scores submitted by each City
Council member, written comments submitted by department head staff, a written self -
evaluation submitted by the City Manager, an oral discussion with the City Manager in
Executive Session, and finally, Council action to update the employment contract and
consider any compensation adjustments.
The Manager Evaluation subcommittee has completed the written performance evaluation.
The full Council discussed the evaluation with the City Manager in Executive Session on
February 4, 2014. Following the February 4, 2014 evaluation, the City Council provided
direction to staff to update the City Manager contract and place this item on tonight's
agenda.
Conclusion: The action before the Council tonight is to consider the changes to the
employment agreement, and take formal action to approve the changes.
ISSUES: The majority of the City Manager's employment contract remains substantively the same.
Those items proposed for change are a result of direction from the subcommittee related to
compensation; or routine updates. The proposed employment agreement is attached and
recommends the following contract changes:
Contract Term: January 1, 2014 through December 31, 2014.
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
Compensation: The City Manager's last salary increase was effective in January 2013. The
revised contract under consideration proposes a 2.5% increase to the City Manager's base
salary for 2014 retroactive to January 1, 2014.
Year Increase to Base Wages Wages with Tenure Increase to Total
Base Wage Wages
2013 1% $121,804 $144,304 0.84%
2014 proposed 2.5% $124,849 $147,349 2.11%
5-Year History of City Manager Increases
Year % Increase Net $ Increase
(Total Wages)
2010 0 0
2011 2.45% 3,365*
2012 1.68% 2,365
2013 0.84% 1,206
2014 proposed 2.11% 3,045
Average 1.42% 1,996
*included adjustment to base salary and longevity
Traditionally, City employees have received the same annual adjustments across employee
groups. The primary reason is to maintain fairness across employee groups, and
consistency within the City master salary plan. The table below shows cost of living
adjustments over the last 8 years as comoared to the CPI -U for Minneapolis /St. Paul.
Year City Unrepresented AFSCME LELS Teamsters CPI -U
Manager (Managers) (Maint., Prof., (Patrol) (Sgts) (MpIsIStP)
Clerical) Annual * **
2007 3.0 3.0 3.0 3.0 3.0 2.7
2008 2.5 3.0 3.0 3.0 3.0 3.7
2009 2.5 2.5 2.5 3.0 3.0 -0.6
2010 0 0 2.5* 0 0 2.0
2011 1.0 2.0 - Dept Heads 0 ** 2.5 2.5 3.0
2.5 - Supervisors
2012 2.0 2.0 2.0 2.0 2.0 3.0
2013 1.0 2.0 2.0 2.0 2.0 2.1
2014 2.5 2.5 2.5 2.5 2.5 To be
Released
2120114
Average 1.81 2.125 - DH 2.188 2.25 2.25 2.27
2.188 - Sup
*4.8% decrease in hours worked related to furloughs in 2010
* *0.75% cost of living allowance paid as lump sum - NOT included as base wage adjustment.
** *January to January CPI -U; US Dept. of Labor, Bureau of Labor Statistics
Statutory compliance. Statute provides salaries of a person employed by a City or State
(excluding school districts) may not exceed 110 percent of the salary of the govemor,
unless the City would apply for and the State issue, a waiver. In 2014, the limit is $162,245.
The salary rate for the City Manager has always been under the maximum and, as
proposed, remains under the $162,245 maximum.
Tenure Adjustment: No change in tenure pay.
Vacation Accrual: Over his long tenure, the City Manager has accumulated a significant
bank of unused vacation accrual because, simply stated, he did not use his vacation leave.
In 2012, the contract was amended to provide a cap for any future accrual. It also added
language that requires an incremental buy down of the balance. The language of the
contract reflects the draw down to date on vacation.
FINANCIAL The General Fund budget included an increase consistent with all other bargaining groups
IMPACT: at 2.5 %.
ALTERNATIVES: 1. Motion and Second to Approve the 2014 City Manager Employment Agreement as
proposed, and Authorizing the Mayor to Execute the Agreement.
2. Motion and Second to Approve the 2014 City Manager Employment Agreement as
amended, and Authorizing the Mayor to Execute the Agreement.
3. Take no action and provide staff with additional direction.
RECOMMENDED Alternative 1 is consistent with the consensus of Council members after conducting the
MOTION: February 10, 2014 Executive Session.
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 24th day of February, 2014 by and between the
CITY OF PRIOR LAKE, a political subdivision of the State of Minnesota ( "City "), and Francis F. Boyles, III
( "Manager").
IN CONSIDERATION of the terms and conditions contained herein, the parties agree as follows:
1. Employment. During the term of this Agreement, the Manager shall serve as City Manager of the
City, and shall assume and perform, in a conscientious and diligent manner at all times, all of the
duties and responsibilities incidental to such position as defined herein and as are reasonably
assigned to him from time to time by the City Council. Manager shall use his best efforts in the
performance of his duties, and shall spend substantially his full time in connection therewith, except in
the event of illness, disability, vacation or other absence permitted by the City. Manager shall work
such hours as are reasonably assigned to him by the City Council from time to time.
2. Term. This Agreement shall be effective as of January 1, 2014 except as herein specified and shall
continue indefinitely unless or until earlier terminated as provided in Section 6 below, or until such time
as the Manager voluntarily terminates employment by thirty (30) days written notice. Manager shall
remain in the exclusive employment of the City during the term of this Agreement. For the purposes of
this section, "exclusive employment" shall exclude any teaching, writing, consulting, speaking or
military reserve service undertaken by Manager during his non -work hours.
3. Compensation. As compensation for services rendered the Manager shall receive the following:
3.1 Base Salary:
January 1, 2014 through December 31, 2014: $124,849 per annum in equal installments at
the same time as the City pays its City employees, subject to all applicable taxes.
3.2 Tenure Adjustment: The City shall annually remit a sum equivalent to $3000 per year for
each year in excess of ten years that the Manager has worked for the City in an amount not to
exceed $22,500. The payment shall be paid as wages at the same time as the City pays its
City employees, subject to all applicable taxes.
4. Benefits. Manager shall receive the following benefits at no cost to him:
(a) Vacation. The Manager's paid vacation accrual shall be 25 days (in addition to the paid
public holidays as provided for other City Department Heads). Carryover of unused vacation
time from one (1) contract year to another shall not exceed a maximum accrual of 1250 hours.
The maximum accrual shall be adjusted downward based upon any incremental buydown
arrangement. Any unused accrued vacation time in excess of the maximum accrual shall be
forfeited at the end of the contract year. Any unused accrued vacation time shall be paid to
Manager in cash at termination of employment at the then - existing base rate of pay, or at
such other times as determined by the City Council to allow for incremental buydown of
accrued vacation time prior to termination.
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(b) Sick Days. Paid sick days and sick leave payment plan (including initial thirty (30) day bank)
in accordance with City policy for Department Heads.
(c) Insurance. Medical, dental and Retirement Health Savings Plan contributions equivalent to
those contributions made for other Department Head level City employees.
(d) Life Insurance. In lieu of term life insurance coverage the City shall pay an annual
contribution of $1800 to a universal life insurance policy owned by the Manager.
(e) Retirement Plan Contribution. The City shall contribute a portion of Manager's base salary
to PERA in an amount mandated by PERA for the Coordinated Plan.
(f) Car Allowance. $450.00 car allowance per month, plus mobile cellular phone with monthly
fees paid for City related activities.
(g) Professional Development. Dues and fees for the following, provided that such items are
reasonably necessary to the professional development of the Manager, and subject to City
Council approval in the budget process or otherwise:
➢ Licenses, joumals, publications;
➢ Seminars, conferences and short courses within Minnesota and one
seminar /conference per year outside the State of Minnesota;
➢ Membership in professional associations and service organizations.
(h) Reimbursement of Expenses. Reimbursement for reasonable and necessary meals, travel
(except for travel using Manager's vehicle), lodging, and entertainment expenses, properly
documented and actually incurred by Manager in connection with the affairs of the City or in
connection with the professional development described in paragraph 4(g) above.
(i) Manager shall also be eligible for any other benefit plans or programs available to Department
Heads now or in the future.
5. Performance Evaluation. The City Council may, at its discretion, conduct quarterly performance
reviews with the City Manager. The City Council will conduct an annual performance appraisal and
salary review during the first week in December. Information from this meeting will be used by the City
Manager Evaluation Subcommittee of the City Council to formulate a salary recommendation for
consideration by the Council at the last meeting in December.
6. Termination of Employment. Manager is an at will employee of the City. As such, he may be
terminated by the City Council in its sole discretion at any time, with or without cause. Upon
termination of Manager's employment, and subject to the severance provisions of Section 7 below, all
rights and obligations under this Agreement shall cease at that time, other than those which have
accrued prior thereto. This Agreement shall terminate immediately upon death of the Manager, fraud,
theft, gross negligence or gross misconduct of Manager of his duties, or conviction of a felony or a
gross misdemeanor.
7. Severance. In the event this Agreement is terminated by the City in accordance with Section 6 above,
unless such termination is due to Manager's conviction of a felony or gross misdemeanor, or due to
fraud, theft, gross negligence, or gross misconduct of Manager, the City shall provide Manager with a
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minimum of thirty (30) days advance written notice and severance pay as set out in subparagraph (A)
below. If such termination is due to Manager's conviction of a felony or gross misdemeanor, or due to
fraud, theft, gross negligence, or gross misconduct of Manager, Manager shall forfeit any right to
advance written notice or severance pay.
(A) Payment.
1. Compensation. The City shall continue to pay Manager an amount equivalent to his
then existing compensation as set out in paragraph 3 herein, subject to all applicable
taxes, for six (6) months following the effective date of Manager's termination.
2. Benefits. During the period set forth in 7(A)1 above, the City will continue to pay
Manager the City paid contribution towards payment of Manager's medical, dental
and retirement health savings as set out in paragraph 4(c) herein.
3. Vacation and Sick Pay. Upon notice of voluntary or involuntary termination of
employment, all accrued vacation shall extend to the final date of employment as
determined by the City Manager, and be paid accordingly. No additional accrual shall
occur during this time period. Any balance of vacation accrual not taken in cash shall
be deposited into the City Manager's Retirement Health Savings Plan. All eligible
sick leave shall be paid into the City Manager's Retirement Health Savings Plan as
per plan agreement.
8. Legality. The parties covenant and agree that the provisions contained herein are reasonable and are
not known or believed to be in violation of any federal or state law or regulation. In the event a court of
competent jurisdiction finds any provision contained herein to be illegal or unenforceable, such court
may modify such provision to make it valid and enforceable. Such modification shall not affect the
remainder of this Agreement which shall continue at all times to be valid and enforceable. No payment
may be made under this Agreement in excess of the maximum amount permitted by applicable law.
9. Interpretation. This Agreement constitutes the entire agreement between the parties and supersedes
any prior oral or written agreements between the parties. This Agreement can only be modified in
writing signed by both parties. This Agreement shall be interpreted in accordance with the laws of the
State of Minnesota.
10. Assignment. The rights and obligations of the City to the Manager in this Agreement may not be
transfer or assigned by the Manager.
11. Arbitration. Any controversy conceming a question of fact arising under this Agreement shall be
determined by arbitration in accordance with the rules then in effect for the American Arbitration
Association.
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IN WITNESS WHEREOF, the parties have caused the execution of this Agreement the day and year
first above written. This document excluding exhibits consists of 4 pages.
CITY OF PRIOR LAKE
By:
Kenneth L. Hedberg, Mayor
Francis F. Boyles, III
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