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HomeMy WebLinkAboutStaff Report 382-06City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 7 FROM:CITY MANAGER DEPARTMENT: City Manager’s Office DATE:OCTOBER 10, 2006 CMR:382:06 SUBJECT:CONFIRMATION OF APPOINTMENT OF VALERIE FONG AS UTILITES DIRECTOR AND APPROVAL OF EMPLOYMENT AGREEMENT RECOMMENDATION The City Manager recommends that the City Council confirm the appointment of Valerie Fong as the City of Palo Alto Utilities Director and approve her employment agreement (Attachment 1). BACKGROUND Municipal Code Section 2.08.020 requires that the City Council confirm the City Manager’s appointment of City department heads. DISCUSSION After an exhaustive, nationwide search, Valerie Fong has been selected to serve as Palo Alto’s Utilities Director. Valerie is currently the General Manager of Alameda Power and Telecom (AP&T), where she has been since July 2002. In addition to directing the strategizing and planning for electric and telecommunications services, she oversees design, engineering, construction, maintenance and operations of Alameda’s facilities and businesses, negotiates and administers contracts, and oversees the design of electric and telecom rates. Prior to becoming General Manager at AP&T, Val had 12 years of experience with PG&E, including overseeing and capital and expense programs across the utility and overseeing all gas and electric commodity transactions for PG&E’s full-service customers. Val will serve as an at-will employee, congruent with the City Manager’s direction that all new City departments heads shall be so designated. RESOURCE IMPACT CMR:382:06 Page 1 of 2 The current control point for the Utilities Director position is $187,678; Ms. Fong shall be considered for a control point adjustment in 2006, should the Council approve one for management and professional staff. Ms. Fong will be entitled to a pro-rated Variable Management Compensation award in 2006, based on her achievement of performance objectives set with the City Manager. In addition to all regular benefits for a manager and department head, Ms. Fong will be provided with 80 hours of sick leave upon employment which will accrue at the rate of 96 hours per year. She will be credited with 120 hours of vacation leave immediately, which will accrue at the rate of 160 hoursper year. Ms. Fong is entitled to all relocation assistance consistent with the Management and Professional Compensation Plan if she decides to exercise this option within 18 months of the effective date of the employment agreement. If she is asked to resign as Director of Utilities, Ms. Fong is entitled to 6 months of salary and the equivalent cash value of her non-salary benefits. POLICY IMPLICATIONS This recommendation is consistent with existing City policies. ATTACHMENT 1: Employment Agreement between the City of Palo Alto and Valerie Fong PREPARED BY Emily’4H~risdn~-Assl’~tan~-City Manager CITY MANAGER APPROVAL City Manager CMR:382:06 Page 2 of 2 Attachment 1 EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND VALERIE FONG THIS AGREEMENT is between the City of Palo Alto, a municipal corporation and chartered city ("City"), and Valerie Fong, its Director of Utilities with .the City ~of Palo Alto ("Fong"). It is effective on the latest date next to the signatures on the last page. This Agreement is entered into on the basis of the following facts, among others: A. City, acting by and through its duly appointed City Manager and with the approval of its duly elected City Council, desires to employ’ Fong as its Director of Utilities with the City of Palo Alto subject to the terms, and conditions set forth in this Agreement, the Palo Alto Municipal Code and in the Charter of the City of Palo Alto (the ~Charter"). B. Fong desires to be employed by the City as its. Director of Utilities with the City of Palo Alto, subject to the . terms and conditions set forth in this Agreement, the Palo Alto Municipal Code, and in the Charter. C. City and Fong desire to establish specific terms and .condit£ons relating to compensation and benefits, performance evaluations, and related matters.. D. Notwithstanding any provision of the City of Palo Alto Merit System Rules and Regulations, the City desires Fong to serve on an at-will basis, with no expectation of continued employment, and with no right to pre-or post-separation due process of appeal. E. Fong desires a predictable amount of severance notice and severance pay. should her employment be terminated with or without cause or notice. FOLLOWS: BASED UPON THE FOREGOING, CITY AND FONG AGREE AS i. Employment.City will appoint and employ Fong as Director of Utilities with the City of Palo Alto and Fong will accept theappointment and employment with the City for an indefinite term beginning on October 16, 2006. 2. Duties of Director of Utilities. Fong shall perform the duties established for the Director of Utilities by the Charter, Palo Alto Municipal Code, direction of the City Manager, or as otherwise provided by law, ordinance, or regulation. 2.1. Full Energy and Skill. Fong shall devote her full energy, skill, ability, and productive time to the performance of her duties. 2.2. No Conflict. Fong shall not engage in any employment, activity, consulting service, or other enterprise, for compensation or~ otherwise, which is actually or potentially in conflict with, inimical to, or which interferes with the performance of her duties. Fong acknowledges that she is subject to the various ~onflict of interest requirements found in the California Government Code and State and local policies and regulations. 2.3. Permission Required For Outside Activities. Fong shall not engage in any employment, activity, .consulting - service, or other enterprise, for compensation or otherwise, without the express, written permission of the City Manager. 3. Compensation. While performing the duties of Director of Utilities, Fong shall be compensated as provided in this Section 3. 3.1. Compensation. Fong shall receive an initial base annual salary of one hundred eighty-seven thousand six hundred seventy-eight dollars ($187,678.00) commencing on October 16, 2006. 3.2. Salary Adjustments. Not less than once each year, £he City Manager shall meet with Fong for the express purpose of evaluating the performance of Fong. The City Manager will act in good faith in determining whether to increase the~ salary of Fong, but the ultimate decision in this. regard is within the sole discretion of the City Manager. 3.3. Variable Management Compensation.Fong shall be entitled to receive Variable Management Compensation ("VMC") pursuant to the terms of the City Council-approved Management Compensation Plan. Notwithstanding the terms of the Management Compensation Plan, Fong shall be eligible to receive Variable Management Compensation during her first year of employment, 060919 cs 8260321 -2- fiscal year 2006-2007, and any applicable VMC shall be prorated for that period based upon Fong’s starting date of employment, October 16, 2006° On or about October 16, 2006, Fong shall meet with the City Manager and/or his designee for the purpose, of establishing performance objectives for the 2006-2007 VMC period. 4. Regular Benefits and Allowances. Fong will be eligible for, and shall receive, all regular benefits (i.e., health insurance, PERS contribution paid by City, etc.), and vacation, sick leave, and management leave as are generally provided to management .employees pursuant to the City Council- approved Management Compensation Plan. 5. Additional Benefits and Allowances. In addition to the benefits specified in section 4, Fong shall receive the following additional benefits and allowances. 5.1 Automobile Allowance. Pursuant to the terms in the Management Compensation plan in effect on the execution date of this Agreement, Fong shall receive a $325 monthly automobile allowance.In the event that the automobile ~allowance provision in the Management Compensation Plan is amended, Fong shal! receive the amended amount for automobile allowance. 5.2 Sick Leave Balance Upon Start of Employment. Fong shall be credited with eighty (80) hours of sick leave immediately upon the start of employment based upon her service with a prior employer. Fong will also accrue additional sick leave on a hi-weekly basis at the rate of ninety six (96) hours per year. 5.3 Vacation Leave. Fong shall be credited with one hundred twenty (120) hours of vacation leave immediately upon the start of employment based on her service with a prior employer. Fong ~will also accrue on a bi-weekly basis an additional one hundred sixty (160) hours of vacation per year based upon her service with a prior employer. 5°4° Relocation Assistance. Fong shall receive full reimbursement, for relocation expenses consistent with the ~Management and Professional Personnel. and Council Appointees Compensation Plan" under ~Basic Benefits for Council-Appointed Officers, Assistant City Manager and Department Heads." Notwithstanding any provision in the Plan, Fong shall be entitled to receive the relocation assistance within eighteen (18) months from the effective date of this agreement, provided 060919 cs 8260321 -3- Fong’s actual relocation occurs during that period. eighteen-month 6. Additional Expenses of Employment. City shall pay the following usual and customary employment expenses: 6.1. The cost of any fidelity or other bonds required by law for the Director of Utilities. 7. Duration of Employment. Fong understands and agrees that she has no constitutionally protected property or other interest in her employment as Director of Utilities. She understands that notwithstanding any provision in the Merit System Rules and Regulations, she has no right to pre-or post- disciplinary due process. She understands and agrees that she works at the will and pleasure of the City Manager and that she may be terminated, or asked to resign, at any time, with or without cause, upon 30 days written notice to Fong. Fong may terminate this agreement upon 30 days written notice to the City Manager. 7.1. Severance Pay. If Fong is asked to resign or is terminated as Director of Utilities, she shall receive a cash payment, or payments (without interest) at intervals specified by Fong, equivalent to the sum Of her then-current monthly salary, multiplied by six (6), and the cash value, as reasonably determined by City, of her monthly non-salary benefits multiplied by six (6). The monthly non-salary benefits shall be those specified in section 4 of this agreement. All normal withholdings shall be made with respect to any amounts paid .under this section, as required by law. 8.Miscellaneous. 8.1. Notices. Notices given under this Agreement shall be in writing and shall be either: a) served personally; or b) sent by facsimile (provided a hard copy is mailed within one (i) business day); or c) delivered by first-class United States mail, certified, with postage prepaid and a return receipt requested;or d) sent by Federal Express, or some equivalent, pribate mail delivery service. Notices shall be deemed received at the earlier of actual receipt or three (3) days following deposit in the United States mail, postage prepaid. Notices shall be directed to the addresses shown below, prowided that a party may change such party’s address for notice by giving written notice to the other party in accordance with this subsection. 060919 cs 8260321 -4- CITY: Attn: City Manager Cityof Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Phone: (650) 329-2563 FAX: (650) 325-5025 DIRECTOR OF UTILITIES: Valerie Fong c/o City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Phone: 650-329-2376 Fax: 650-329-2696 8.2. Entire Agreement/Amendment. This Agreement --constitutes the entire understanding and agreement between the parties as to those matters contained in it, and supersedes any and all prior or contemporaneous agreements, representations and understandings of the parties. This Agreement may be amended at any time by mutual agreement of the parties, but any such amendment must be in writing, dated, and signed by the parties and attached hereto. 8.3. Applicable Law and Venue. This Agreement shall be interpreted according to the laws of the State of California. Venue of any action regarding this Agreement shall be in the proper court in Santa Clara County. 8.4. Severability. In the event any portion of this Agreement is declared void, such portion shall be severed from this Agreement and the remaining provisions shall remain in effect, unless the result of such severance- would be to substantially alter this Agreement or the obligations of the parties, in which case this Agreement shall be immediately terminated. 8.5. Waiver. Any failure of a party to insist upon strict compliance with any term, undertaking, or condition of this Agreement shall not be deemed to be a waiver of such term, undertaking, or condition. To be effective, a waiver must be in writing,, signed and dated by the parties. 8.6. Representation by Counsel. " Fong and City acknowledge that they each did, or had the opportunity to, 060919 es 826032 -5- consult with legal counsel of their respective choices with respect to the matters that are the subject of this Agreement prior to executing it. 8.7 Section Headings. The headings on each of the sections and subsections of this Agreement are for the convenience of the parties only and do not limit or expand the contents of any such section or subsection. Dated:CITY OF PALO ALTO By City Manager Dated:DIRECTOR OF UTILITIES Approved as to Form: By : Gary M. Baum City Attorney 060919 es 8260321 -6-