2022-25 McMillen, Jon - CM Employment Agreement Amendment 1FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment")
is made and entered as of October 4, 2022 (the "Amendment 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, the City and Employee entered into that certain EMPLOYMENT
AGREEMENT made and entered July 1, 2022 ("Original Agreement"), which is the
operative agreement for the city manager's employment with the City; and
WHEREAS, it is the desire of the City to amend certain conditions of
employment of said Employee as contemplated in the Original Agreement; 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 to the following amendment to the Original Agreement, as follows:
AMENDMENT:
Section 6 of the Original Agreement is deleted in its entirety and amended, to read:
Section 6. Salary.
A. Employer agrees to pay Employee for his services rendered
pursuant hereto a base salary of $250,000.00 ("Employee Base Salary")
from July 1, 2022 ("Base Salary Effective Date"), payable in equal
installments at the same time as other employees of the Employer are
paid. For the first fiscal year commencing from the Base Salary Effective
Date, Employee shall be deemed at Step 10 under the 2022/23 salary
schedule in effect as of the Amendment Effective Date ("Applicable
Salary Schedule") notwithstanding an inconsistency with the Employee
Base Salary set forth in this Amendment (which applies for the first fiscal
year) and the salary identified for the city manager in the Applicable
Salary Schedule. Commencing on the second fiscal year after the Base
Salary Effective Date (commencing July 1, 2023), and for each fiscal year
thereafter in which Employee is employed pursuant to the Original
Agreement (as may be amended including by this Amendment),
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Employee's base salary for the applicable fiscal year shall be the base
salary that corresponds to the step level for the full time employee
position of city manager as set forth in the Applicable Salary Schedule.
Employer may review the 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 to be memorialized by written amendment
to the Original Agreement.
B. In addition to the annual base salary in Paragraph A above,
Employee shall be entitled to $30,000.00 in annual deferred
compensation. Any deferred compensation authorized pursuant to this
paragraph shall be paid directly to a qualified retirement plan or
supplemental retirement plan for Employee pursuant to the United States
Internal Revenue Code or other lawful retirement plan authorized
pursuant to applicable federal or state law (commonly referred to as a
deferred compensation plan). Prior to any payment of deferred
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 retirement plan in
accordance with applicable law. Deferred compensation to Employee
shall not be a payroll deduction and shall not be deemed or reported to
the California Public Employees' Retirement System ("CaIPERS") as
"compensation earnable" as long as such deferred compensation is paid
directly to the supplemental retirement plan qualified for treating the
deferred compensation as such. Any payment of deferred compensation
pursuant to this paragraph to be paid to a supplemental retirement plan
shall be paid no later than December 31 after the immediately completed
prior fiscal year. In explanation of the previous sentence, any deferred
compensation to a supplemental retirement plan shall be paid, for fiscal
year 2022-23, no later than December 31, 2023. After the City Council
duly establishes and authorizes the maintaining of the supplemental
retirement plan, the City Council authorizes Employee or his designee(s)
to execute any documents necessary or proper to maintain the
supplemental retirement plan prior to any payment of deferred
compensation to Employee.
MISCELLANEOUS:
Except as specifically defined in this Amendment, all capitalized words and
phrases shall have the same meaning ascribed to them in the Original Agreement.
The Original Agreement and this Amendment shall constitute the entire
agreement between the parties. Except as expressly amended by this Amendment,
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all of the terms and conditions in the Original Agreement remain in full force and
effect.
If any provision, or any portion thereof, contained in this Amendment is held
unconstitutional, invalid or unenforceable, the remainder of this Amendment and the
Original Agreement, or portion thereof, shall be deemed severable, shall not be
affected, and shall remain in full force and effect.
This Amendment 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.
[signatures on next page]
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IN WITNESS WHEREOF, the City of La Quinta has caused this Amendment to
be signed and executed in its behalf by its Mayor, and duly attested by its City Clerk,
and the Employee has signed and executed this Agreement, both in duplicate, to
become effective as of the Amendment Effective Date.
ATTEST:
Monika Radeva, CITY CLER
City of La Quinta, California
(City Seal)
APPROVED AS TO FORM:
William H. Ihrke, CITY ATTORNEY
City of La Quinta, California
EMPLOYER:
CITY OF LA QUINTA
By:
LINDA EVANS
Mayor of the City of La Quinta
EMPLOYEE:
By:
Jo ► ' illen, an individual
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CONSENT CALENDAR ITEM NO. 6
City of La Quinta
CITY COUNCIL MEETING: October 4, 2022
STAFF REPORT
AGENDA TITLE: APPROVE FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
FOR THE CITY MANAGER
RECOMMENDATION
Approve First Amendment to Employment Agreement for the City Manager.
EXECUTIVE SUMMARI
• At its June 21, 2022 Regular Meeting, the Council approved City Manager
Jon McMillen's current employment agreement, effective July 1, 2022.
• The current agreement memorialized Council's decision to extend the
employment term for three years but kept in place, subject to future
revision, compensation provisions that were from the original
employment agreement, originally effective July 1, 2019.
• The proposed First Amendment to Employment Agreement (Agreement)
(Attachment 1) would modify the compensation provisions based on the
Council's favorable annual performance evaluation and comparable
salaries and benefits of other city managers in the Coachella Valley.
FISCAL 1M1'AL I
If the amendment is adopted, base salary for the current fiscal year would be
$250,000, and the City Manager would be deemed at Step 10 for purposes of
classification under the currently operative 2022/23 Salary Schedule for full
time management employees. In the following fiscal years, base salary would
be tied to step level for the city manager position pursuant to the 2022/23
Salary Schedule. Also, if the amendment is adopted, compensation would
include $30,000 in annual deferred compensation, subject to being paid to a
qualified retirement or supplemental retirement plan. The City Manager will
continue to receive the same fringe benefits as authorized for all City
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
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and two finalists after discussions in closed session with Council, a series of
interviews with candidates, and a thorough review of references, among other
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. At its June 21, 2022 Regular Meeting, the Council
approved a new employment agreement, effective July 1, 2022, for an
additional three-year term but kept in place, subject to future revision,
compensation provisions that were from the original employment agreement.
The proposed Amendment modifies the current agreement's base salary and
deferred compensation provisions as outlined in the Fiscal Impact above. The
modified compensation package brings the City Manager's base salary and
deferred compensation more in line with the 2022/23 Salary Schedule for the
City's full time management employees (Attachment 2) and comparable
salaries and benefits of other city managers in the Coachella Valley.
Except for the compensation provisions, no other modifications to the current
employment agreement are proposed.
ALTERNATIVES - None
Prepared by: Bill Ihrke, City Attorney
Approved by: Jon McMillen, City Manager
Attachments: 1. First Amendment to Employment Agreement for City
Manager
2. 2022/23 Salary Schedule (Full -Time Employees)
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