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HomeMy WebLinkAbout02.13.06 Special Council Minutes SPECIAL COUNCIL MEETING MINUTES February 13, 2006 1. CALL TO ORDER Mayor Soderberg called the meeting to order at 5 :43 p.m. 2. APPROVE AGENDA MOTION by McKnight, second by Fogarty to approve the agenda. APIF, MOTION CARRIED. 3. CONSIDERATION OF CITY ADMINISTRATOR CONTRACT City Attorney J amnik presented to Council the agreement with Peter Herlofsky for City Administrator. Employment will begin in 90 days, there is a 6-month severance pay schedule, starting salary will be $100,000 which is the annual salary maximum Council had posted, but it does provide for increases over the next few years to $120,000 annual salary at the beginning or end of the third year however the schedule works. The sick and vacation leave is a little less than cities normal policies for seniority but cumulative it will give more flexibility because it constitutes personal leave rather than a categorized vacation and sick leave. The rest of the document is similar to previous contracts. The moving expense was set at $10,000 which is more than Council had seen previously. As far as the start date, it is 90 days out, but he will try to appear faster than that. There are some options Attorney Jamnik will present at the next Council meeting for the goal- setting retreat. Mr. Herlofsky is checking his schedule to see ifhe can make it for the retreat as it is scheduled. Mayor Soderberg asked if Attorney Jamnik discussed the cell phone allowance with Mr. Herlofsky. Attorney Jamnik stated the contract includes a $25 stipend for a cell phone. Mr. Herlofsky will discuss this more when he starts but he prefers to have the stipend and use his own phone. Attorney J amnik explained to him that the general practice is to have the Nextel phone provided by the City, but he preferred to have this in the contract as well. One of his concerns is co-mingling personal calls with business calls and that is a little easier to do with a stipend than with a City phone. Mayor Soderberg asked if the cost to provide a phone to Mr. Herlofsky would be greater than $25 ifhe had a City phone. Administrative Services Director Shadick replied the monthly fee would be $36 for a City phone. Mayor Soderberg noted this is a better deal for the City. Attorney Jamnik noted it depends on the type of phone and how compatible it is with the City system. Mr. Herlofsky will discuss this when he starts. Mayor Soderberg stated he wants the consideration to be consistent with what they advertised. It soon became apparent that it might be difficult to conclude this had we stopped at $100,000. He has been told that we would probably have to pay $115,000 - $120,000 for this type of candidate. In order to maintain consistency with what was advertised and to get his type of candidate he personally views this as starting him at what his worth would be but doing it over a period of three years, as opposed to looking at it as step increases. Special Council Meeting February 13, 2006 Page 2 Councilmember McKnight stated as far as the salary, he feels we have met all of the goals with the $100,000 start. The third year stays within the current top ofthe scale and with the salary cap change this year for City and County Administrators these numbers will be right in the ballpark each of these years. He had no qualms about this. It is a lot of money, but that is what it costs to get a good Administrator. He was very comfortable with the salary. Councilmember Fogarty thanked Attorney Jamnik for his hard work on this. She realized it was a tough negotiation. Councilmember Pritzlaffreferred to some e-mailsfromAttorneyJamnik.mainly the last one where this salary increase was set whether there is a satisfactory performance review or not. Attorney J amnik replied that is correct, however this contract remains terminable. It is an all or nothing type of situation. If the Council does not view his performance as satisfactory, Council's choice will be hard. It will be to terminate the contract or to give him the increase. Part ofthis was negotiated in light ofthe low starting salary compared to what his existing salary is as well as the progression up to that amount. We did compromise between a $100,000 start and a higher start. Councilmember Pritzlaff stated his problem with that is if the performance review does not come back satisfactory but does not warrant termination we have nothing in the contract looking at giving a certain amount of that. Attorney J amnik replied that is correct. You have to give it to him or re- negotiate the agreement. Mayor Soderberg stated the other alternative would be to start him out at a higher salary initially. He had a problem with doing that because we advertised at a certain rate. His view is that we are starting him at a higher salary but we are doing it incrementally over a period of time. Councilmember Pritzlaff stated his other issue is that the $120,000 will be after the second year, so during his third year he will be at $120,000 - from $100,000 six months later to $105,000 to another six months later to $110,000 and then after the second year. He would rather have seen the top at $115,000 after the second year. The other issue is the moving expense, that we are $5,000 higher than what we originally authorized Attorney J amnik to offer him. At the last Council Meeting we were at $7500 which Attorney Jamnik commented that he went beyond Council's approval. We were at $2500 more than what was approved and now we are another $2500 more than that. Mr. Herlofsky is proposing this as moving expense but he is also writing it in there as realtor fees. Councilmember Pritzlaffwas not comfortable paying any type of realtor fees on someone selling their house the way property values have increased. Councilmember Wilson stated it has been challenging since the August/September parting with Mr. Urbia. He appreciated Mayor Soderberg and Councilmember McKnight initially putting a lot of work in getting some good candidates and Attorney Jamnik worked overtime to get us to the point we are at. Councilmember Wilson was not comfortable with the situation they arrived at. He knows we need a good quality, professional Administrator. He feels this individual, while he will do some good things for the City and has the capability and has demonstrated there is at least a 50% chance or better that the relationship between the City and the school district will improve under his leadership which that by itself would be a very positive thing for the City. Regarding the salary, $100,000 - $120,000 is consistent with our neighbors. When he applies for ajob within the first couple minutes he looks to the salary. Does the salary look like something he is comfortable with? Some people have declined pursuing ajob that was of Special Council Meeting February 13, 2006 Page 3 interest to them because the salary did not seem where they wanted it to be. He felt that is the situation we have here and the reason why we have the agreement structured the way we do. Normally when you move from one position to another you want to look at a 10% increase. Here he is looking at a 4% - 5% and so then the City is forced to give a 10% increase without any type of contingency on a satisfactory performance review. That is really tough for him to swallow. We have a lot of talented people that work for the City, the management team, all the way down to the mechanics, the parks and recreation people, everyone. They are looking at 2.75% annual increases. To look at 10%, he feels even though it is a different category of an employee, you could argue the Administrator is one of the most important employees, 10% could be reasonably viewed by other employees as aren't I as valuable an employee to the City and I am only getting a 2.75% increase. There are some possibilities of creating that type of division. He does not wish for that to happen and does not think it will happen. For all the positive things about Mr. Herlofsky, his resume shows, and he stated during his interviews that he likes to move to different opportunities and during the course of his tenure, probably within the first three years, might interview for other positions. That is his prerogative to do so. His resume suggests a 3-5 year pattern with various organizations. The City is at a little bit of risk here. He hoped that would not happen. He is 100% behind the Council. This is a team decision, but he does not like the built in increases without the performance review. Granted it is acknowledged there is a performance review prior to approval of the annual budget. There is also a $10,000 moving expense. He believes Mr. Herlofsky is more interested in coming to the Twin Cities area and has a passion for being in this area as opposed to being in Farmington. He hoped he is wrong and on every count he is making. These are the reasons he will be voting against the contract. Councilmember Pritzlaff stated he will also vote no on the agreement. There is too much that he does not think is fair to the City itself. He is not willing to give this much of the City to one person coming in. He will stand 100% behind Mr. Herlofsky if he is the City Administrator. He believed he would be a good Administrator, but the numbers in this agreement and what has lead him to this, money wise and contract wise he cannot see this being a good move for the City. He sees this as giving a lot of the City away. He will support Mr. Herlofsky if he becomes the City Administrator, but he will not support his agreement. MOTION by Fogarty, second by McKnight to approve the agreement with Mr. Peter Herlofsky for City Administrator. Voting for: Soderberg, Fogarty, McKnight. Voting against: Pritzlaff, Wilson. MOTION CARRIED. City Attorney Jamnik stated he will have the Mayor sign the contract and send it to Mr. Herlofsky. The notice he has to provide will be put into Crow Wing County this week. So the offer is conditioned on him leaving in contractually good standing with the county and notifying them appropriately. Councilmember Fogarty asked about information on the retreat. Attorney Jamnik stated Mr. Herlofsky will be traveling during the time scheduled for the goal-setting retreat. Attorney Jamnik was trying to find an alternate time if one is available for a follow-up. There may still be a benefit for the Council to meet, even if Mr. Herlofsky is not there, but he would possibly be available before his official start date to come the third week of April. Attorney Jamnik will check on availability with Council and staff and will bring back dates at the February 21,2006 Council meeting. Special Council Meeting February 13, 2006 Page 4 4. ADJOURN MOTION by Fogarty, second by McKnight to adjourn at 6:02 p.m. APIF, MOTION CARRIED. Respectfully submitted, c~~ }/Y7~<./ Cynthia Muller Executive Assistant