2022-25 McMillen, Jon - CM Employment AgreementPage 1 of 9
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered as of
July 1, 2022 (the “Effective Date”), by and between the City of La Quinta, a public body
(the “City” or “Employer”), and Jon McMillen, an individual (the “Employee”), both
of whom understand as follows:
WITNESSETH:
WHEREAS, the City desires to continue to employ the services of Employee as
the City Manager as provided by the La Quinta Municipal Code; and
WHEREAS, it is the desire of the City to establish certain conditions of
employment and to set working conditions of said Employee; and
WHEREAS, Employee desires to accept the continued employment as City
Manager of said City.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree as follows:
Section 1. Duties.
A.Employer hereby agrees to employ Employee as City Manager of said
City to perform the functions and duties specified in the La Quinta Municipal Code and
as provided by state and federal law and to perform other legally permissible and
proper duties and functions as the City Council shall from time to time assign.
B.Employee, with prior written approval of the City Council, may undertake
outside professional activities for compensation, including teaching, speaking and
writing, provided they do not interfere with Employee’s normal duties and are done
only during vacation or other non-working time of Employee and are not done with
any existing vendors or contractors of the City. Under no circumstances shall such
outside activity create a conflict of interest with the duties of the City Manager and the
interests of the City.
Section 2. Term.
A.The term of this Agreement shall be from July 1, 2022 through and
including June 30, 2025, unless earlier terminated as provided herein. Thereafter, the
parties may renew the Agreement pursuant to their mutual agreement.
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B.Nothing in this Agreement shall prevent, limit or otherwise interfere with
the right of the City Council acting for the City to terminate the services of Employee
at any time, with or without cause, subject only to the provisions set forth in Section
4, paragraphs A, B and D of this Agreement.
C.Nothing in this Agreement shall prevent, limit or otherwise interfere with
the right of the Employee to resign at any time from his position with Employer,
subject only to the provision set forth in Section 4, Paragraph E, of this Agreement.
Section 3. Administrative Leave with Pay.
Employer may place Employee on Administrative Leave with full pay and
benefits at any time during the term of this Agreement. However, if the purpose of
placing Employee on Administrative Leave With Pay is to conduct an investigation
into potential wrongdoing, and after that investigation, Employee is convicted of a
crime involving abuse of his/her office or position, then pursuant to Government Code
Section 53243, Employee shall be required to fully reimburse City for any salary or
benefits received while on Administrative Leave With Pay. “Abuse of office or
position” shall be as defined in Government Code Section 53243.4, as may be
amended.
Section 4. Termination and Severance Pay.
A.In the event Employee is terminated by the City Council during such time
that Employee is willing and able to perform his/her duties under this Agreement, then
Employer agrees to pay Employee a lump sum cash payment equal to either six
months’ salary or the salary for the remaining term of this Agreement, whichever is
less. Pursuant to Government Code Section 53243.5, if Employee is later convicted of
a crime involving abuse of office or position, then any severance paid under this
Section 4.A shall be returned by Employee to Employer.
B.Employee may be terminated at any time for willful misconduct as
defined in Section 2.08.160 of the City’s Municipal Code or for abuse of his/her office
or position as defined in Government Code Section 53243.4 as may be amended. The
determination of what constitutes willful misconduct shall be within the sole
discretion of the City Council, provided that it shall relate to the welfare of the City.
Willful misconduct includes conduct directly related to conduct in office and the duties
of the office. It also includes conduct not directly related to the performance of the
official duties of the office when such conduct has a direct and harmful effect on the
welfare or reputation of the City. Evidence of such direct and harmful effects includes,
but is not limited to, conviction of a felony or a crime of moral turpitude. Employee
shall be entitled to the right to a hearing as provided in Sections 2.08.100 through
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2.08.150 of the Municipal Code prior to termination under Sections 4.A and 4.B of this
Agreement. In the event that Employee is terminated for willful misconduct or abuse
of office or position, City shall have no obligation to pay and shall be prohibited from
paying, the severance sum designated in Section 4.A above, or any severance sum at
all.
C.Nothing in this Agreement shall prohibit Employer from imposing
discipline less than termination upon Employee, including written reprimands,
suspensions, or reductions in pay. Employee shall not be entitled to any due process
as a result of the implementation of discipline less than termination.
D.In the event: (1) Employer at any time during the term of this Agreement
reduces the salary or other financial benefits of Employee (other than a suspension of
five (5) working days or less or a temporary reduction in salary of thirty (30) days or
less) in a greater percentage than an applicable across-the-board reduction for all
employees of Employer; or (2) Employer refuses, following written notice, to comply
with any other provisions benefiting Employee herein; or (3) Employee resigns
following a formal suggestion by the City Council that he/she resign, then Employee
may, at his/her option, be deemed to be “terminated” as of that time, and shall be
entitled to the severance provisions of Section 4.A above.
E.In the event Employee voluntarily resigns his/her position with Employer
before expiration of the above-referenced term of his/her employment, then Employee
shall give Employer sixty (60) days’ notice in advance, unless the parties otherwise
agree, and Employee shall not be entitled to any severance pay.
Section 5. Disability.
If Employee is permanently disabled or is otherwise unable to perform his/her
duties because of sickness, accident, injury, mental incapacity or health for a period
of six (6) successive weeks beyond any accrued sick leave to which Employee is
entitled, or for the legal duration of the Family & Medical Leave Act (whichever is
greater), Employer shall have the option to terminate this Agreement. Termination
pursuant to this Section would not subject the City to payment of severance benefits
as specified under Section 4.A above. However, Employee shall be compensated for
any accrued, vacation, holidays, administrative leave and other accrued benefits on
the same basis as any other employee of the City pursuant to the Personnel Rules.
Section 6. Salary.
A.Employer agrees to pay Employee for his services rendered pursuant
hereto an annual base salary of $219,730.00, effective on July 1, 2022 (“Base Salary
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Effective Date”), payable in equal installments at the same time as other employees
of the Employer are paid. No later than ninety (90) days after the Base Salary Effective
Date, Employee shall be eligible for an increase to the base salary in an amount to be
determined by the City Council and, once determined, shall be (in accordance with
any applicable law) retroactive to the Base Salary Effective Date and effective for the
balance of the term of this Agreement and memorialized in an amendment to this
Agreement; additionally, no later than ninety (90) days after the Base Salary Effective
Date, Employee shall be eligible for an adjustment to the annual performance-based
compensation set forth in Section 6, Paragraph B, and for any other terms and
conditions relating to Employee’s compensation, to be memorialized in an
amendment to this Agreement; provided, however, that any increase in the base
salary, annual performance-based compensation, or other compensation shall be in
the sole and absolute discretion of the City Council who may (but need not) use, as
part of the assessment for an annual base salary increase, the same criteria set forth
in Section 6, Paragraph B, of this Agreement. Employer agrees to review said base
salary and/or other benefits of Employee at the time of an annual evaluation which
shall be initiated in May or June for each year of the Term. Employer may recommend
adjustments to salary and/or other benefits during the time period that the annual
review is performed.
B.In addition to the annual base salary, Employee may be eligible for
annual performance-based compensation in the amount of up to 5% of Employee’s
annual base salary, not to exceed $10,000, for any year in which performance-based
compensation may be paid. Performance-based compensation shall be paid in a
lump-sum for any given year, and, for purposes of such compensation, a year shall
correspond to the City’s fiscal year. Any payment of performance-based
compensation shall be at the discretion of the City Council, and may only be paid if,
in the City Council’s discretion, Employee successfully meets performance goals and
objectives as more particularly described in Exhibit “A” attached hereto and
incorporated by reference (the “Performance-Based Compensation Metrics”). The
City Council may meet, in accordance with applicable law, at least one time every
fiscal quarter to evaluate the performance of Employee with respect to the progress
on the Performance-Based Compensation Metrics. Any performance-based
compensation authorized by the City Council pursuant to this paragraph shall be paid
directly to a supplemental retirement plan for Employee pursuant to United States
Internal Revenue Code section 457(b) or other lawful supplemental retirement plan
authorized pursuant to applicable federal or state law (commonly referred to as a
deferred compensation plan and referred to herein as the “Supplemental Plan”). Prior
to any payment of performance-based compensation to Employee pursuant to this
paragraph, the City Council shall establish and authorize, if not previously established
and authorized, the maintaining of a Supplemental Plan in accordance with applicable
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law. Any performance-based compensation to Employee shall not be a payroll
deduction and shall not be deemed or reported to the California Public Employees’
Retirement System (“CalPERS”) as “compensation earnable” as long as such
performance-based compensation is paid directly to the Supplemental Plan. Any
payment of performance-based compensation pursuant to this paragraph shall be
paid to the Supplemental Plan no later than December 31 after the immediately
completed prior fiscal year. In explanation of the previous sentence, any performance-
based compensation for fiscal year 2018-19 shall be paid to the Supplemental Plan no
later than December 31, 2019; for fiscal year 2019-20, paid no later than December 31,
2020; for fiscal year 2020-21, paid no later than December 31, 2021; and for fiscal year
2021-22, paid no later than December 31, 2022. After the City Council duly establishes
and authorizes the maintaining of the Supplemental Plan, the City Council authorizes
Employee or his designee(s) to execute any documents necessary or proper to
maintain the Supplemental Plan prior to any payment of performance-based
compensation to Employee, but the City Council retains any and all discretion to
award or not award any and all performance-based compensation to Employee.
Section 7. Hours of Work.
In addition to working normal business hours, it is recognized that Employee
must devote time outside the normal office hours to business of the Employer.
Employee shall have 120 hours of Administrative Leave. For partial calendar years,
the hours of Administrative Leave shall be prorated. Employee may not be employed
by, or provide services (except if authorized pursuant to Section 1, Paragraph B above)
to, any other entity while employed by the City.
Section 8. No Transportation Allowance.
City shall not provide a transportation allowance. Employee shall not be
provided a City vehicle. Employee shall be entitled to reimbursement for mileage for
the use of Employee’s automobile for City business at then-applicable IRS rate.
Section 9. Vacation, Bereavement, and Sick Leave.
Employee shall accrue, and have credited to his/her personal account, vacation,
bereavement and sick leave as provided for pursuant to the City’s Employee Personnel
Rules.
Section 10. Other Benefits.
Employee shall be provided with the same health, dental, vision, life insurance,
and retirement benefits and any future cost of living increases that occur after the
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Effective Date, as other general full time employees of the City. Employee may receive
an annual physical examination at City expense.
Section 11. Other Terms and Conditions of Employment.
A.The City Council, in consultation with the City Manager, shall fix any such
other terms and conditions of employment, as it may determine from time to time,
relating to the performance of Employee, provided such terms and conditions are not
inconsistent with or in conflict with the provisions of this Agreement, the Municipal
Code or any applicable state or federal law.
B.All regulations and rules of the Employer relating to vacation and sick
leave, retirement and pension system contributions, holidays and other fringe benefits
and working conditions as they now exist or hereafter may be amended, shall also
apply to Employee as they would to other full-time employees of Employer, in addition
to the benefits specifically set forth herein for the benefit of Employee.
Section 12. Notices.
Notices pursuant to this Agreement shall be given by: (1) email with verification
of delivery; (2) facsimile transmission with confirmation; (3) personal delivery; (4)
overnight delivery service with confirmation; or (5) deposit in the custody of the
United States Postal Service, postage prepaid, addressed as follows:
EMPLOYER: CITY OF LA QUINTA
78-495 Calle Tampico
La Quinta, CA 92253
Attn: City Clerk
email: Monika Radeva <mradeva@laquintaca.gov>
with copy to: RUTAN & TUCKER, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Attn: William H. Ihrke, Esq.
email: bihrke@rutan.com
EMPLOYEE: Jon McMillen
53521 Eisenhower Drive
La Quinta, CA 92253
Notice shall be deemed given as of the date of personal, overnight delivery,
email, or facsimile service or as of the date of deposit of such written notice in the
course of transmission in the United States Postal Service.
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Section 13. General Provisions.
A.This Agreement shall constitute the entire agreement between the
parties. No prior oral or written communications are incorporated herein.
B.This Agreement shall be binding upon and inure to the benefit of the heirs
at law and executors of Employee.
C.This Agreement may be signed in counterparts with signature pages
transmitted by email, facsimile, personal delivery or overnight delivery, all of which
will be treated as originals.
D.If any provision, or any portion thereof, contained in this Agreement is
held unconstitutional, invalid or unenforceable, the remainder of this Agreement, or
portion thereof, shall be deemed severable, shall not be affected and shall remain in
full force and effect.
[signatures on next page]
Exhibit “A”
Performance-Based Compensation Metrics
Annually, the City Council assesses the City Manager’s performance after reviewing
the organization’s and his accomplishments. If the City Manager achieves an overall
performance rating of Exceeds Expectations, then the City Manager may receive
Performance Based Compensation as outlined in Section 6, Paragraph B of the
Agreement. For Fiscal Year 2022-23, the City Manager’s performance measures shall
be based upon the items outlined below and any additional items established by the
City Council at quarterly reviews for the City Manager after the Base Salary Effective
Date in the Agreement. Performance measures for Fiscal Years 2023-24 and 2024-25
will be established by the City Council for those respective years as a result of the City
Manager’s annual performance review.
Fiscal Year 2022-23 Performance Measures
Fiscal Stability/Revenue Growth
•Continue and improve implementation of community outreach that engages
the community and increases the community’s understanding of how to sustain
City service levels, facilities and infrastructure.
•Enhance service delivery that results in delivering increased services at a fair
and reasonable cost.
•Identify and implement strategic infrastructure and public facility investments
that are efficient and reduce operations’ costs.
•Develop, maintain and advance an operating budget wherein revenues and
expenditures are balanced, and reserves are not needed to fund operations.
Community and Economic Development
•Continue to work with IID, CVWD and stakeholders to guide and improve the
near and long term energy delivery and reliability for the City.
•Continue the oversight for the development and use of SilverRock Resort.
•Continue the oversight of the economic development plans relating to Highway
111 Corridor.
Improve the Organization’s Strength
•Continue employee development as part of a succession plan.
•Improve reporting of service delivery metrics for all departments.
•Develop a Strategic Plan for the City that identifies goals, actions and resources.
This plan will be updated annually and will help guide direction and process.
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City of La Quinta
CITY COUNCIL MEETING: June 21, 2022
STAFF REPORT
AGENDA TITLE: APPROVE CITY MANAGER EMPLOYMENT AGREEMENT
RECOMMENDATION
Approve City Manager Employment Agreement.
EXECUTIVE SUMMARY
Council hired Jon McMillen, current City Manager, on July 1, 2019 for a
three-year term.
Pursuant to the current employment agreement, Council conducted
regular performance evaluations of the City Manager since his hiring.
As reported out at the May 3, 2022 Council Meeting, after concluding a
performance evaluation, Council approved a three-year extension of Mr.
McMillen’s term.
FISCAL IMPACT
Current base salary of $219,730 annually, and Council has discretion for
annual performance-based compensation up to 5% of the annual base salary,
not to exceed $10,000, for any year in which performance-based
compensation may be paid. Adjustments to base salary and compensation
may be made by Council within 90 days and memorialized by amendment to
the proposed agreement. City Manager receives the same fringe benefits
compensation as authorized for management employees.
BACKGROUND/ANALYSIS
In February 2019, the City hired an independent consulting firm with expertise
in city management recruitment to assist the Council in the process of hiring
a new city manager. After a national recruitment that attracted 72 applicants
from around the country, the list of finalists was narrowed to six semi-finalists
and two finalists after discussions in closed session with Council, a series of
interviews with candidates, and a thorough review of references, among other
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recruiting actions. At its May 21, 2019 Regular Meeting, the Council
unanimously voted (5-0 in favor) to appoint Mr. McMillen as City Manager,
effective July 1, 2019, and to approve terms and condition of a three-year
employment agreement. The current agreement expires June 30, 2022.
Pursuant to the current agreement, Council held one of its periodic evaluations
of the City Manager and voted unanimously (5-0 in favor) to extend for three
additional years Mr. McMillen’s service as the chief management employee of
the City. The Council also directed the City Attorney to return with an updated
agreement for the extended term.
The proposed Employment Agreement (Attachment 1) is almost identical to
the Council’s previously approved agreement for Mr. McMillen. It has been
updated with a 3-year term commencing July 1, 2022, base salary in effect at
the expiration of the current agreement, and authorization for Council to
amend the City Manager’s compensation within 90 days of July 1, 2022, if
Council in its sole discretion deems it. Other minor, non-substantive
corrections and update as appropriate based on, among other criteria,
comparable city manager salaries or other performance metrics as have been
updated in the Employment Agreement.
ALTERNATIVES
None proposed.
Prepared by: Bill Ihrke, City Attorney
Approved by: Jon McMillen, City Manager
Attachment: 1. Employment Agreement (for current City Manager)
Effective July 1, 2022
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