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05/01/2012 04E City Finance Director Contract with Cindy Epperson; Severance Compensation ('''''''. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: May 1, 2012 ITEM TITLE: Resolution approving the Interim City Manager's agreement to a special employment contract term between Cindy Epperson and the City providing for severance compensation as part of the employment agreement, thereby formalizing the appointment of Cindy Epperson as the new City Finance Director. SUBMITTED BY: Jeff Cutter, City Attorney CONTACT Jeff Cutter /509- 575 -6030 PERSON/TELEPHONE: SUMMARY EXPLANATION: The Interim City Manager Michael Morales has selected Cindy Epperson to become the City's new Finance Director and seeks the Council's approval of a reasonable severance agreement with Ms. Epperson as represented by the terms of the Employment Agreement attached hereto and incorporated herein by this reference. City ordinances do not presently provide for severance terms in a City employee's employment agreement. Therefore, approval of a severance provision requires specific City Council authorization. Resolution X Ordinance Other (specify) Contract: X Mail to: Contract Term: Amount: Expiration Date: Insurance Required? No Funding Source: Phone: APPROVED FOR C Manager SUBMITTAL: STAFF RECOMMENDATION: Adopt Resolution. BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download - 0 Epperson- Finance Manager Special Contract Provisions 2012 0 Employment agreement RESOLUTION NO. R -2012- A RESOLUTION approving the Interim City Manager's agreement to a special employment contract term providing for severance compensation as part of the employment agreement between Cindy Epperson and the City thereby formalizing the appointment of Cindy Epperson as the new City Finance Director. WHEREAS, Cindy Epperson has been selected by Michael Morales, Interim City Manager, to become the City's new Finance Director; and WHEREAS, the Interim City Manager has negotiated with Cindy Epperson on the terms of her employment with the City and has reached agreement on those terms; and WHEREAS, the Interim City Manager finds it to be appropriate to approve a reasonable severance agreement with Cindy Epperson as represented by the terms of the Employment Agreement attached hereto and incorporated herein by this reference if Ms. Epperson's position was to be terminated by the City without cause; and WHEREAS, City ordinances do not presently provide for severance terms in a City employee's employment agreement and therefore approval of a severance provision requires specific City Council authorization; and WHEREAS, in order to accommodate this severance provision Interim City Manager Michael Morales has requested the City Council's approval of said provision; and WHEREAS, the City Council finds it to be in the best interest of the City to approve the severance terms set forth in the attached Finance Director Employment Agreement; Now, Therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The Interim City Manager of the City of Yakima is hereby authorized to include in the City Finance Director's Employment Agreement the provision for severance compensation that is part of the attached and incorporated City Finance Director Employment Agreement between the City and Cindy Epperson, and finds the severance terms to be a reasonable and appropriate provision of said employment agreement. ADOPTED BY THE CITY COUNCIL this 1 day of May, 2012. ATTEST: Micah Cawley, Mayor City Clerk EMPLOYMENT AGREEMENT FOR FINANCE DIRECTOR OF THE CITY OF YAKIMA THIS EMPLOYMENT AGREEMENT (hereafter referred to as "Agreement "), is by and between the City of Yakima, Washington, a Washington municipal corporation (hereafter referred to as "City "), and Cindy (hereafter referred to by name, as "Finance Director ", or as "employee "). WHEREAS, pursuant to RCW 35.18.060, Yakima Municipal Code ( "YMC ") 1.18.010, and Article II of the City Charter of the City of Yakima (hereafter referred to as the "City Charter "), the City Manager of the City of Yakima desires to employ Cindy Epperson as Finance Director of the City of Yakima; and WHEREAS, the City desires to provide for certain benefits and compensation for the Finance Director and to establish conditions of employment applicable to the Finance Director; and WHEREAS, Cindy Epperson desires to accept employment as Finance Director of the City of Yakima under the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual promises as set forth in this Agreement, the parties agree as follows: Section 1. Employment and Duties. A. Cindy Epperson is appointed as Finance Director effective on the date provided in Section 2 and under the terms of this Agreement, and Cindy Epperson agrees to accept employment with the City in the position of Finance Director. The Finance Director shall have the duties, responsibilities and powers of said office as set forth in the City of Yakima Class Specification for Finance Director, attached as Exhibit A, as well as those set forth under Washington law, the Yakima Municipal Code and the City Charter. She shall perform such other legally permissible and proper duties and functions as the City Manager shall from time to time assign. The Finance Director shall follow the City of Yakima administrative policies and procedures. The Finance Director agrees to perform all duties and responsibilities faithfully, industriously, and to the best of her ability and in a professional and competent manner. B. The Finance Director shall remain in the exclusive employ of the City and shall devote all such time, attention, knowledge and skills necessary to faithfully perform her duties under this Agreement. The Finance Director may, however, engage in educational and professional activities upon receipt of approval by the City Manager, provided that such activities shall not interfere with her primary obligation to the City 1 of 10 as its Finance Director. The Finance Director shall dedicate no less than an average of forty (40) hours per week, in the performance of her duties hereunder. C. If the Finance Director serves on any appointed boards or elected boards of any professional organization, or serves on any committees related to her professional activities, in the event any monies are paid, or gifts received by the Finance Director related to such service, such money or property shall be paid over to or delivered to the City, unless otherwise provided by the City Manager. Section 2. Duration of Agreement. A. The City's employment of Cindy Epperson as the Finance Director of the City of Yakima is effective_on April 20, 2012. B. The Finance Director shall serve at the pleasure of the City Manager and shall be an at -will contractual employee of the City of Yakima, and Cindy Epperson waives any rights to a pre - termination hearing or post - termination hearing in the event of discipline of termination. Nothing in this Agreement shall prevent, limit, or otherwise interfere with the right of the City Manager to terminate the employment of the Finance Director at any time, without or with cause. C. The duration of this Agreement will be for a period of two (2) years, commencing on April 20, 2012, and continuing until April 19, 2014; provided, however, that the parties recognize that the Finance Director is an at -will employee whose employment may be terminated at any time, without or with cause. D. Extension of Agreement. In the event either party to this Agreement does not give written notice to the other party three (3) months prior to the expiration date, this Agreement shall be extended for two (2) years on the same terms and conditions as set forth in this Agreement. The Agreement shall continue thereafter for two -year periods, unless either party provides written notice to the other party three (3) months prior to the expiration date of the current period of the Agreement. This section is subject to the recognition of the parties that the Finance Director is an at -will employee whose employment may be terminated at any time, without or with cause. Section 3. Yakima Municipal Code. The references to the Yakima Municipal Code ( "YMC ") sections in this Agreement are to the Yakima Municipal Code as it currently exists, or as it may be amended in the future. Section 4. Salary. A. For the performance of services pursuant to this Agreement, the City agrees to pay the Finance Director an annual base salary as set forth in the 2011 Master Ordinance for pay for the Finance Director position at Step E (YMC Ordinance No. 2011 -35), which Page 2 of 10 is $115,728.96 per year, payable in installments at the same time as other City employees are paid. B. After the first year of the contract, should the management employees receive pay and compensation adjustments pursuant to YMC 2.20.115 -.116, the Finance Director will receive the same increase pursuant to the YMC. C. The City Manager may also increase said base salary and /or other benefits of the Finance Director in such amounts and to such an extent as the City Manager may determine desirable on the basis of an annual performance evaluation of the Finance Director, subject to the approval by the City Council of the pay increase pursuant to a modification of the Pay Master Ordinance passed by the City Council. D. Nothing in this Section shall require the City to increase the base salary or other benefits of the Finance Director. E. The Finance Director acknowledges that, pursuant to the Fair Labor Standards Act (FLSA), the Finance Director qualifies for the professional employee exemption. As an exempt employee, the Finance Director is paid a monthly salary and is not subject to overtime compensation. Section 5. Performance Criteria and Evaluations. A. At least annually, the City Manager shall meet with the Finance Director to establish performance standards, departmental goals and criteria for a performance evaluation. Between March 15 and April 15 each year, the City Manager shall in accordance with the criteria previously established, review and evaluate the performance of the employee. B. The City Manager shall provide the employee with a written performance evaluation and shall provide an opportunity for the employee to discuss the contents of it with the City Manager for the purpose of advancing the overall effectiveness of the Finance Director in her position. Such evaluation shall be in such form as the City Manager deems appropriate and shall be made at a time between March 1 and April 30 of each year in which this Agreement is effective. C. The City Manager shall provide the employee with periodic written performance evaluations a minimum of one time during her first 180 days of employment as Finance Director. Section 6. Dues and Subscriptions. Pursuant to YMC 2.20.085(6), the City will pay the Finance Director's professional dues for membership in the Government Finance Officers Association. Other appropriate dues and subscriptions on behalf of the Finance Director will be paid by the City as approved by the City Manager, if funds are available in the City's annual budget. Page 3 of 10 Page 4of10 Section 7. Professional Development. Pursuant to YMC 2.20.085(5), and in accordance with the City's travel policy, the City agrees to pay reasonable and customary travel and subsistence expenses for the Finance Director's travel to and attendance at the Washington Finance Officers Association. The City may choose to pay for the Finance Director's attendance at other seminars, conferences, and committee meetings as deemed appropriate and approved in advance by the City Manager. Section 8. Community Involvement. The City recognizes the desirability of representation in and before local civic and other organizations, and encourages the Finance Director to participate in these organizations to foster a continuing awareness of the City's activities as well as the community's attitudes and ideas. Section 9. Leave. The Finance Director shall accrue annual leave, which increases depending on length of service, at the same accrual rate as provided for management employees in YMC 2.40.020. Accrual of sick leave shall be as provided for management employees in YMC 2.40.030. Any other leave, such as bereavement leave pursuant to YMC 2.40.035, shall be the same as provided for management employees. Accrued leave cash outs may be paid at separation pursuant to the Yakima Municipal Code provisions relating to management employees. Cash outs for sick leave for management employees are placed in a VEBA Medical Savings Account at retirement. Section 10. Benefits. The Finance Director shall receive the benefits, including longevity pay pursuant to YMC 2.24.010, as are provided for management employees under the Yakima Municipal Code and /or by City policy. Section 11. Holidays. The Finance Director is entitled to specified holidays with pay consistent with management employees pursuant to YMC 2.40.080. Section 12. Health, Dental, Life. and Disability Insurance. The City of Yakima has an employee Health Care Plan. Health care coverage, including limited vision care and limited dental insurance, is available for City employees and their dependents for which the City cost shares. Pursuant to YMC Chapter 2.04, the Finance Director is entitled to be covered by the City of Yakima employee Health Care Plan consistent with City management employees. The City will provide other insurance, or the availability for other insurance, for the Finance Director as it does for management employees. Page 5 of 10 Section 13. Communication Equipment. The Finance Director will receive a City- issued cell phone to be used for City business in accordance with City policy. Section 14. Residency. The City Manager prefers that the Finance Director resides within the City of Yakima. Section 15. Retirement. Pursuant to Washington State law, the City shall contribute the percentage required by the State of Washington of the Finance Director's monthly salary each month into the State of Washington Public Employees' Retirement System (PERS). Section 16. Termination by the City Manager and Severance Pay. A. Pursuant to RCW 35.18.060, YMC 1.18.010, and Article II of the City Charter, and as provided in this Agreement, the Finance Director shall serve at the pleasure of the City Manager, and the City Manager may terminate this Agreement and the Finance Director's employment with the City at any time without cause or with cause, and /or for no reason or for any reason. B. Should the City Manager terminate the services of the Finance Director "without cause ", then at the next regular City payroll following such termination, and pursuant to the provisions in YMC Chapter 2.40 relating to management employees, the City shall pay accrued and unpaid salary and benefits earned prior to the date of termination (including annual leave and sick leave) as calculated and provided in the YMC Chapter 2.40 provisions relating to management employees. C. Severance Pay. After six (6) months' continuous employment in the position of Finance Director, and should the City Manager terminate the services of the Finance Director "without cause ", then the employee shall be entitled to severance pay as set forth in this Section 16C of the Agreement. If the City Manager terminates the services of the Finance Director "without cause ", then within forty -five (45) calendar days following the termination of the Finance Director's employment "without cause ", the City shall pay the Finance Director a lump sum severance pay equal to the specified number of months of her base salary as provided in the following two sentences, as full and complete payment and satisfaction of any claims of the Finance Director of whatsoever nature arising out of this Agreement or otherwise. After the employee has had more than six months of continuous employment in the position of Finance Director after April 20, 2012, the City Manager shall grant the employee three (3) months' severance pay upon termination without cause; and after two years in the position of Finance Director, the City Manager shall grant the employee five (5) months' severance pay upon termination without cause by the City Manager. As consideration for such severance payment, the Finance Director shall, prior to receipt Page 6 of 10 thereof, execute and deliver to the City a general release of the City of Yakima, the City Council, the City Manager, and the City's officers, agents, and employees, for all acts and actions (whether accrued or subsequently accruing) from the beginning of time until the date of release, said release to be prepared by the City Attorney or her designee. D. In the event the Finance Director is terminated for "just cause," the City shall have no obligation to pay the amounts outlined in Section 16, Paragraph C of this Agreement. For purposes of this Agreement, "just cause" is defined to include but is not limited to any of the following: 1. Misfeasance, malfeasance and /or nonfeasance in performance of the Finance Director's duties and responsibilities. 2. Conviction or a plea of guilty or no contest to a felony crime, whether or not adjudication is withheld. 3. Conviction of a gross misdemeanor or misdemeanor involving moral turpitude. 4. Neglect of duty, including the inability or unwillingness to properly discharge the responsibilities of office. 5. Violation of any substantive City policy, rule, or regulation, which would subject any other City employee to termination. 6. The commission of any fraudulent act against the interest of the City. 7. The commission of any act which involves moral turpitude, or which causes the City disrepute. 8. Violation of the City of Yakima Charter Article VI, Section 5, or violation of Revised Code of Washington ( "RCW ") Chapter 42.23, entitled "Code of Ethics for Municipal Officers -- Contract Interests ". 9. Any other act of a similar nature of the same or greater seriousness. E. In the event the City Manager, at any time during the employment term, reduces the salary or other benefits of the Finance Director, as identified herein, in a greater percentage than an equivalent across - the -board reduction for all full -time City management employees, or in the event the City allegedly refuses to comply with any other material provision of this Agreement benefiting the Finance Director, the Finance Director shall notify the City Manager in writing of the alleged violation. The City Manager's failure to conduct any of the scheduled evaluations shall not constitute non - compliance with a material provision of this Agreement. The City Manager shall have forty -five (45) days from such notice within which to cure the violation; otherwise, the Finance Director may at her option, consider such violation as Page 7of10 termination "without cause" as of the date of such alleged reduction or refusal, and the severance pay provision and other termination provisions contained herein shall become applicable at the annual salary and benefit level in effect prior to the reduction or refusal. Section 17. Termination by the Finance Director. The Finance Director may terminate this Agreement at any time by delivering to the City Council a written notice of termination not later than sixty (60) days prior to the effective date of the termination. If the Finance Director terminates this Agreement, then the provisions of Section 16, Paragraph C above, shall not apply. If the Finance Director voluntarily resigns pursuant to this Section, the City shall pay to the Finance Director all accrued compensation due to the Finance Director up to the Finance Director's final day of employment, and the pay out of any accumulated annual and sick leave shall be governed by the same Yakima Municipal Code provisions and City policies as those for City management employees. The City shall have no further financial obligation to employee pursuant to this Agreement. This Section shall not prevent the Finance Director from collecting any money earned as a result of participation in the City's deferred retirement program. Section 18. Disability. If the Finance Director becomes permanently disabled or is otherwise unable to perform her duties because of sickness, accident, injury, mental incapacity or health for a period of four consecutive weeks beyond any accrued leave, or beyond a period of time that the employee is otherwise legally entitled to, the City shall have the option to terminate this Agreement, subject to the severance pay provision outlined in Section 16, Paragraph C of this Agreement. Section 19. Indemnification. A. The Finance Director shall be entitled to the benefits and subject to the responsibilities in City of Yakima Resolution No. D -5820, entitled "Resolution providing for indemnification against personal liability for City personnel ", and any protections provided by State of Washington law, including RCW 4.96.041. B. Said indemnification referred to in this Section 19 shall extend beyond the termination of employment and the expiration of this Agreement to provide protection for any such acts undertaken or committed in the capacity as Finance Director, regardless of whether the notice of claim or filing of a lawsuit occurs during or following employment with the City. Section 20. Bonding. The City agrees to bear the full cost of any fidelity or other bonds required of the Finance Director under any policy, regulation, ordinance or law. Page 8 of 10 Section 21. General Terms and Conditions. A. If any provision, or any portion thereof, contained in this Agreement is held by a court of competent jurisdiction to be unconstitutional, illegal, invalid or unenforceable, the remainder of this Agreement, or portion thereof, shall not be affected and shall remain in full force and effect. B. The waiver by either party of a breach of any provision of this Agreement by the other shall not operate or be construed as a waiver of any subsequent breach by that party. C. This Agreement shall be binding upon and inure to the benefit of the heirs at law or personal representative of Finance Director. D. This Agreement contains the entire Agreement of the parties. It may not be changed verbally, but only by an Agreement in writing signed by the parties. E. Washington law shall govern this Agreement, and any litigation that may arise from this Agreement shall be filed and litigated in Yakima, Washington. F. Upon the Finance Director's death, the City's obligations under this Agreement shall terminate except for: 1. Transfer of ownership of retirement funds, if any, to her designated beneficiaries; 2. Payment of accrued leave balances as provided for management employees under these circumstances under the Yakima Municipal Code; 3. Payment of all outstanding hospitalization, medical and dental bills in accordance with City's insurance policies or plans, if applicable; and 4. Payment of all life insurance benefits in accordance with the City's insurance policies or plans. G. The parties acknowledge that each had an opportunity to review this Agreement and consult with their attorney if they chose to do so, and, accordingly, no court construing this Agreement shall construe it more strictly against one party that the other and every covenant, term and provision of this Agreement shall be construed simply according to its fair meaning. H. This Agreement may be executed in duplicate or counterparts, each of which shall be deemed an original and all of which together shall be deemed one and the same instrument. No term, condition or covenant of this Agreement shall be binding on either party until both parties have signed it. Page 9 of 10 EXECUTED this day of April, 2012. CITY OF YAKIMA By: Michael A. Morales, Interim City Manager ATTEST: By City Clerk EXECUTED this day of April, 2012. Cindy Epperson City Contract No.: Page l0 of 10