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CITY OF SAN BERNARDINO
INTEROFFICE MEMORANDUM
TO: Members of the Common Council
FROM: Patrick J. Morris, May1 \1
SUBJECT: Appointee for City Manager—Charles E. McNeely
DATE: March 19, 2008
CC: Interim City Manager, City Clerk, City Attorney
I am excited to enthusiastically bring forward Charles E. McNeely for appointment as City
Manager for the City of San Bernardino, and ask for the Common Council's confirmation
of this appointment as provided in Section 100 of the City Charter.
Mr. McNeely's appointment is the culmination of a nationwide search, recruitment, and
extensive interview process that began in September 2008, after former City Manager Fred
Wilson's moved to Huntington Beach. The City retained Alliance Resource Consulting LLC to
shepherd the national search and recruitment process for executives in the public and private
sector with the skills and experience to manage the issues and staff of a large and complex
organization like the City of San Bernardino. Alliance's search and recruitment efforts resulted
in forty-seven initial applicants for the position of City Manager by mid-January 2009. Alliance
reviewed all resumes submitted and qualified candidates were asked to submit Supplemental
Information forms. Alliance conducted telephonic interviews with the most qualified candidates.
Alliance presented their recommended top eleven candidates to me, and during the first part of
February 2009, I interviewed all eleven candidates. Based my one-on-one interviews, I reviewed
my recommended top five candidates with Alliance, and Alliance concurred with the selection of
these candidates.
To assist in a detailed evaluation of the skill, temperament, experience, and performance of these
top candidates, I assembled a distinguished professional panel to interview these top six
candidates and make a recommendation of the finalists that should be considered by the Mayor
and Common Council for appointment. The professional panel was comprised of the following
members:
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• Pam Easter, Assistant City Manager for the City of Rancho Cucamonga, and former City
Manager for City of San Jacinto
• Wesley McDaniel, former Executive Director of the San Bernardino County
Transportation Commission and San Bernardino Associated Governments (SANBAG)
• John Tooker, former City Manager for the City of Yucaipa
• Mark Weinberg, Interim City Manager for the City of San Bernardino, and former City
Manager for the City of Inglewood
• David Baker, CSUSB Assistant Professor of Public Administration, and former CAO of
San Joaquin County
The professional panel spent an entire day conducting one-on-one panel interviews of the top
four candidates (before the professional panel began its process one candidate withdrew his
name from consideration). At the conclusion of the interviews, the professional panel
unanimously recommended two candidates be considered by the Mayor and Common Council
for appointment.
At a special meeting of the Mayor and Common Council on March 9, 2009, the two final
candidates were extensively interviewed by the Common Council, and Alliance presented the
results of its comprehensive background research and reference checks on both candidates. I
also conducted personal site visits with both candidates at their existing place of employment,
did personal interviews with references, and hosted both candidates for a day long tour of San
Bernardino to discuss and asses the response to the multitude of complex issues facing our City.
At the conclusion of this process, it was clear to me that Charles E. McNeely was the absolute
best choice for City Manager of the City of San Bernardino. His credentials, skills,
temperament, experience, and remarkable track record will serve well the City of San Bernardino
as we continue to drive down crime in our city and lay the ground work for our economic
renaissance. Attached is a copy of Mr. McNeely's biography.
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0701AR,Nvo
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oho OFFICE OF THE MAYOR i c 2 f PATRICK J. MORRIS
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CITY OF SAN BERNARDINO
INTEROFFICE MEMORANDUM
TO: Members of the Common Council
FROM: Patrick J. Morris, M.■o
SUBJECT: Agenda Item #1 - Emplo - • greement with Charles E. McNeely
DATE: March 19, 2008
CC: Interim City Manager, City Clerk, City Attorney
If the Common Council confirms the appointment of Mr. McNeely's as City Manager for
the City of San Bernardino, I would ask that you adopt the attached resolution authorizing
execution of the employment agreement with Mr. McNeely.
Over the past week, I have negotiated the terms of the attached employment with Mr. McNeely
for his employment as City Manager of the City of San Bernardino. The following is a summary
of the terms of the proposed employment agreement with Mr. McNeely:
• Contract term is 3 years, with a 12-month severance provision if terminated without
cause.
• Annual salary is $275,000. The schedule, amount, and process for any future salary
adjustments are the same as all other Management/Confidential employees.
• McNeely has ,volunteered to giveback of 10% of his salary in accordance with the
contribution made by all other Management/Confidential employees.
• Benefits are the same as all other Management/Confidential employees, with the
following exceptions:
• an initial bank of 100 vacation hours and the opportunity to cash-out up to 100
hours of accrued vacation annually;
• $1,000 per month contribution to deferred compensation;
• annual reimbursement up to $1,000 for a comprehensive medical examination;
• payment of annual membership in the International City/County Management
Association and related professional travel in accordance with city policies.
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• $15,000 one-time stipend for relocation from Reno, Nevada to San Bernardino,
California contingent upon residency in the City of San Bernardino
Please note the agreement also provides that the Mayor and Common Council will convene
annually with the City Manager for a goal and priority setting workshop.
To assist in evaluating the terms of the proposed employment agreement with Mr. McNeely, the
following is a summary of the publicly available data on current salary and deferred
compensation packages for other city managers in Inland Empire cities with over 100,000
residents:
Annual Deferred
City Population Total
Salary Comp.
Corona 147,428 $258,240 $22,800 $281,040
Fontana 188,498 $264,597 $25,000 $289,597
Moreno Valley 183,860 $269,302 $8,900 $278,202
Ontario 173,690 $304,968 $22,873 $327,841
Rancho Cucamonga 174,308 $293,320 $43,992 $337,312
Riverside 306,240 $275,004 $25,000 $300,004
Temecula 101,057 $277,529 $20,500 $298,029
Victorville 107,408 $306,168 $41,333 $347,501
AVERAGE $281,141 $26,300 $307,441
City of San Bernardino 206,348 $275,000 $12,000 $287,000
Finally, it is important to note the commencement date for Mr. McNeely's appointment and
employment as city manager is June 1, 2009. Mr. McNeely's current employment agreement
with the City of Reno requires 60-day notice for his resignation. I have discussed with Mr.
McNeely the possibility that he may be available before June 1, 2009 on a periodic basis during
which he could work in San Bernardino on transitioning into his role as city manager. If that
opportunity is available and needed, Section 2 of the attached resolution provides the authority to
negotiate a transitional services agreement with Mr. McNeely at an hourly cost not to exceed that
provided for in the employment agreement, and bring that agreement before the Common
Council for consideration and approval.
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1 RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
3 SAN BERNARDINO AUTHORIZING EXECUTION OF AN EMPLOYMENT
AGREEMENT BETWEEN CHARLES E. MCNEELY AND THE CITY OF SAN
4 BERNARDINO FOR THE POSITION OF CITY MANAGER TO COMMENCE JUNE
5 1, 2009, AND AUTHORIZING NEGOTIATION OF A TRANSITIONAL SERVICES
AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND CHARLES E.
6 MCNEELY DURING THE INTERIM PERIOD UNTIL JUNE 1, 2009
7 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
8 CITY OF SAN BERNARDINO AS FOLLOWS:
9 SECTION 1. The Mayor of the City of San Bernardino is hereby authorized and
10 directed to execute on behalf of said City the Employment Agreement between Charles E.
11 McNeely and the City of San Bernardino, which is attached hereto, marked Exhibit "A", and
12 incorporated herein by reference as fully as though set forth at length.
13 SECTION 2. It is recognized that between the date this resolution is adopted and the
14 commencement date of the Employment Agreement on June 1, 2009, Charles E. McNeely
15 may be asked to provide services to the City of San Bernardino as part of his transition to the
16 City Manager position, while he is still employed by the City of Reno, Nevada. Should that
17 need arise, the Mayor of the City of San Bernardino is hereby authorized and directed to
18 negotiate on behalf of said City a Transitional Services Agreement between the City of San
19 Bernardino and Charles E. McNeely, at an hourly cost not to exceed that provided for in
20 Section 4 of the attached Employment Agreement. Any such Transitional Services
21 Agreement shall be subject to the approval of the Common Council of the City of San
22 Bernardino following legal review by the City Attorney of the City of San Bernardino.
23 SECTION 3. The authorization to extend the above-referenced agreement is
24 rescinded if the parties to the agreement fail to execute it within sixty(60) days of the passage
25 of this resolution.
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1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING EXECUTION OF AN EMPLOYMENT
2 AGREEMENT BETWEEN CHARLES E. MCNEELY AND THE CITY OF SAN
3 BERNARDINO FOR THE POSITION OF CITY MANAGER TO COMMENCE JUNE
1, 2009, AND AUTHORIZING NEGOTIATION OF A TRANSITIONAL SERVICES
4 AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND CHARLES E.
5 MCNEELY DURING THE INTERIM PERIOD UNTIL JUNE 1, 2009
6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
7 and Common Council of the City of San Bernardino at a meeting thereof,
8 held on the _ day of , 2009,by the following vote, to wit:
9 Council Members: AYES NAYS ABSTAIN ABSENT
10
ESTRADA
11
12 BAXTER
13 BRINKER
14 (VACANT)
15 KELLEY
16
JOHNSON
17
18 MCCAMMACK
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20 City Clerk
21
The foregoing resolution is hereby approved this day of ,
22 2009.
23
24
Patrick J. Morris, Mayor
25 City of San Bernardino
Appro ed as to form:
26
27 By: ' - y. te.,,,,,„
28 J. s F. Penman
• Attorney
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1 EMPLOYMENT AGREEMENT
2 THIS AGREEMENT is made and entered into this 19th day of March, 2009, by and
3 between the CITY OF SAN BERNARDINO, a charter city ("City"), and CHARLES E.
4 MCNEELY, an individual ("McNeely").
5 WHEREAS, the City has a need for the services of a City Manager;
6 WHEREAS, McNeely is competent, trained, and qualified for the position of City
7 Manager; and
8 WHEREAS, the parties desire to enter into this Agreement to outline the duties and
9 responsibilities of the parties,
10 NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
11 1. APPOINTMENT. McNeely is hereby appointed to, and does hereby accept,
12 such appointment of the office of City Manager of the City of San Bernardino effective June
13 1, 2009.
14 2. TERM. The term of this Agreement shall commence June 1, 2009 and
15 terminate June 1, 2012. No later than May 1, 2011, the Mayor shall provide written notice to
16 McNeely of the Mayor's intent to recommend or not to recommend extending the term of this
17 Agreement. If the Mayor elects to recommend extending the term of this Agreement, then the
18 Mayor shall seek approval of such recommendation from the Common Council. If the Mayor
19 elects not to recommend extending the term of this Agreement, or if the Common Council
20 does not approve the Mayor's recommendation to extend the term of this Agreement by June
21 1, 2011, then McNeely shall continue in his employment under the terms of this Agreement
22 until its natural expiration on June 1, 2012, and McNeely shall have no right to any severance
23 payment unless McNeely is terminated as provided in Section 3(a) of this Agreement.
24 3. TERMINATION. Under the terms of this appointment, McNeely serves as an
25 "at-will" employee and may be terminated at any time, with or without cause pursuant to the
26 provisions of the San Bernardino City Charter and this Agreement. Nothing in this
27 Agreement, the San Bernardino City Charter, any statute, ordinance, or rule shall be construed
28 as creating any vested right in such appointment or in employment with the City.
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1 a. If during the term of this Agreement, McNeely is terminated without
2 cause, he shall be entitled to severance pay equal to twelve (12) months of his then current
3 salary and he shall be entitled to compensation for any accrued and unused leave per
4 Resolution No. 2007-345 as amended or its successor. The severance payment shall be
5 conditioned upon McNeely executing a separation agreement providing a release and waiver
6 of any and all claims against City, its officers, employees, and agents arising out of
7 McNeely's employment with City and the termination thereof. The severance payment shall
8 be McNeely's sole and exclusive remedy for termination without cause.
9 b. If during the term of this Agreement, McNeely is terminated for cause,
10 McNeely shall have a right to a hearing before the Mayor in accordance with Section 52 of
11 the San Bernardino City Charter, which authorizes the Mayor to discharge the City Manager
12 for cause, subject to the laws of the State of California. In the event McNeely voluntarily
13 resigns his position with the City, then McNeely shall give City thirty (30) days written notice
14 in advance of the effective date of his resignation, unless the parties otherwise agree.
15 McNeely shall have no right to any severance payment, and shall only be entitled to
16 compensation for any accrued and unused leave per Resolution No. 2007-345 as amended or
17 its successor, upon the occurrence of any of the following events: (i) upon mutual written
18 agreement by the parties to terminate this Agreement; (ii) upon McNeely's voluntary
19 resignation; (iii) upon the death of McNeely; (iv) upon the natural expiration of the term of
20 this Agreement; or(v) upon McNeely's termination for cause.
21 c. For purposes of this section, "cause" is defined as: (i) a willful breach
22 of this Agreement, (ii) neglect or lack of loyalty in the performance of the City Manager's
23 duties, or (iii) any acts of dishonesty, fraud, misrepresentation, or other acts of moral
24 turpitude. For purposes of this section, "loyalty" is defined as the duty of the City Manager to
25 avoid fraud,bad faith, usurpation of city government opportunities, and self-dealing.
2 6 4. SALARY. McNeely shall be compensated at an annual base salary equal to
2 7 Two Hundred and Seventy-Five Thousand Dollars ($275,000). This annual base salary shall
28 be payable bi-monthly at the same time as other city employees. Consistent with the
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1 schedule and process applicable to other employees in the Management/Confidential Group
2 per Resolution No. 2007-345, the Mayor shall conduct a performance evaluation of McNeely
3 after six (6) months from the commencement date of this Agreement, and annually thereafter,
4 and at the Mayor's discretion based on the completed performance evaluation, the Mayor may
5 award McNeely a merit increase of up to five percent (5%) annually.
6 5. VOLUNTARY 10% "GIVEBACK." In recognition of the extraordinary
7 financial issues facing the City of San Bernardino and other local governments, and consistent
8 with the sacrifice made by other city employees, McNeely has voluntarily agreed to give back
9 ten percent (10%) of his salary in accordance with Resolution No. 2009-35. Accordingly, if
10 and when the City restores the 10% concession provided by employees in the
11 Management/Confidential Group per Resolution No 2009-35, or any portion thereof, the 10%
12 voluntary"giveback"provided herein by McNeely shall also be commensurately restored.
13 6. FRINGE BENEFITS. McNeely shall be entitled to the benefit package
14 established for the Management/Confidential Group, including but not limited to, health,
15 dental, vision, leave, retirement, long-term disability coverage, life insurance, and other
16 benefits as provided in Resolution No. 2007-345 as amended or its successor.
17 a. For purposes of"vacation leave," McNeely shall be provided an initial
18 bank of one hundred (100) hours of vacation leave and shall be given credit for twenty-five
19 (25) years of continuous service for purposes of accruing vacation leave per Resolution No.
20 2007-345 as amended or its successor. On or before September l' of each year, McNeely
21 shall notify the Finance Director of the number of vacation hours (not to exceed 100 hours in
22 a calendar year) that he wishes to sell back to City and receive payment for such in the month
23 of October.
24 b. Effective June 1, 2009, McNeely shall receive a One-Thousand Dollar
25 ($1,000) per month contribution from City to the 457 Deferred Compensation Program
26 administered by City per Resolution No. 2007-345 as amended or its successor.
27 c. McNeely shall be entitled to the vehicle reimbursement allowance
28 provided per Resolution 2006-428 as amended or its successor.
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1 d. McNeely shall be eligible for an annual comprehensive medical
2 examination provided through City at City's expense, which shall not exceed One Thousand
3 Dollars ($1,000).
4 e. City shall pay McNeely's membership in the International City/County
5 Management Association. Membership in other professional organizations paid by the City
6 shall be subject to approval by the Mayor. In accordance with City travel and other policies,
7 City will reimburse reasonable conference fees, travel, meals, and other authorized expenses
8 incurred by McNeely as part of his official functions and duties, as well as professional and
9 official travel to meetings and conferences for appointive positions and professional
10 organizations approved by the Mayor, so long as such amounts are also within the scope of
11 the City's annual budget approved by the Common Council. McNeely must provide copies of
12 receipts or other detail for such expenses, as required by City policy.
13 7. RELOCATION ASSISTANCE. In consideration of the cost and expense
14 McNeely will incur to relocate from his existing out-of-state residence to the City of San
15 Bernardino, the City shall provide McNeely a one-time stipend of Fifteen Thousand Dollars
16 ($15,000) for relocation assistance. Payment of the relocation assistance stipend is contingent
17 upon McNeely establishing his residence within the boundaries of the City of San Bernardino.
18 If for any reason this Agreement is ended prior to June 1, 2010, then McNeely shall repay
19 City one-twelfth of the relocation assistance stipend for every month or portion thereof
20 remaining until June 1, 2010, or if for any reason during the term of this Agreement McNeely
21 establishes his residence outside the boundaries of the City of San Bernardino, then McNeely
22 shall repay City the entire relocation assistance stipend.
23 8. MOONLIGHTING. McNeely will focus his professional time, ability, and
24 attention on City business during the term of this Agreement. To the extent consistent with
25 applicable law, McNeely shall not engage in any other business duties or pursuits whatsoever
26 or, directly or indirectly, render any services of a business, commercial, or professional nature
27 to any other person or organization, whether for compensation or otherwise, without prior
28 consent of the Mayor; except that the expenditure of reasonable amounts of time not in
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1 conflict with the City's needs and interests, for educational, charitable, community, and
2 professional activities shall not be deemed a breach of this Agreement and shall not require
3 prior consent. This Agreement shall not be interpreted to prohibit McNeely from making
4 passive personal investments, occasional teaching at a local institution of higher education, or
5 conducting private business affairs if those activities do not materially interfere with the
6 duties of the City Manager or create conflicts of interest.
7 9. ANNUAL WORKSHOP WITH MAYOR AND COMMON COUNCIL.
8 McNeely hereby requests, and the Mayor and Common Council hereby agree, that within
9 three (3) months after commencement of the term of this Agreement, and annually thereafter,
10 the Mayor and Common Council shall schedule and conduct with the City Manager an annual
11 workshop, within the corporate boundaries of the City of San Bernardino, to discuss and
12 establish goals and priorities for the City of San Bernardino.
13 10. BONDING. If applicable, the City shall bear the full cost of any fidelity or
14 other bonds required of McNeely in the performance of his duties as City Manager.
15 11. ENTIRE AGREEMENT. This Agreement contains the entire agreement
16 between the parties. Any correspondence, letters, documents, or discussions leading up to this
17 Agreement which deal with the terms contained herein are superseded by this Agreement.
18 12. SEVERABILITY. If any part of this Agreement is in conflict or inconsistent
19 with the applicable provisions of federal, state, or city statutes, or it is otherwise held to be
20 invalid or unenforceable by any court of competent jurisdiction, such part or provision shall
21 be suspended and superseded by such applicable law or regulations, and the remainder of this
22 Agreement shall not be affected thereby.
23 13. AMENDMENT. This Agreement may only be amended by a written agreement
24 executed by the parties, and may not be amended by oral agreement.
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1 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
2 day and date first shown.
3 ATTEST: CITY OF SAN BERNARDINO
4
5 By: By:
Rachel Clark, City Clerk Patrick J. Morris, Mayor
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8 APPROVED AS TO FORM: CHARLES E. MCNEELY
9
10 By: P / !
11 J s F. Penman, City Attorney
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0,934A 449
Noen iN
INTER OFFICE MEMORANDUM
OFFICE OF THE CITY ATTORNEY
CITY OF SAN BERNARDINO
To: Mayor and Common Council
From: James F. Penman
City Attorney
Date: March 19, 2009
Subject: Legal Issue with Proposed Employment Agreement With City Manager
Copies: City Clerk, City Treasurer, City Manager
This memorandum is an attachment to the proposed employment agreement between the City of
San Bernardino and Charles E. McNeely for the position of City Manager of this city.
This is not intended to be a comprehensive analysis of the entire agreement. One important legal
issue with the agreement is discussed below. Each Council Member should read the entire
agreement for himself/herself before casting their vote on the employment agreement with Mr.
McNeely.
The agreement uses relatively standard language for such employment agreements. However, a
noticeable departure from language that has been standard in other City of San Bernardino
employment agreements is the omission of the following language (in bold and italics for
emphasis):
"If during the term of this Agreement McNeely is terminated without cause, he shall be
entitled to severance pay equal to twelve (12) months of his then current salary, or such number
of months as is necessary to complete the term of this agreement whichever is less."
Without the above-referenced language, if McNeely were to be terminated without cause in the
last two or three months of his employment agreement as an example, he would still be entitled
to a full twelve(12)months severance.
3�rq o y
Memorandum to Mayor and Common Council
March 19, 2009
Page two
You are further advised however, that the absence of the above-referenced language is not illegal.
It is a policy decision to be made by the Mayor and Common Council as to whether or not said
omitted language should be included in the agreement. We recommend its inclusion.
However, the Mayor's Chief of Staff has informed this office that the omitted language stated on
the preceding page was a"deal point"in the employment negotiations. It is the recommendation
of the Mayor, according to his Chief of Staff, that the following language in paragraph 2,
"TERM"be included as a substitute for the legally recommended language:
"No later than May 1, 2011, the Mayor shall provide written notice to McNeely of the
Mayor's intent to recommend or not to recommend extending the term of this Agreement.
If the Mayor elects to recommend extending the term of this Agreement, then the Mayor
shall seek approval of such recommendation by the Common Council. If the Mayor
elects not to recommend extending the term of this Agreement, of if the Common
Council does not approve the Mayor's recommendation to extend the term of this
Agreement by June 1, 2011, then McNeely shall continue in his employment under the
terms of this Agreement until its natural expiration on June 21, 2012 and McNeely shall
have no right to any severance payment unless McNeely is terminated as provided in
Section 3(a) of this Agreement."
The above language will still guarantee to McNeely the same full twelve months' salary payment
in the event he is terminated without cause at any time during any of the last twelve months of
this Agreement.
In signing off on this agreement under the statement, "APPROVED AS TO FORM "the
undersigned is expressing his opinion that the agreement is lawful under the laws of the State of
California and is not inconsistent with the San Bernardino City Charter and/or the San
Bernardino City Municipal Code. The undersigned does not express an opinion beyond that
indicated above, and, specifically expresses no opinion as to the advisability of the terms of the
proposed Agreement nor whether this Agreement constitutes a"good deal"or otherwise for the
City. The approval of this document as worded is a matter of policy for the Mayor and Common
Council to decide.
espectfully submitted,ub
ames F. Penman
City Attorney