HomeMy WebLinkAboutStaff Report 2311-221310.Approval of Amendments to the Employment Agreements between the City of Palo Alto
and Council Appointed Officers, specifically the City Manager, and City Attorney and
Adoption of Amended Resolution Amending Appointment Term for Interim City Clerk
through March 31, 2024 and salary adjustment. CEQA Status - Not a
Project Supplemental Memo Added
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City Council
Staff Report
From: COUNCIL APPOINTED OFFICERS COMMITTEE
Report Type: ACTION ITEMS
Lead Department: Human Resources
Meeting Date: December 11, 2023
Report #:2311-2213
TITLE
Approval of Amendments to the Employment Agreements between the City of Palo Alto and
Council Appointed Officers, specifically the City Manager, and City Attorney and Adoption of
Amended Resolution Amending Appointment Term for Interim City Clerk through March 31,
2024 and salary adjustment. CEQA Status - Not a Project
RECOMMENDATION
Staff recommends that the City Council approve and authorize the Mayor to execute the
following contract amendments for Council Approved Officers and Adoption of Amended
Resolution Amending Appointment Term for Interim City Clerk:
1. Amendment No. 11 to Employment Agreement between the City of Palo Alto and Molly
S. Stump (Attachment A);
2. Amendment No. 5 to Employment Agreement between the City of Palo Alto and Ed
Shikada (Attachment B); and
3. Amendment to Resolution Amending Appointment Term for Interim City Clerk through
March 31, 2024, and salary adjustment in alignment with increase for all unrepresented
Management and Professional employees (Attachment C)
BACKGROUND / DISCUSSION
The City Council has completed annual merit reviews for Council Appointed Officers (CAOs):
City Attorney Molly S. Stump and City Manager Ed Shikada for the prior fiscal year’s
performance (FY 2023).
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 7% from $335,750 to $359,258
(Attachment A);
•City Manager Ed Shikada, merit increase of 7% from $381,372 to $408,096 (Attachment
B).
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As appointed officers of the Council, the City Attorney and City Manager1 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:
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.
The City Attorney’s employment agreement contains a similar provision.
For the FY 2023 performance evaluation period, City Council completed evaluations for the City
Manager, and City Attorney. Council completed the evaluations with the assistance of an
outside consultant. The consultant, a professional with the firm MRG, 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 7% increase to the salaries of the City Attorney and the City Manager, amendments
are attached to this staff report as exhibits. The 7% increase to the salary the only changes to
the agreements and all other terms and conditions remain the same.
Resolution Amending Appointment Term for City Clerk and Salary Adjustment
City Clerk Lesley Milton provided the City Council notice that she was resigning effective May
19, 2023 to take a new opportunity at another California city. On May 1, 2023, the Council
Appointed Officers (CAO) Committee met to discuss a recommendation to the City Council
regarding the City Clerk vacancy. On May 22, 2023 the City Council interviewed one candidate
followed by their request to HR Director to take steps to have Mahealani Ah Yun appointed as
the Interim City Clerk through December 1, 2023 or until the formal executive recruitment is
completed, whichever is sooner. (Attachment C).
The executive recruitment is still in process. The posting for this recruitment was opened in
September 2023 and closed on October 22, 2023. The City Council is in process of scheduling
formal interviews. Since the recruitment process is not complete it is necessary to amend the
1 Previous Employment Agreements of the City Attorney and the City Manager (Pg. 109)
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appointment term and extend the interim appointment through March 31, 2024 or until the
formal executive recruitment is completed, whichever is sooner.
In addition, the amendment to the contract includes a 4% salary increase, the same increase
received by the Unrepresented Management and Professional employees. This salary increase
will be paid retroactive to July 1, 2023, consistent with the Unrepresented Management and
Professional employees unit, and will result in an annual salary of $126,152 .
FISCAL/RESOURCE IMPACT
The additional cost for CAO salary increases of approximately $55,800 for the CAO positions is
expected to be funded in the respective departmental FY 2024 Adopted Budgets as these
adjustments are in alignment with unrepresented management professional wage
assumptions. Staff will incorporate these changes ongoing in the development of the FY 2025
Proposed Budget.
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
Council action on this item is not a project as defined by the California Environmental Quality
Act (CEQA) in that the amendments to the employment agreements are personnel-related
actions. CEQA Guidelines Section 15378(b)(2).
ATTACHMENTS
Attachment A: Amendment No. 11 to the Employment Agreement between the City of
Palo Alto and Molly Stump
Attachment B: Amendment No. 5 to the Employment Agreement between the City of
Palo Alto and Edward Shikada
Attachment C: Amendment to Resolution Amending Appointment Term for Mahealani
Ah Yun as the Palo Alto Interim City Clerk
APPROVED BY:
Sandra Blanch, Human Resources Director
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AMENDMENT NO. ELEVENTEN TO EMPLOYMENT
AGREEMENT BETWEEN THE CITY OF PALO ALTO
AND
MOLLY S. STUMP
This AMENDMENT NO. ELEVENTEN to the EMPLOYMENT
AGREEMENT(“Agreement”) is entered into on December 11, 2023 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
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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, AMENDMENT NO. TEN to the Agreement, attached hereto and
incorporated herein as Exhibit “K” 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 3.1 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, 20232, Stump will receive a base annual salary of Three Hundred
Fifty Nine Thousand Two Hundred and Fifty EightThirty-Five Thousand Seven-
Hundred Fifty dollars ($359,25835,750), paid on City’s normal 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).
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
Attachments:
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EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY
S. STUMP AMENDMENTS NO. ONE THROUGH NO. TENNINE.
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AMENDMENT NO. FIVEFOUR TO EMPLOYMENT AGREEMENT
BETWEEN
THE CITY OF PALO ALTO
AND
EDWARD SHIKADA
This AMENDMENT NO. FIVEFour to the EMPLOYMENT AGREEMENT
(“Agreement”) is entered into on, December 11, 2023November 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, AMENDMENT NO. Four to the Agreement, attached hereto and
incorporated herein as Exhibit “E” was entered 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 4.1 of the Agreement, Initial Compensation, is hereby amended to
read as follows:
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4.1. Compensation. 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, 20232, Shikada will receive a base annual salary
of Four Hundred Eight Thousand and Ninety SixThree Hundred eighty-one thousand
three hundred and seventy-two dollars ($408,096381,372). 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 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
City Clerk Mayor
APPROVED AS TO FORM: EDWARD SHIKADA
City Attorney
Attachments:
EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO
ALTO AND EDWARD SHIKADA
EXHIBIT B: AMENDMENTS NO. ONE THROUGH NO. FOURTHREE TO
SHIKADA EMPLOYMENT AGREEMENT
NOT YET APPROVED
Resolution No.
A Resolution of the City Council for the City of Palo Alto Amending
Appointing Appointment Term for Mahealani Ah Yun as the Palo
Alto Interim City Clerk.
R E C I T A L S
A. The Palo Alto City Charter specifies the duties and functions of the City Clerk for the
City of Palo Alto;
B. The Charter further specifies that the City Council shall appoint the City Clerk;
C. The Council received notification that City Clerk Lesley Milton was resigning
effective May 19, 2023;
D. The Council approved the Council Appointed Officers Committee recommendation to
direct staff to initiate an internal recruitment for interim City Clerk by posting position;
E.The Council, on June 5, 2023, appointed Mahealani Ah Yun, as interim City Clerk for
the City of Palo Alto for a term ending December 1, 2023 or upon completion of the
formal executive recruitment;
E.F.The executive recruitment is in progress, however not complete requiring an extension
of the appointment term through March 31, 2023 or upon completion of the executive
recruitment process.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council hereby extends the appointment of Mahealani Ah Yun, as
interim City Clerk for the City of Palo Alto;
SECTION 2. Mahealani Ah Yun shall serve as interim City Clerk at the will of the Council
as provided by the Charter, and shall further serve according to all of the terms and provisions
of the Charter and the Municipal Code; and
SECTION 3. This resolution shall be effective immediately. The appointment of
Mahealani Ah Yun as interim City Clerk shall end on December March 31, 2023 2024 or on the
completion of the formal executive recruitment, including any amendment, extension or
termination approved by the Council, whichever is sooner.
INTRODUCED AND PASSED: June 5, 2023
AYES:BURT, KOU, LAUING, LYTHCOTT-HAIMS, STONE, TANAKA, VEENKER
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager
10.Supplemental Memo - Approval of Amendments to the Employment Agreements
between the City of Palo Alto and Council Appointed Officers, specifically the City
Manager, and City Attorney and Adoption of Amended Resolution Amending
Appointment Term for Interim City Clerk through March 31, 2024 and salary adjustment.
CEQA Status - Not a Project
City Council
Supplemental Report
From: Sandra Blanch, Human Resources Director
Meeting Date: December 11, 2023
Item Number: 10
Report #:2312-2310
TITLE
Supplemental Memo - Approval of Amendments to the Employment Agreements between the
City of Palo Alto and Council Appointed Officers, specifically the City Manager, and City
Attorney and Adoption of Amended Resolution Amending Appointment Term for Interim City
Clerk through March 31, 2024 and salary adjustment. CEQA Status - Not a Project
RECOMMENDATION
This report provides supplemental information including a corrected Attachment C. No change
to the staff recommendation in the agenda item staff report is included.
DISCUSSION
The posted staff report or Item 101 on the December 11, 2024 City Council agenda contained
two typographical errors and this supplemental report corrects for those errors:
•The effective date of the merit-based increases to the CAO annual salaries is effective
July 1, 2023 (not 2022 as stated in the posted Staff Report.)
•Attachment C also contained a typographical error. In F. the extension of the
appointment term is through March 31, 2024 (not 2023 as previously stated.) A revision
is attached with correction and supersedes the posted report.
ATTACHMENTS
Attachment C: Revised Amendment to Resolution Amending Appointment Term for Mahealani
Ah Yun as the Palo Alto Interim City Clerk
APPROVED BY:
Sandra Blanch, Human Resources Director
1 City Council, December 11, 2024 Agenda Item #10,
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=3568&meetingTemplateType=2&comp
iledMeetingDocumentId=8578
NOT YET APPROVED
Resolution No.
A Resolution of the City Council for the City of Palo Alto Amending
Appointing Appointment Term for Mahealani Ah Yun as the Palo
Alto Interim City Clerk.
R E C I T A L S
A. The Palo Alto City Charter specifies the duties and functions of the City Clerk for the
City of Palo Alto;
B. The Charter further specifies that the City Council shall appoint the City Clerk;
C. The Council received notification that City Clerk Lesley Milton was resigning
effective May 19, 2023;
D. The Council approved the Council Appointed Officers Committee recommendation to
direct staff to initiate an internal recruitment for interim City Clerk by posting position;
E.The Council, on June 5, 2023, appointed Mahealani Ah Yun, as interim City Clerk for
the City of Palo Alto for a term ending December 1, 2023 or upon completion of the
formal executive recruitment;
E.F.The executive recruitment is in progress, however not complete requiring an extension
of the appointment term through March 31, 2024 or upon completion of the executive
recruitment process.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council hereby extends the appointment of Mahealani Ah Yun, as
interim City Clerk for the City of Palo Alto;
SECTION 2. Mahealani Ah Yun shall serve as interim City Clerk at the will of the Council
as provided by the Charter, and shall further serve according to all of the terms and provisions
of the Charter and the Municipal Code; and
SECTION 3. This resolution shall be effective immediately. The appointment of
Mahealani Ah Yun as interim City Clerk shall end on December March 31, 2023 2024 or on the
completion of the formal executive recruitment, including any amendment, extension or
termination approved by the Council, whichever is sooner.
INTRODUCED AND PASSED: June 5, 2023
AYES:BURT, KOU, LAUING, LYTHCOTT-HAIMS, STONE, TANAKA, VEENKER
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager