HomeMy WebLinkAboutStaff Report 14968
City of Palo Alto (ID # 14968)
City Council Staff Report
Meeting Date: 11/28/2022 Report Type: Action Items
City of Palo Alto Page 1
Title: Approval of Amendments to the Employment Agreements between the
City of Palo Alto and Council Appointed Officers, specifically the City
Manager, City Attorney and City Clerk
From: City Manager
Lead Department: Human Resources
Recommendation
Staff recommends that the City Council approve and authorize the Mayor to execute the
following contract amendments for Council Approved Officers:
1. Amendment No. 10 to Employment Agreement between the City of Palo Alto and
Molly S. Stump;
2. Amendment No. 4 to Employment Agreement between the City of Palo Alto and Ed
Shikada.
3. Amendment No. 1 to Employment Agreement between the City of Palo Alto and
Lesley Milton.
Background / Discussion
The City Council has completed annual merit reviews for Council Appointed Officers (CAOs)
for the prior fiscal year’s performance (FY2021/22). Staff has been directed by City Council to
forward amendments to employment agreements to implement merit- based increases to the
CAO’s annual salaries, effective July 1, 2022, as follows: City Attorney Molly S. Stump, merit
increase of 4% from $322,837 to $335,750 (Attachment A); City Manager Ed Shikada, merit
increase of 4% from $366,704 to $381,372 (Attachment B); and, City Clerk Lesley Milton merit
increase of 4% from $175,011 to $182,011 (Attachment C).
As appointed officers of the Council, the City Manager, City Attorney1 and City Clerk2 are
employed under employment agreements specifying that performance and salary are
evaluated annually. The following paragraph is the specific provision in the City Manager’s
employment agreement that addresses salary adjustments, and similar language exists in the
City Attorney’s employment agreement:
1 Previous Employment Agreements of the City Manager and City Attorney (PG 310)
2 Previous Employment Agreement for the City Clerk
City of Palo Alto Page 2
Salary Adjustments. Not less than once each year, the City Council shall meet for the
express purpose of evaluating the performance of Shikada and determining whether to
grant him an increase in annual base salary based on performance. The City Council will
act in good faith in determining whether to provide an increase based on performance,
but the ultimate decision in this regard is within the sole discretion of the City Council.
The Council may also adjust Shikada’s annual base salary due to labor market and/or
internal equity conditions.
For the FY22 performance evaluation period, City Council completed evaluations for the City
Manager, City Attorney and City Clerk. Council completed the evaluations with the assistance
of an outside consultant. The consultant, a principal with the firm MRG, is an expert in
Council-Appointee relations and facilitates CAO evaluations with many agencies throughout
California. The process includes surveys, 1-1 interviews, and facilitated closed session
discussions as appropriate under the Brown Act.
At the conclusion of the CAO evaluation process, Council directed staff to prepare amendments
reflecting a 4% increase to the salaries of the City Manager, City Attorney and City Clerk. The
amendments are attached to this staff report as exhibits. The 4% increase to the salary for City
Manager and City Attorney are the only changes to the agreements and all other terms and
conditions remain the same. However, the City Clerk’s contract amendment includes the 4%
salary increase and also $5000 to deferred compensation 401a plan.
Resource Impact
The additional cost for merit increases of approximately $40,000 for the CAO positions is
expected to be absorbed through savings in the respective departmental FY 2023 Adopted
Budgets.
Policy Implications (If Applicable)
No City policy implications.
Stakeholder Engagement
Employment agreements of local public agency executives are required to be voted on in open
session when change in salary or benefits is proposed to provide transparency for stakeholders.
Environmental Review
Approval of the CAO employment agreements does not require review under the California
Environmental Quality Act (“CEQA”) because the scope of work of these employment
agreements is not a project under CEQA.
Attachments:
• Attachment A: City Manager Amendment to Ed Shikada Employment Agreement No
4_TJH edits
• Attachment B: City Attorney Amendment to Molly Stump Agreement No Ten_TJH
edits_
City of Palo Alto Page 3
• Attachment C: City Clerk Amendment No One to Lesley Milton Employment
Agreement_TJH edits
1
AMENDMENT NO. THREE FOUR TO EMPLOYMENT AGREEMENT
BETWEEN
THE CITY OF PALO ALTO
AND
Edward Shikada
This AMENDMENT NO. Three Four to the EMPLOYMENT AGREEMENT(“Agreement”) is
entered into on December 13, 2021 November 28, 2022 by and between the CITY OF PALO ALTO, a
California chartered municipal corporation (“City”), and Edward Shikada (“Shikada”), an
individual, located at 250 Hamilton Avenue 7th Floor, Palo Alto, CA.
R E C I T A L S:
WHEREAS, the original EMPLOYMENT AGREEMENT between the City and Shikada, attached
hereto and incorporated herein as Exhibit “A” was entered between the parties for the services
of City Manager on or about September 18, 2018; and
WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated
herein as Exhibit “B” was entered between the parties on or about December 16, 2019; and
WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated
herein as Exhibit “C” was entered between the parties on or about June 22, 2020; and
WHEREAS, AMENDMENT NO. THREE to the Agreement, attached hereto and incorporated
herein as Exhibit “D” was entered between the parties on or about December 13, 2021; and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of
this Amendment, the parties agree:
SECTION 1. Section 4.1 of the Agreement, Initial Compensation, is hereby amended to read as
follows:
4.1. Compensation. Commencing on and continuing from the Employment Start Date,
Shikada will receive an initial base annual salary of Three Hundred Fifty‐Six Thousand Dollars
($356,000), prorated and paid on City's normal paydays. At the recommendation of the Palo
Alto City Council Appointed Officers Committee (CAO) and consistent with annual merit
practices, effective the first full pay period following July 1, 2022,1 Shikada will receive a base
annual salary of Three Hundred Sixty‐Six eighty‐one thousand Six three hundred and Eighty
seventy‐two dollars ($366,704 $381,372). This amount is subject to authorized or required
deductions and withholding, prorated and paid on City’s regular paydays. Shikada is an
exempt employee under applicable wage and hour law and his base salary shall be
compensation for all hours worked. The City agrees that the amount of Shikada’s base annual
salary will not decrease, except as part of the permanent decrease that is consistent with the
2
Fair Labor Standards Act.
SECTION 2. Except as herein modified, all other provisions of the Contract, including any
exhibits and subsequent amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this
Amendment on the date first above written.
Attest: City of Palo Alto
Approved as to form: Edward Shikada
Attachments:
EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND EDWARD SHIKADA
AMENDMENTS NO. ONE THROUGH NO. TWO THREE TO SHIKADA EMPLOYMENT AGREEMENT
1
AMENDMENT NO. NINE TEN TO EMPLOYMENT
AGREEMENT BETWEEN THE CITY OF PALO ALTO
AND
MOLLY S. STUMP
This AMENDMENT NO. TEN to the EMPLOYMENT
AGREEMENT(“Agreement”) is entered into on November 28, 2022 by and between the
CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and
MOLLY S. STUMP (“Stump”), an individual, located at 250 Hamilton Avenue 8th Floor,
Palo Alto, CA.
R E C I T A L S:
WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo
Alto and Molly S. Stump., attached hereto and incorporated herein as Exhibit “A” was entered
into between the parties for the services of City Attorney on or about April 18, 2011; and
WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and
incorporated herein as Exhibit “B” was entered into between the parties on or about March
24, 2014; and
WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and
incorporated herein as Exhibit “C” was entered into between the parties on or about
December 8, 2014; and
WHEREAS, AMENDMENT NO. THREE to the Agreement, attached hereto and
incorporated herein as Exhibit “D” was entered into between the parties on or about
February 1, 2016; and
WHEREAS, AMENDMENT NO. FOUR to the Agreement, attached hereto and
incorporated herein as Exhibit “E” was entered into between the parties on or about
December 12, 2016; and
WHEREAS, AMENDMENT NO. FIVE to the Agreement, attached hereto and
incorporated herein as Exhibit “F” was entered into between the parties on or about
November 6, 2017; and
WHEREAS, AMENDMENT NO. SIX to the Agreement, attached hereto and
incorporated herein as Exhibit “G” was entered into between the parties on or about
December 17, 2018; and
WHEREAS, AMENDMENT NO. SEVEN to the Agreement, attached hereto and
incorporated herein as Exhibit “H” was entered into between the parties on or about
December 17, 2019; and
WHEREAS, AMENDMENT NO. EIGHT to the Agreement, attached hereto and
incorporated herein as Exhibit “I” was entered into between the parties on or about June 22,
2020; and
2
WHEREAS, AMENDMENT NO. NINE to the Agreement, attached hereto and
incorporated herein as Exhibit “J” was entered into between the parties on or about
December 13, 2021; and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
SECTION 1: Section 3.1 of the Agreement, Compensation, is hereby amended to
read as follows:
At the recommendation of the Palo Alto City Council Appointed Officers Committee
(CAO) and consistent with annual merit practices, effective the first full pay period
following July 1, 2022, Stump will receive a base annual salary of Three Hundred
Thirty-Five Thousand Seven-Hundred Fifty dollars ($335,750), paid on City’s normal
paydays. Stump’s annual base salary shall remain at Three Hundred Thirteen Thousand
Four Hundred and Fourteen and No/100 Dollars ($313,414), prorated and paid on City’s
regular paydays. Stump shall be an exempt employee under applicable wage and hour law
and her base salary shall be compensation for all hours worked. City agrees that the
amount of Stump's base annual salary shall not decrease, except as part of a permanent
decrease that is consistent with the Fair Labor Standards Act and that is applicable to
either all Council Appointed Officers or all City Executive Staff (which includes all
Council Appointed Officers). At the recommendation of the CAO committee and
consistent with annual merit practices, effective the first full pay period following July
1, 2021 Stump will receive a base annual salary of Three Hundred Twenty‐Two
Thousand Eight hundred and Seventeen dollars ($322,837), paid on City’s normal
paydays.
SECTION 2. Except as herein modified, all other provisions of the Contract,
including any exhibits and subsequent amendments thereto, shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have by their duly authorized
representatives executed this Amendment on the date first above written.
Attest: City of Palo Alto
Approved as to form: Molly S. Stump
3
Attachments:
EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY
S. STUMP AMENDMENTS NO. ONE THROUGH NO. EIGHT NINE.
1
AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT
BETWEEN THE CITY OF PALO ALTO AND
LESLEY MILTON
This AMENDMENT NO. ONE to the EMPLOYMENT AGREEMENT
(“Agreement”) is entered into on November 28, 2022 by and between the CITY OF PALO ALTO,
a California chartered municipal corporation (“City”), and LESLEY MILTON (“Milton”), an
individual, located at 250 Hamilton Avenue 7th Floor, Palo Alto, CA.
R E C I T A L S:
WHEREAS, the original EMPLOYMENT AGREEMENT between the City of
Palo Alto and Lesley Milton, attached hereto and incorporated herein as Exhibit “A” was entered
into between the parties for the services of City Clerk on or about July 26, 2021; and
WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and
incorporated herein as Attachment “C” was entered into between the parties on or about November
28, 2022; and
WHEREAS, the parties wish to amend the Agreement.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
SECTION 1: Section 3 of the Agreement, Salary, is hereby amended to read as
follows:
Commencing on and continuing from the pay period including July 1, 2022,
Milton’s annual base salary shall be increased from $175,011 to $182,011, prorated
and paid on City’s regular paydays. This amount is subject to authorized or
required deductions and withholding, prorated and paid on City’s regular paydays.
Milton is an exempt employee under applicable wage and hour law and her base
salary shall be compensation for all hours worked. The City agrees that the amount
of Milton’s base annual salary will not decrease, except as part of the permanent
decrease that is consistent with the Fair Labor Standards Act.
SECTION 2. Additional Benefits and Allowances. In addition to the benefits
specified in section 5, Milton will receive the following additional benefits and
allowances:
5.1.4 - 401(a) Defined Contribution Retirement Plan. City will contribute Five Thousand
Dollars ($5,000) annually, prorated and contributed on the City's normal paydays, to a
401(a) retirement plan account established for Milton.
5.1.4 Milton will make any additional contributions required under the plan, if any, and
may make additional voluntary contributions, if permitted.
2
SECTION 3. Except as herein modified, all other provisions of the Contract, including
any exhibits and subsequent amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly authorized representatives
executed this Amendment on the date first above written.
ATTEST:
_____________________________
Deputy City Clerk
APPROVED AS TO FORM:
_____________________________
City Attorney
CITY OF PALO ALTO
___________________________
Mayor
Dated:_____________________
LESLEY MILTON
__________________________
Dated:____________________
Attachments:
EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO
AND LESLEY MILTON