Title
Adopt Resolution to:
a. Approve and authorize execution of Employment Agreement Amendment No. 3 with NMC Chief Financial Officer Daniel Leon including.
b. Ratify original Agreement and Amendments Nos. 1 and 2 to the Employment Agreement with NMC Chief Financial Officer Daniel Leon and all compensation paid under those amendments. (ADDED VIA ADDENDUM)
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Adopt Resolution to:
1. Approve and authorize execution of Employment Agreement Amendment No. 3 with NMC Chief Financial Officer Daniel Leon.
2. Ratify original Agreement and Amendments Nos. 1 and 2 to the Employment Agreement with NMC Chief Financial Officer Daniel Leon and all compensation paid under the Agreement and those amendments.
SUMMARY: The Board directed the Interim NMC-CEO and County Counsel to negotiate an amendment to NMC Chief Financial Officer's employment agreement. Presented for Board consideration is a resolution and contract amendment consistent with Board direction. This resolution and amendment will ratify actions by the prior NMC-CEO regarding employment terms and compensation. An important term of this amendment includes an increase in the employee paid share of PERS costs. Also, compensation is set at the top of the salary range for this position, however performance pay is eliminated.
DISCUSSION: On December 30, 2010, the NMC-CEO executed an Employment Agreement with Daniel Leon to become the Chief financial Officer of NMC, effective February 1, 2011. The agreement contained terms of employment, including salary and a performance incentive pay plan with payouts based on meeting performance metrics. Over the succeeding three years, two amendments to the employment agreement were prepared and implemented with salary increases. The performance incentive plan remained the same. Over the years, performance pay has averaged approximately 14% of salary. Amendment No. 1 was fully executed and implemented in January 2012. The un-executed Amendment No. 2 was implemented in May 2013 with a salary increase. The original contract and two amendments are attached hereto for reference.
Both regular and performance incentive compensation were paid over the years consistent with the original agreement and these amendments. However, the original agreement and the amendments were never presented to or approved by the Board. The Agreement and Amendment No. 1 were approved as to form by County Counsel and as to fiscal provisions by the Auditor-Controller. Pursuant to the County Code, all contracts of the County are approved by County Counsel prior to execution or submission to the Board. In addition, the Auditor-Controller reviews the fiscal provisions of most contracts prior to execution or Board approval. Contract approval by County Counsel and Auditor-Controller does not mean Board approval is unnecessary; rather, these are steps in the contract authorization process.
Approval of the resolution and amendment 3 by the Board will ratify the original Agreement and prior 2 amendments and the compensation paid there under. Amendment 3 also makes significant changes for future compensation, such as elimination of performance pay provisions, and brings this contract in line with most other County employees by requiring an increased employee contribution to PERS costs. Mr. Leon will also be treated similarly to other "Y" Unit executives for benefits and future compensation adjustments.
OTHER AGENCY INVOLVEMENT: Auditor-Controller and CAO have reviewed the Amendment.
FINANCING: Costs for this amendment are included within the NMC budget.
Prepared by: Charles J. McKee, County Counsel
Approved by: Dr. Kelly O'Keefe, NMC-CEO
Attachments: Amendment 3 CFO Leon Employment Agreement
Amendments 1 and 2
Resolution re Ratification of CFO Agreements clean