CC SR 20230221 E - City Manager Contract Amendment 3
CITY COUNCIL MEETING DATE: 02/21/2023
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to approve Amendment No. 3 to the employment
agreement with Mr. Ara M. Mihranian, AICP, as City Manager.
RECOMMENDED COUNCIL ACTION:
(1) Approve Amendment No. 3 to City Manager Employment Agreement, thereby
extending the terms for an additional three years with a term date of February 18,
2026, and increasing the annual salary compensation of the City Manager by 3%
to an annual salary of $232,800 and authorize the Mayor to execute the same on
behalf of the City of Rancho Palos Verdes, the Successor Agency to the Dissolved
Rancho Palos Verdes Redevelopment Agency and the Rancho Palos Verdes
Improvement Authority effective February 19, 2022, the first pay period after the
amendment is approved;
(2) Approve an employee retention payment, not otherwise subject to CalPERS, to
the City Manager of approximately 4.5% of his salary in the amount of $10,500 to
be paid directly to the City Manager; and
(3) Authorize the Mayor and City Clerk to execute the amendment in a form approved
by the City Attorney.
FISCAL IMPACT: The fiscal impact of this amendment is $243,300. If the amendment
is approved, the additional $19,300 will be covered by unspent budget from various
vacancies.
Amount Budgeted: $320,900
Additional Appropriation: N/A
Account Number(s): Various salary and benefit accounts
ORIGINATED BY: Karina Bañales, Deputy City Manager
Trang Nguyen, Finance Director
REVIEWED BY: Same as above
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Amendment No. 3 to the City Manager Employment Agreement (page A-1)
1
B. City Manager Employment Agreement Between City of Rancho Palos
Verdes and Ara M. Mihranian, AICP
C. Amendment No. 1 to the City Manager Employment Agreement
D. Amendment No. 2 to the City Manager Employment Agreement
BACKGROUND:
Mr. Mihranian has now served in the position of City Manager as prescribed by state law
and as codified in Title 2, Chapter 2.08, of the Rancho Palos Verdes Municipal Code for
his third contract year of employment.
On February 7, 2023, the City Council conducted the City Manager’s annual performance
evaluation pursuant to Section 6.2 of the Employment Agreement (Attachment B) during
a lawfully convened closed session. Additionally, pursuant to Section 5.2 of his
Employment Agreement, the City Council and Mr. Mihranian agreed to conduct an annual
salary review concurrently with the City Manager’s annual performance evaluation. In
addition, City Council undertook the salary review required by Section 5.2 of his
Employment Agreement during a lawfully convened closed session. Due to that review,
the City Council and City Manager now desire to amend the Employment Agreement.
Given that the initial term of the City Manager’s Employment Agreement was for a term
of three years, this amendment would extend that term for an additional three years.
DISCUSSION:
Under the terms of the proposed Amendment No. 3 (Attachment A), Section 2.5 of the
Employment Agreement would be amended as follows:
“2.5 Term. The term of this Agreement shall be for three (3) years
commencing from and after the Effective Date, subject to Sections
2.2, 2.3, and/or 2.4 of this Agreement February 19, 2023, and ending
at midnight Pacific standard time on February 18, 2023 2026, unless
termination of this Agreement is effected as provided herein. The
term of the Agreement may be extended by mutual agreement of the
parties in the manner as provided in Section 13.0 of this Agreement.”
Section 5.1 of the Employment Agreement would also be amended as follows:
“5.1 Annual Compensation. Effective February 19, 2023, City
agrees to compensate City Manager for his services rendered
hereunder at an annual salary of TWO HUNDRED TWENTY-SIX
THOUSAND DOLLARS ($226.000) TWO HUNDRED THIRTY-TWO
THOUSAND EIGHT HUNDRED DOLLARS ($232,800) as may be
adjusted, from time-to-time, in accordance with Section 5.3
2
hereinafter, or as this Agreement may be amended. Such salary
shall be payable in installments at the same time as othe r
Department Head employees of City are paid. City Manager shall
pay his contribution to MediCare and SDI.”
“5.1.1 Retention Payment. City hereby affords City Manager a one-
time retention payment of FIFTEEN THOUSAND DOLLARS
($15,000) TEN THOUSAND FIVE HUNDRED DOLLARS ($10,500)
in recognition of his exemplary service to City. Such retention
payment shall be paid directly to City Manager.”
CONCLUSION:
Staff recommends the City Council approve Amendment No. 3 to the City Manager’s
employment agreement and authorize the Mayor to execute the same.
ALTERNATIVES:
In addition to the recommendation, the following alternative action is available for the
City Council’s consideration:
1. Do not approve the amendment.
2. Take other action, as deemed appropriate.
3
1
AMENDMENT NO. 3
TO CITY MANAGER EMPLOYMENT AGREEMENT
This AMENDMENT NO. 3 (“Amendment No. 3”) to that certain “CITY MANAGER
EMPLOYMENT AGREEMENT BETWEEN CITY OF RANCHO PALOS VERDES & ARA
MICHAEL MIHRANIAN, AICP,” entered into February 21, 2023, (the “Employment
Agreement”), is made by and between the CITY OF RANCHO PALOS VERDES, a general law
city & municipal corporation (“City”) and Mr. ARA MICHAEL MIHRANIAN, AICP, an
individual (hereinafter referred as the “City Manager”).
RECITALS
A. City and City Manager have previously entered into the Employment Agreement
whereby City’s City Council employed the City Manager to serve in the position of City Manager
as prescribed by state law and as codified in Title 2, Chapter 2.08, of City’s Municipal Code.
B. City and City Manager have previously entered into Amendment No. 1 the
Employment Agreement, the same being effective January 2, 2021.
C. City and City Manager have previously entered into Amendment No. 2 the
Employment Agreement, the same being effective February 1, 2022.
D. Pursuant to Section 5.2 of the Employment Agreement, City and City Manager
agree to conduct an annual salary review concurrently with the City Manager’s annual
performance evaluation pursuant to Section 6.2 of the Employment Agreement.
E. On February 7, 2023, City’s City Council undertook the annual performance
evaluation and the salary review required by the Section 5.2 of the Employment Agreement during
a lawfully convened closed session.
F. As a consequence of that review, City’s City Council and City Manager now desire
to further amend the Employment Agreement, as amended, as follows:
TERMS
1. Contract Changes. The Employment Agreement, as amended, is further amended
as provided hereinafter. (Deleted text is indicated in strikethrough & added text in bold & italics.)
a. “2.5 Term. The term of this Agreement shall be for three (3) years
commencing from and after the Effective Date, subject to Sections 2.2, 2.3, and/or
2.4 of this Agreement February 19, 2023, and ending at midnight Pacific standard
time on February 18, 2023 2026, unless termination of this Agreement is effected
as provided herein. The term of the Agreement may be extended by mutual
agreement of the parties in the manner as provided in Section 13.0 of this
Agreement.”
b. “5.1 Annual Compensation. Effective February 19, 2023, City
agrees to compensate City Manager for his services rendered hereunder at an annual
A-1
2
salary of TWO HUNDRED TWENTY-SIX THOUSAND DOLLARS ($226.000)
TWO HUNDRED THIRTY-TWO THOUSAND EIGHT HUNDRED DOLLARS
($232,800) as may be adjusted, from time-to-time, in accordance with Section 5.3
hereinafter, or as this Agreement may be amended. Such salary shall be payable in
installments at the same time as other Department Head employees of City are paid.
City Manager shall pay his contribution to MediCare and SDI.”
c. “5.1.1 Retention Payment. City hereby affords City Manager a
one-time retention payment of FIFTEEN THOUSAND DOLLARS ($15,000) TEN
THOUSAND FIVE HUNDRED DOLLARS ($10,500) in recognition of his
exemplary service to City. Such retention payment shall be paid directly to City
Manager.”
2. Continuing Effect of Employment Agreement. Except as amended by this
Amendment No. 3, all other provisions of the Employment Agreement, as amended, shall remain
unchanged and in full force and effect. From and after the date of this Amendment No. 3, whenever
the term “Employment Agreement” appears in the Employment Agreement, it shall mean the
Employment Agreement, as amended by this Amendment No. 3.
3. Affirmation of Employment Agreement; Warranty Re Absence of Breaches or
Defaults. City and City Manager each ratify and reaffirm each and every one of the respective
rights and obligations arising under the Employment Agreement. Each party represents and
warrants to the other that there have been no written or oral modifications to the Employment
Agreement other than as provided herein. Each party represents and warrants to the other that the
Employment Agreement is currently an effective, valid, and binding obligation.
City Manager represents and warrants to City that, as of the date of this Amendment No.
3, City is not in breach or default of any material term of the Employment Agreement and that
there have been no events that, with the passing of time or the giving of notice, or both, would
constitute a material breach or default under the Employment Agreement.
City represents and warrants to City Manager that, as of the date of this Amendment No.
3, City Manager is not in breach or default of any material term of the Employment Agreement
and that there have been no events that, with the passing of time or the giving of notice, or both,
would constitute a material breach or default under the Employment Agreement.
4. Adequate Consideration. The parties hereto irrevocably stipulate and agree
that they have each received adequate and independent consideration for the performance of the
obligations they have undertaken pursuant to this Amendment No. 3.
5. Authority. The persons executing this Amendment No. 3 on behalf of the
parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized
to execute and deliver this Amendment No. 3 on behalf of said party, (iii) by so executing this
Amendment No. 3, such party is formally bound to the provisions of this Amendment, and (iv) the
entering into this Amendment No. 3 does not violate any provision of any other agreement to
which said party is bound.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3 on
the date and year first-above written.
A-2
3
CITY OF RANCHO PALOS VERDES
______________________________
Barbara Ferraro, Mayor
Dated: ________________________
ATTEST:
Teresa Takaoka, City Clerk
APPROVED AS TO FORM:
William Wynder, City Attorney
CITY MANAGER
______________________________
Ara Michael Mihranian, AICP
Dated: __2-14-2023______________________
[END OF SIGNATURES]
A-3