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HomeMy WebLinkAboutDoug Schulze - City Manager Employment Agreement - 2026 EMPLOYMENT AGREEMENT - CITY MANAGER TABLE OF CONTENTS Introduction 1 Section 1 Term 1 Section 2 Duties and Authority 1 Section 3 Ethical Commitments 2 Section 4 Compensation 2 Section 5 Health, Disability and Life Insurance Benefits 2 Section 6 Vacation, Sick and Military Leave 3 Section 7 Monthly Vehicle Allowance 3 Section 8 Retirement 3 Section 9 General Business Expenses 3 Sectionl0 Termination 4 Section 11 Severance 4 Section 12 Resignation 5 Section 13 Performance Evaluation 5 Section 14 Hours of Work 6 Section 15 Housing 6 Section 16 Outside Activities 6 Section 17 Indemnification 6 Section 18 Bonding 7 Section 19 Other Terms and Conditions of Employment 7 Section 20 Notices 7 Section 21 General Provisions 8 EMPLOYMENT AGREEMENT THIS AGREEMENT made and entered into this 16th day of June, 2026, by and between the City of National City, a municipal corporation (hereinafter called "Employer"), and Douglas Schulze (hereinafter called "Employee"), an individual who has the education, training and experience in local government management to perform satisfactorily the duties of the City Manager, both of whom agree as follows: Section 1. Term. This Agreement shall remain in full force and effect for period of(3) years from June 17, 2026, through June 16, 2029, unless sooner terminated by the Employer or Employee as provided in Section 10, 11 or 21 of this Agreement. This Agreement shall automatically be renewed on its anniversary date for a two (2) year term unless notice is given at least three (3) months before the expiration date. Section 2. Duties and Authority. A. Employer agrees to employ Douglas Schulze as City Manager, on an at-will basis, to perform the functions and duties specified in the National City Municipal Code and the California Government Code, and to perform other legally permissible and proper duties and functions, commencing on June 17, 2026, as assigned by Employer, subject to any limitations set forth in this Section. Employee shall not be required to accept Employer's assignment of any duties outside of the scope of those customarily performed by persons holding the role of city manager in the absence of Employee's express written consent to such assignment. Employer may not reassign Employee to another position in the absence of Employee's express written consent to such assignment. Employer shall not unreasonably interfere with Employee's performance of such duties. B. Employee shall be the chief executive officer of the Employer and faithfully perform Employee's lawfully prescribed and assigned duties with reasonable care, diligence, skill, and expertise in compliance with all applicable, lawful governing body directives; state, local, and federal laws; and Employer policies, rules, and ordinances as they exist or may hereafter be amended. C. Except as may be provided otherwise by applicable law, regulation, or Employer's agreement with any other person, Employee shall have the ultimate supervisory and managerial authority and responsibility to hire, direct, assign, reassign, evaluate, change the terms and conditions of employment, and terminate the employment of all other employees of Employer consistent with the policies of the governing body and the ordinances and code of the Employer, which authority may be delegated by Employee to such other employees as Employee deems appropriate. D. Except as may be provided otherwise by applicable law, regulation or Employer's agreement with any other person, Employee shall have authority to establish internal regulations, rules, and procedures which the Employee deems necessary for the efficient and effective operation of the Employer. E. Employee shall be permitted to attend, whether personally or through a designee of Employee's choosing, all meetings of Employer's governing body, both public and closed, with the exception of those closed meetings devoted to the subject of this Agreement, or any amendment thereto, or the Employee's evaluation, unless 1 otherwise provided by applicable law, regulation, or Employer's agreement with any other person. F. Employer agrees to promptly communicate and provide Employee a reasonable opportunity to cure all substantive criticisms, complaints, and suggestions with respect to Employee's performance of services pursuant to this Agreement. G. Except as may be provided otherwise by applicable law, regulation, or this Agreement, Employee shall carry out Employer's lawful policy directives, goals, and objectives, as communicated to Employee by Employer's governing body, while presenting information and recommendations that allow for fully informed policy decisions that both address immediate needs and anticipate future conditions. Section 3. Ethical Commitments The Employer expects the Employee to adhere to the highest professional standards. The Employee's actions will always comply with those standards. The Employee agrees to follow the Code of Ethics of the International City Management Association (ICMA) and the ethics rules, regulations, and laws of the State of California. The ICMA Code of Ethics can be found on the ICMA website, icma.org. Consistent with the standards outlined in the Code, the Employee shall not endorse candidates, make financial contributions, sign or circulate petitions, or participate in fundraising activities for individuals seeking or holding elected office, nor seek or accept any personal enrichment or profit derived from confidential information or misuse of public time. Employer shall support Employee in keeping these commitments by refraining from any order, direction or request that would require Employee to violate the ICMA Code of Ethics. Neither the governing body nor any individual member thereof shall request Employee to endorse any candidate, make any financial contribution, sign or circulate any petition, or participate in any fundraising activity for individuals seeking or holding elected office, nor to handle any matter of personnel on a basis other than fairness, impartiality, and merit. Section 4. Compensation. A. Base Salary: Employer agrees to pay Employee an annual base salary of Three- Hundred Thousand Dollars ($300,000), payable in installments at the same time that the other executive employees of the Employer are paid. B. This Agreement shall be automatically amended to reflect any salary adjustments that are provided or required by the Employer's compensation policies to include all salary adjustments on the same basis as applied to the executive classification of employees. C. In addition, consideration shall be given on an annual basis to an increase in compensation. D. At any time during the term of the Agreement, Employer may, in its discretion, review and adjust the salary of the Employee, but in no event shall the Employee be paid less than the salary set forth in Section 4. A. of the Agreement except by mutual written agreement between Employee and Employer. Such adjustments, if any, shall be made pursuant to a lawful governing body action. In such event, Employer and Employee agree to provide their best efforts and reasonable cooperation to execute a new agreement incorporating the adjusted salary. Section 5. Health, Disability and Life Insurance Benefits. A. The Employer agrees to provide Employee a cafeteria health benefit of$1,200.00 per month. 2 B. The Employer agrees to put into force and to make required premium payments for long-term disability coverage for the Employee. C. The Employer shall pay the amount of premium due for term life insurance in the amount of$250,000. The Employee shall name the beneficiary of the life insurance policy. Section 6. Vacation, Sick and Military Leave. A. Upon commencing employment, the Employee shall be credited with forty (40) accrued sick leave hours and forty (40) accrued vacation leave hours. In addition, beginning the first day of employment, Employee shall be eligible to accrue and use sick leave and vacation leave on an annual basis, at a minimum, at the highest rate provided or available to any other Executive employees, and under the same rules and provisions applicable to other Executive employees, including any leave buy-back programs. B. The Employee is entitled to receive vacation leave, executive leave, sick leave, insurance and retirement benefits in accordance with those benefits provided to the Executive group of the City. C. The Employee shall be entitled to military reserve leave time pursuant to state law and City policy. Section 7. Vehicle Allowance. The Employer agrees to pay to the Employee, during term of this Agreement and in addition to other salary and benefits herein provided the sum of$9,000.00 per year, payable at$750.00 per month, as a vehicle allowance to be used to purchase, lease, or own, operate and maintain a vehicle. The Employee shall be responsible for paying for liability, property damage, and comprehensive insurance coverage upon such vehicle and shall further be responsible for all expenses attendant to the purchase, operation, maintenance, repair, and regular replacement of said vehicle. The Employer shall reimburse the Employee at the IRS standard mileage rate for any business use of the vehicle beyond the greater National City area. For purposes of this Section, use of the car within the greater National City area is defined as travel to locations within a 50-mile radius of the National City Civic Center. In lieu of receiving a vehicle allowance, the Employee may elect to have the use of an Employer furnished vehicle for the performance of official duties and commuting to and from work. Employer will provide vehicle maintenance, fuel, and insurance for such vehicle. Section 8. Retirement. The Employer shall at the first permissible opportunity, enroll the Employee into the Public Employees' Retirement System and to make all the appropriate contributions on the Employee's behalf, for the required Employer share. Employee shall pay the entire employee share, which is 8% at this time and any changed rate during the term of this Agreement. Section 9. General Business Expenses. A. Employer agrees to budget for and to pay for professional dues and subscriptions of the Employee necessary for continuation and full participation in national, regional, state and 3 local associations, and organizations necessary and desirable for the Employee's continued professional participation, growth, and advancement, and for the good of the Employer. B. Employer agrees to budget for and pay travel and subsistence expenses of Employee for professional and official travel, meetings, and occasions to adequately continue the professional development of Employee and to pursue necessary official functions for Employer, including but not limited to the ICMA Annual Conference, the League of California Cities, and such other national, regional, state and local governmental groups and committees in which Employee services as a member. C. Employer also agrees to budget for and to pay for travel and subsistence expenses of Employee for short courses, institutes and seminars that are necessary for the Employee's professional development and for the good of the Employer. D. Employer recognizes that certain expenses of a non-personal but job-related nature are incurred by Employee, and agrees to reimburse or to pay said general expenses. The Finance Director is authorized to disburse such moneys upon receipt of duly executed expense or petty cash vouchers, receipts, statements or personal affidavits. E. The Employer acknowledges the value of having Employee participate and be directly involved in local civic clubs or organizations. Accordingly, Employer shall pay for the reasonable membership fees and/or dues to enable the Employee to become an active member in local civic clubs or organizations. F. The Employer shall provide Employee with a computer, software, and cell phone required for the Employee to perform the job and to maintain communication. Upon termination of Employee's employment, the equipment shall remain the property of the Employer and any mobile phone number may be transferred to the Employee. Section 10. Termination. For the purpose of this Agreement, termination shall occur when: A. The majority of the Employer's City Council votes to terminate the Employee at a duly authorized public meeting. B. If the Employer, citizens or the legislature acts to amend any provisions of the state or local law pertaining to the role, powers, duties, authority, and responsibilities of the Employee's position that substantially changes the form of government, the Employee shall have the right to declare that such amendments constitute termination. C. If the Employer reduces the base salary, compensation or any other financial benefits of the Employee, unless it is applied in no greater percentage than the average reduction of all department heads, such action shall constitute a breach of this Agreement and will be regarded as a termination. D. If the Employee resigns following an offer to accept resignation, whether formal or informal, by the Employer as representative of the majority of the governing body that the Employee resign, then the Employee may declare a termination as of the date of suggestion. E. Breach of contract declared by either party with a 30-day cure period for either Employee or Employer. Written notice of a breach of contract shall be provided in accordance with the provisions of Section 18. Section 11. Severance. The Employee is an at-will employee, serving at the pleasure of the Employer's City Council. This Agreement, and the Employee's employment with the Employer, may be terminated with or 4 without cause by the Employer's City Council. In the event the Employee is terminated for cause as described in the last paragraph of this section,or voluntarily resigns his position with the Employer, then the Employee shall not be entitled to the payment of severance by the Employer. In the event the Employee is terminated by the Employer other than for cause, and during such time that Employee is willing and able to perform his duties under this Agreement, then Employer agrees to pay severance at the rate called for in the City's Executive Compensation plan. This severance shall be paid in one lump sum unless otherwise agreed to by the Employer and the Employee. In the event of severance, the Employee shall also be compensated for all accrued sick and vacation leave. If the Employee is terminated because of a conviction of a felony, then the Employer is not obligated to pay severance under this section. If the Employee is convicted of a crime involving an abuse of office or position then, regardless of the term of the contract, if the Employee is terminated, any cash settlement, including severance, related to the termination received by Employee from Employer shall be fully reimbursed to the Employer. Section 12. Resignation. In the event that the Employee voluntarily resigns his position with the Employer, the Employee shall provide a minimum of thirty (30) days' notice unless the parties agree otherwise in writing. Section 13. Performance Evaluation. A. Employer shall annually review the performance of the Employee in the Employee's anniversary month subject to a process, form, criteria, and format for the evaluation which shall be mutually agreed upon by the Employer and Employee. B. The annual evaluation process, at a minimum, must include the opportunity for both parties to: 1. Conduct a goal-setting session where the Employer and Employee meet first to discuss goals and objectives of both the past twelve (12) month performance period, as well as the upcoming twelve (12) month performance period, 2. Following the goal-setting discussion, prepare a written evaluation of goals and objectives for the past and upcoming year, 3. next meet and discuss the written evaluation of these goals and objectives, and C. Present a written summary of the evaluation results to the Employee. The final written evaluation should be completed and delivered to the Employee within thirty (30) days of the evaluation meeting. D. Unless the Employee expressly requests otherwise in writing, the evaluation of the Employee shall at all times be conducted in closed session of the governing body and shall be considered confidential to the extent permitted by law. Nothing herein shall 5 prohibit the Employer or Employee from sharing the content of the Employee's evaluation with their respective legal counsel. E. In the event the Employer deems the evaluation instrument, format, and/or procedure is to be modified by the Employer and such modifications would require new or different performance expectations, then the Employee shall be provided a reasonable period of time to demonstrate such expected performance before being evaluated. Section 14. Hours of Work. It is recognized that the Employee must devote a great deal of time outside the normal office hours on business for the Employer, and to that end Employee shall be allowed to establish an appropriate work schedule, compatible with the normal business hours of the City of National City. Section 15. Housing Employee may live in an Apartment owned by the City at 921 "A" Avenue, National City, CA 91950 (Kimball House Apartment). If Employee opts to live in the Kimball House Apartment, a separate six- month lease will be executed between Employee and Employer. Section 16. Outside Activities. A. Disclosure and Acknowledgment: Employee has disclosed and acknowledged the following outside activities: No outside activities to disclose. Should this present a conflict of interest or inability for the City Manager to provide full services to the City, he shall withdraw from such activities. B. Notice and Consent: Employee shall give written notice to Council for Council's approval of any new outside activities of Employee. Section 17. Indemnification. In accordance with federal, state or local law, Employer shall defend, save harmless and indemnify Employee against any tort, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the course and scope of Employee's duties as City Manager, or resulting from the exercise of judgment or discretion in connection with the course and scope of performance of program duties or responsibilities, unless the act or omission involved willful or wanton conduct. In such cases, the Employee may request, and the Employer shall not unreasonably refuse, to provide independent legal representation at the Employer's expense and the Employer may not unreasonably withhold approval. Legal representation provided by Employer for Employee shall extend until a final determination of the legal action, including any appeals brought by either party. The Employer shall indemnify Employee against any and all losses, damages,judgments, interest, settlements, fines, court costs, and other reasonable costs and expenses of legal proceedings, including attorney's fees and any other liabilities incurred by, imposed upon, or suffered by such Employee in connection with or resulting from any claim, action, suit or proceeding, actual or threatened, arising out of or in connection with the performance of the 6 Employee in the course and scope of Employee's duties. Any settlement of any claim must be made with prior approval of the Employer in order for indemnification, as provided in this Section, to be available. Employee recognizes the Employer shall have the right to compromise and settle any claim or suit. Further, Employer agrees to pay all reasonable litigation expenses of Employee throughout the pendency of any litigation to which the Employee is a party, witness or advisor to the Employer. Such expense payments shall continue beyond Employee's service to the Employer as long as litigation is pending. Further, Employer agrees to pay Employee reasonable consulting fees and travel expenses when Employee serves as a witness, advisor or consultant to Employer regarding pending litigation. If Employee is convicted of a crime involving an abuse of his office or position, as defined in Government Code section 53243.4, then Employee shall fully reimburse Employer for any funds provided for Employee's criminal defense, if any such funds were provided pursuant to or consistent with this Section. This paragraph shall not be construed as creating or implying an obligation by Employer to provide a criminal defense to Employee. Section 18. Bonding Employer shall bear the full cost of any bonds the Employee is required to obtain by any law or ordinance. Section 19. Other Terms and Conditions of Employment. A. The Employer shall fix any such other terms and conditions of employment, as it may determine from time to time, relating to the performance of the Employee, provided such terms and conditions are not inconsistent with or in conflict with the provisions of this Agreement, the National City Municipal Code, or any other law. B. Except as otherwise provide in this Agreement, the Employee shall be entitled to the highest level of benefits that are enjoyed by other appointed employees of the Employer as provided in the Municipal Code or by practice. Section 20. Notices. Notice pursuant to this Agreement shall be given by depositing in the custody of the United States Postal Service, postage prepaid, addressed as follows: EMPLOYER: City of National City EMPLOYEE: Douglas Schulze c/o Mayor 1243 National City Boulevard 921 "A" Avenue National City, CA 91950-4301, National City, CA 91950 Alternatively, notice required pursuant to this Agreement may be personally served in the same manner as is applicable to civil judicial practice. Notice shall be deemed given as of the date of 7 personal service or as the date of deposit of such written notice in the course of transmission in the United States Postal Service. Section 21. General Provisions. A. Integration. This Agreement sets forth and establishes the entire understanding between the Employer and the Employee relating to the employment of the Employee by the Employer. Any prior discussions or representations by or between the parties are merged into and rendered null and void by this Agreement. The parties by mutual written agreement may amend any provision of this Agreement during the life of the Agreement. Such amendments shall be incorporated and made a part of this Agreement. B. Binding Effect. This Agreement shall be binding on the Employer and the Employee as well as their heirs, assigns, executors, personal representatives and successors in interest. C. Effective Date. This Agreement shall become effective on June 17, 2026. D. Severability. The invalidity or partial invalidity of any portion of this Agreement will not affect the validity of any other provision. In the event that any provision of this Agreement is held to be invalid, the remaining provisions shall be deemed to be in full force and effect as if they have been executed by both parties subsequent to the expungement or judicial modification of the invalid provision. E. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. F. Construction. The parties acknowledge and agree that (1) each party is of equal bargaining strength, (2) each party has actively participated in the drafting, preparation and negotiation of this Agreement, (3) each such party has consulted with or has had the opportunity to consult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Agreement, (4) each party and such party's counsel and advisors have reviewed this Agreement, (5) each party has agreed to enter into this Agreement following such review and the rendering of such advice, and (6) any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement, or any portions hereof, or any amendments hereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written. CITY OF N IONAL CITY E LOYEE By: Ron Morrison, Mayor u la APPROVED AS TO FORM: Heidi A. Skinner, City Attorney 8