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05/22/1997CITY COMMISSION SPECIAL MEETING CITY OF CLEARWATER May 22, 1997 Present: Betty Deptula City Manager Rita Garvey Mayor Bob Clark City Commissioner Ed Hooper City Commissioner J. B. Johnson City Commissioner Karen Seel City Commissioner Pam Akin City Attorney Mary K. “Sue” Diana Assistant City Clerk Brenda Moses Board Reporter Mayor Garvey called the meeting to order at 10:35 a.m. at Clearwater Sailing Center, Clearwater, for the purpose of discussing the City Manager contract. City Attorney, Pam Akin reviewed the negotiations that have taken place with Mr. Michael Roberto, the Commission’s first choice as the new City Manager. She referred to statistics compiled from thirteen Florida municipalities. Mr. Roberto is requesting a salary of $104,00; a retirement contribution of $15,600; a car allowance of $4,200; a contribution of $2,511 to his current Universal Life insurance policy; family health insurance coverage of $3,900; private disability insurance of $2,348; an expense allowance of $3,600; 12 months severance plus all accumulated leave; unified leave of 40 days (includes sick, annual and floating holidays) to be accrued or cashed out during the year or at separation; relocation expenses of $5,000; housing expenses up to a maximum of $9,000; travel expenses up to a maximum of $1,200; and real estate fees (existing home) of $12,000. The total compensation package being proposed by Mr. Roberto totals $162,980. Discussion ensued in regard to the City’s retirement plan. It was noted Mr. Roberto currently has a 401A deferred compensation plan that works in conjunction with social security. He is proposing the City continue it. In response to a question, Ms. Akin said the normal contribution to the City’s 457 plan is 6%. Discussion ensued in regard to Mr. Roberto’s request for an expense allowance and it was indicated the City’s policy is to reimburse for memberships in civic organizations and for reasonable expenses. Discussion ensued in regard to family health insurance coverage. Ms. Akin indicated this benefit is not uncommon for top level employees, however, Clearwater has never offered it. Discussion ensued in regard to Mr. Roberto’s life insurance plan. Ms. Akin indicated Mr. Roberto prefers the City contribute to his current Universal Life policy in lieu of the 1% life insurance benefit the City presently offers. Discussion ensued in regard to disability insurance. Ms. Akin indicated Mr. Roberto has a private plan whereas the City has a group plan. She indicated the benefits are different between the two and the City plan costs $710. There is a difference of $1,500 between the private plan and the City’s group plan. Discussion ensued in regard to Mr. Roberto’s proposed severance package of 12 months salary plus all accumulated leave. Ms. Akin said this proposal is not unheard of, however is higher than the norm. She said the typical benefit for City Managers is 6 months. Ms. Akin noted the current City Manager and City Attorney have a 3-month severance plan. A remark was made the City has taken 6 months to go through the process of advertising, iterviewing and selecting a candidate for City Manager, and it is not uncommon for a 12-month request for severance pay for a high level position. Currently, Mr. Roberto has a benefit that allows him to cash in his days if he does not use them. That is a unique benefit to South Miami Beach and is not commonly found in government. Discussion ensued regarding leave time. Currently all entry level employees are treated the same. They receive 10 days vacation, 12 days sick leave, and 3 floating holidays per year for a total of 25 days annually. The leave is accrued at the end of the year with the exception of floating holidays. In response to a question, it was indicated most contract employees are able to accumulate 3 years worth of vacation. There is a cap on sick leave. Ms. Akin indicated the 40 days of leave time being requested by Mr. Roberto would include sick, annual and floating holidays. She noted issues of great importance to Mr. Roberto are retirement, severance, and leave plans. The proposed unified leave plan is in actuality additional severance pay. Relocation expenses were discussed and Ms. Akin indicated Mr. Roberto’s actual cost to move would be close to $5,000. Housing costs for temporary maintenance of two households, moving expenses, travel expenses, and real estate fees were scrutinized. It was noted the payment of real estate commission was typical. Ms. Akin believed Mr. Roberto to be firm in his request for a salary of $104,000. The vehicle allowance of $4,200 being requested is less than the City pays currently and a contribution to his Universal Life policy would be an additional $210 based upon the City paying up to 1% of an employee’s salary up to half of the premium. She did not find this to be out of line. Ms. Akin said family health insurance is also extremely important to Mr. Roberto. It was noted family coverage is not typical within the unions. The City Attorney indicated family insurance coverage is not unusual for high level positions, however the City has never paid for this coverage. She said it is not unusual for the City Manager to have different benefits than other employees. It was noted the City pays approximately $3,700 per year for employee health coverage. Discussion returned to disability insurance and Ms. Akin indicated Mr. Roberto suggested splitting the additional cost to the City of $710. She noted he also dropped his expense allowance down to $2,400. The City currently pays these expenses on a reimbursement basis. Ms. Akin stated Mr. Roberto is concerned regarding the upcoming election next year. He feels he will barely have enough time to gain stability. This is his reason for requesting a severance of 12 months for the first 3 years, 6 months following and 6 months thereafter which would affect the cap on the leave issue. In response to a question regarding the leave cap, it was indicated Mr. Roberto’s goal is to eventually have enough accrued days of combined leave to cover himself for an additional 6 months. This additional 6 months would apply only if he was fired or asked to resign. It would not apply if he voluntarily leaves or is asked to leave for just cause. Discussion ensued in regard to the requested $15,000 relocation expenses and Ms. Akin indicated this would be a lump sum payment. Ms. Akin reviewed City Manager Betty Deptula’s total compensation package of $109,872 indicating this amount does not include FICA or Medicare. This would cost an additional $5,000. Discussion ensued in regard to Mr. Roberto’s initial request to accrue 40 days a year leave and it was indicated a cash out provision could cost the City $18,800 annually. The initial proposal of approximately $163,000 provides for a cash out provision. This could result in a cost to the City of $18,800 annually should Mr. Roberto choose not to carry over leave. Ms. Akin noted the latest proposal did not include a cash out provision. Ms. Akin spoke to Mr. Roberto this morning and at the end of negotiations, some figures had changed. The total compensation package came to approximately $140,555. Mr. Roberto is very positive and interested in the position. She said he will be in town this Saturday and she has tentatively planned to meet with him depending on today’s outcome. She asked the Commission for direction regarding the negotiations up to this point. She noted Mr. Roberto is concerned about the upcoming City Commission election. An opinion was expressed Mr. Roberto should be confident he can earn the Commission’s respect, he has been involved in elections before. It was noted his present community does not have term limits. An opinion was expressed 9 and 12 months severance are too much. Discussion continued in regard to 6 months severance with a cap of 138 days. There was also discussion regarding current employees, depending upon their hire date, cashing out or extending their retirement when they retire and getting one-half of their sick leave. A question was raised whether the City should be paying the realtor fee for selling Mr. Roberto’s house. Ms. Akin noted this is not a typical benefit. A suggestion was made to come up with a maximum amount for his move to Clearwater allowing Mr. Roberto to use as he wishes. It was questioned whether it is fair to the citizens of Clearwater to pay Mr. Roberto a salary of $140,550. Ms. Akin noted what Mr. Roberto is asking is not out of line with the market. It is out of line with what Clearwater has ever done. She said Clearwater is spoiled as the last two city managers have been promoted from within keeping costs down. In response to a question, Mr. Akin believed the current proposal is close to a bottom line offer from Mr. Roberto. Concern was expressed in paying for family health insurance coverage and rent while looking for a house. Ms. Akin noted Mr. Roberto’s bid from the movers was $5,000. This is just for the move. Discussion ensued in regard to the relocation and associated expenses of coming to Clearwater. Consensus was $15,000 for expenses is too high. Discussion ensued regarding a 15% retirement contribution. It was indicated Clearwater currently pays 6% into a deferred compensation fund. An opinion was expressed that in a real world scenario a $104,000 salary is on the low side in today’s market. It was noted Mr. Roberto’s salary theoretically totals $119,600 due to a 15% retirement benefit request. The normal 6% City contribution would be approximately $9,000 additional. Discussion ensued in regard to the vehicle allowance of $4200 being proposed. Consensus was to offer this amount. Discussion ensued in regard to Mr. Roberto’s Universal Life policy. Consensus was to contribute to this plan in lieu of City’s 1% plan. Discussion ensued in regard to private disability insurance. An offer of $1,040 towards Mr. Roberto’s life insurance was suggested and Mr. Roberto asked for an additional $210. Consensus was to allow the City’s group contribution to go to the private plan. Discussion ensued in regard to an expense allowance. Consensus was for reasonable reimbursement without a cap. Ms. Akin suggested reviewing the City’s reimbursement policy at a later date. Discussion ensued regarding Mr. Roberto’s proposed severance package and Ms. Akin said this issue could be the deal breaker. Consensus was for 6 months severance for the first two years then 4 months thereafter. Discussion ensued in regard to a unified leave pool. A suggestion was made to allow some use of the sick leave now. It was noted it is not uncommon to get leave up front. Concern was expressed in sick leave usage and reimbursement affecting bargaining. In response to a question it was indicated 10 days vacation leave is normal for new employees. An opinion was expressed 40 days unified leave is too much. Consensus was 25 days per year plus 25 days up front with a 90 day accrual cap and no cash out provision for unused leave. Discussion returned to relocation and associated expenses. Consensus was to offer $8,000 for these expenses. The Commission’s counter offer is as follows: (1) a salary of $104,000; (2) a retirement contribution of $15,600; (3) a vehicle allowance of $4,200; (4) contribution to Universal Life in lieu of the City’s 1% plan; (5) no family health insurance coverage, (6) City contribution to private disability plan rather than group; (7) reasonable reimbursement for expenses as per current City policy; (8) 6 months severance pay for the first 2 years; 4 months thereafter; (9) 25 days leave (includes vacation, sick, and floating holidays) per year plus 25 days up front, 90 day accrual, no cash out provision for unused leave; and (10) $8,000 in relocation and associated expenses. Ms. Akin noted she will be meeting with Mr. Roberto on Saturday to present the Commission’s counter offer. A special meeting to discuss Mr. Roberto’s acceptance or counter offer was scheduled for May 27, 1997 at 1:30 p.m. at City Hall. Specific location to be determined. It was noted that the City Commission’s second choice for City Manager is in the top 3 candidates for a position. A final decision is expected on Saturday. The meeting adjourned at 12:10 p.m.