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CITY OF TWENTYNINE PALMS EMPLOYMENT AGREEMENT This Employment Agreement (the "Agreement") is made this 30th day of April, 2013 (the "Effective Date"), by and between the City of Twentynine Palms, California, a municipal corporation, hereinafter referred to as "City" and Joe Guzzetta, hereinafter referred to as "Manager" or "City Manager." City and City Manager are sometimes referred to individually herein as "Party" or collectively as "Parties." Recitals WHEREAS, City is a municipal corporation, the operation of which involves securing the services of a qualified professional City Manager; and WHEREAS, City Manager can provide the services and possesses the professional skills required by City and is available to City; and WHEREAS, it is the desire of the City Council of City to retain the services of the City Manager; and WHEREAS, it is the desire of the City Council of City to provide certain benefits, establish certain conditions of employment, set certain work conditions, and provide an equitable means of terminating City Manager's employment; and WHEREAS, the arrangement set forth in this contract represents an efficient and economical procedure to accomplish City's goal. NOW, THEREFORE, CITY AND CITY MANAGER, in consideration of the mutual covenants and agreements herein contained, agree as follows: Section 1.

Employment and Duties.

The City Council hereby agrees to employ the Manager as the chief executive officer of the City to perform and carry out the duties and functions of the office of City Manager as specified in the City's ordinances, City's rules and regulations, and State and Federal Law, and to perform such other legally permissible and proper duties and functions as the City Council shall from time to time assign. The Manager agrees that to the best of his ability and experience he will at all times loyally and conscientiously perform all of the duties and obligations required of him as specified in the City's ordinances, City's rules and regulations, and State and Federal Law. The Manager shall be subject to the control and direction of the City Council. Directives by members of the City Council to the City's staff shall be through the Manager. City Manager hereby agrees that he shall commence his employment obligations with the City within thirty (30) days ofthe Effective Date of this Agreement. The date upon which City Manager commences employment with the City shall hereinafter be referred to as the "Employment Date."

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Section 2.

Term of Employment At-Will Employment Status.

A. Tenn. This contract shall commence on the Employment Date and shall remain in full force and effect for a period of Five (5) years unless terminated prior to this time by either City Councilor City Manager in accordance with the provisions of this Agreement. City Manager may request a one-year extension of this Agreement at any time, subject to the City Council's written approval. The City Council and City Manager may mutually agree in writing to extend the term of this Agreement upon its expiration. Nothing in this Agreement shall prevent, limit, or otherwise interfere with the right of the City Council to terminate the services of City Manager at any time, subject only to the provisions set forth in this Agreement. B. At Will. City Manager holds his employment at the pleasure of the City Council and is an At Will employee. The City Council of City may terminate City Manager's employment at any time, for any reason that is not in violation of the public policy of the State of California, and may give City Manager notice of termination at any time. City Manager agrees that no representative of City has made or can make any promises, statements, or representations which state or imply that City Manager is hired or retained under any terms other than those stated herein. Section 3.

Three Month's Severance Pay Upon Termination Without Cause After 90 Days of Employment.

In the event Manager is terminated without cause on or after the ninety-first (91st) day following his Employment Date, Manager shall be entitled to receive the following as severance pay: a lump sum equal to the monthly Base Salary noted in Section 6(A) below, in the amount applicable as ofthe effective date of the termination, multiplied by three (3). Manager shall also be paid a lump sum for all accrued, but unused vacation time, and shall be paid for any unused sick leave in accordance with City's Personnel Rules and Regulations. If Manager is terminated without cause before the ninety-first (91 st) following his Employment Date, Manager shall not receive any severance pay; however, Manager shall be paid a lump sum for all accrued, but unused vacation time, and shall be paid for any unused sick leave in accordance with City's Personnel Rules and Regulations. Severance pay provided under this Section shall be the Manager's sole and exclusive remedy for any and all claims for damages related to this employment pursuant to this Agreement and shall be in lieu of any other notice, hearing or severance rights the Manager may have under any other code or regulation ofthe City. Manager hereby waives any cause of action against City, its employees, officers or agents for any termination pursuant to the terms of this Agreement. Section 4.

Termination For Cause.

The City Council may terminate Manager's employment for cause at any time in the event of the Manager's misconduct as defined in this Section. Manager shall not be entitled to any severance payment as set forth in Section 3 above in the event Manager is terminated for cause. The term misconduct, as used in this Agreement, shall include but not be limited to (a) dishonest or 2


improper acts committed by the Manager which are not conforming to the generally acceptable standards of conduct for city managers; (b) the Manager's conviction for the violation of any criminal law committed at any time (except crimes defined as infractions and any minor traffic offenses); (c) gross negligence; or (d) malfeasance, which shall mean and refer to wrongful or unlawful acts committed by the Manager, which the Manager has no legal right or authority to perform, and which interrupts or interferes with the performance of his official duties. Section 5.

Termination by Manager.

The Manager may voluntarily resign and thereby terminate this Agreement upon written notice to the City Council and shall give thirty (30) days prior written notice. Manager is not entitled to severance pay as set forth in Section 3 above upon his voluntary resignation. In the case of voluntary resignation, the Manager shall be paid a lump sum for all accrued, but unused vacation time. Unused sick leave shall be paid in accordance with City's Personnel Rules and Regulations. Section 6.

Compensation

The Manager shall receive the following compensation in consideration for his services: A. Base Salary. To ensure Manager is maintained at an appropriate compensation level commensurate with his supervisory responsibilities and status as the organization's chief executive officer, the City Council has established a salary (the "Base Salary") of approximately Fifteen Thousand, Three Hundred, Thirty-Three Dollars and ThirtyThree Cents ($15,333.33) per month or One Hundred Eighty-Four Thousand Dollars ($184,000) per year, paid bi-weekly in accordance with City's payroll for other City employees. B. Overtime. The Manager shall be an exempt managerial employee and not subject to any overtime compensation under the Fair Labor Standards Act (FSLA). C. Compensation Reductions. City shall not, at any time during the term of this Agreement reduce the salary, compensation or other financial benefits of Manager once granted, excepting however, Manager's compensation may be decreased in an amount that is the pro-rata equivalent of any salary reduction implemented for all management employees as defined herein. Section 7.

Benefits

In addition to the compensation set forth in Section 6 ofthis Agreement, and as additional consideration, Manager shall be entitled to the following benefits: A. Vacation. Upon his Employment Date, City Manager shall be entitled to Forty (40) hours of vacation time, which shall be used in accordance with the City's Personnel Rules and Regulations. Manager shall accrue, cash out, and otherwise use vacation time as set forth in the City's Personnel Rules and Regulations, except that he shall accrue a greater amount 3


of time than set forth in the Rules and Regulations. In particular, City Manager shall be entitled to One Hundred Sixty (160) hours of annual vacation time (accrued as set forth in the Personnel Rules and Regulations), and may accrue a maximum of Three Hundred Twenty (320) hours of vacation time. In addition, should the need arise, Manager may request additional vacation time from the City Council, which may be granted or denied in the City Council's sole and absolute discretion. The Manager's vacation shall be scheduled in coordination with the City Council. B. Retirement. The City participates in the California Public Employees Retirement System (CaIPERS). City shall report and pay required employer and employee contributions on behalf of Manager at the 2.5% at age 55 program. Contributions on behalf of the Manager shall be based on Manager's Base Salary as it may be adjusted from time to time. In addition, City agrees to deposit Six Thousand Dollars ($6,000) as deferred compensation into Manager's International City Management Association Retirement Corporation (ICMARC) Section 401 Money Purchase Plan or Section 457 Deferred Compensation Plan or such other qualified retirement plan as may be designated by Manager as permitted by law. Manager may participate in deferred compensation programs and other retirement programs available to the City at his cost as he chooses, and as permitted by applicable program rules and regulations. Manager may contribute additional amounts from his Base Salary to the retirement program. Except as may otherwise be provided by law or specific retirement plan rules, vesting will be and remain at One Hundred Percent (100%) from date of employment and Manager's ownership in said plan and program assets shall survive the termination of this Agreement and termination of Manager's employment with the City. C. Health Insurance. City Manager has been informed and understands that he is eligible to participate in the City's Health Insurance Policy. City Manager has specifically declined this benefit. City Manager represents that he has his own Health Insurance Policy, which he wishes to maintain, rather than enrolling in the City's program. As a result, the City will not be providing any Health Insurance benefits to City Manager as part of this Agreement. City Manager shall maintain adequate Health Insurance at all times, and shall keep evidence of his Health Insurance in his personnel file at all times, and shall make said evidence available upon request, at any time. D. Sick Leave. Upon his Employment Date, City Manager shall be entitled to Forty (40) hours of sick leave, which shall be used in accordance with the City's Personnel Rules and Regulations. Manager shall accrue sick leave at the same rate as other management employees, which currently set at Ninety-Six (96) hours per year or 3.69 hours per pay period. Manager's accrual of and ability to cash out or convert sick leave, including upon separation from employment, shall be as provided in City's Personnel Rules and Regulations.

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E. Disability. The City shall pay the cost and provide the Manager with short-term and long-term disability benefits as provided to other management and regular City employees. F. Job-Related Expense Reimbursement. The City will pay the Manager's business expenses as provided by City policies and regulations, as they may be amended from time to time. G. Technical Equipment. Upon commencement of employment, and assuming provided for in the City's budget or, if not so provided, if specifically approved by the Council, City shall provide Manager with any equipment necessary to perform Manager's duties at Manager's request and shall periodically update such equipment as required. H. Holidays. The Manager shall be entitled to observe City's official holidays as those may be amended from time to time. I.

Dues and Subscriptions. The City shall pay for the Manager's professional dues and subscriptions, to the degree included in the City's budget, necessary for his continued full participation in national, regional, state and local associations and organizations necessary and desirable for continued professional growth and advancement and for the good of the City.

J. Professional Development. The City shall pay for travel and subsistence expenses for the Manager, to the degree included in the City's budget, for professional and official travel, meetings and similar functions necessary for City, including, but not limited to, state league of cities, and such other national, regional, state and local governmental groups and committees of which the Manager is a member as well as short courses, institutes and seminars necessary for the Manager's professional development and the good of the City. K. Civic Club Memberships. The City Council and the Manager recognize the desirability of representation in and before local civic and other organizations, and the Manager is authorized to become a member of local civic clubs or organizations for which, to the degree included in the City's budget, the City will pay the annual membership dues. The Manager shall notify the City Council of such memberships and regularly attend such meetings. L. General Benefits Provided to Management Employees. The Manager's salary and benefits will be adjusted in the same manner as approved by the City Council for other management employees. For purposes of this Agreement, the term management employees shall mean: City's Director of Finance, Community Development Director, Community Service Director, City Clerk and Public Works Superintendent. Section 8.

Office and Time Spent

Manager understands that he may need to be available twenty-four (24) hours per day, seven days per week. The parties recognize that Manager must devote a great deal of time outside 5


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normal office hours to the business of the City. To that end, the Manager will be allowed to temporarily adjust his work schedule as deemed appropriate to accomplish the City's business. Section 9.

Residency

Manager agrees to become a resident of the City of Twentynine Palms within Two Hundred Seventy (270) days of his Employment Date .. Section 10.

Bonding

The city shall bear the full cost of any fidelity or other bonds required of the Manager under any law or ordinance. Section 11.

Performance Evaluations

The City Council shall regularly evaluate the performance ofthe Manager. Said review and evaluation shall be in accordance with guidelines and criterion developed jointly by the City Council and the Manager. Said criterion may be added to or deleted from as the City Council and the Manger may from time to time determine. The City Council shall provide the Manager with adequate opportunity to discuss his evaluation in a closed session. The City Council, with the recommendations from Manager, shall define such goals and performance objectives which they determine necessary for the proper and efficient operation of the City. The Manager will assist the City council in establishing relative priority among the various goals and objectives established by the City Council. The first performance review shall take place on or about the sixth (6) month anniversary of City Manager's employment with the City. If a majority of the City Council determines that they are satisfied with the City Manager's job performance, he may be receive a salary increase in an amount not to exceed Five Percent (5%) of his Base Salary, subject to the sole discretion of the City Council. . After the first six-month performance review, the City Manager's reviews shall take place on an annual basis, after the completion of the fiscal year. Salary increases for any subsequent annual reviews shall be considered by the City Council dependent on the results ofthe review, but shall be subject to the sole discretion of the City Council. Section 12.

Indemnification

City shall defend, hold harmless, and indemnify Manager against any tort, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of this Agreement, or any alleged act or omission occurring in the course and scope of performance of Manager's duties in accordance with the provisions of California Government Code Section 825. Section 13.

Other Terms and Conditions of Employment

The City Council and the Manager shall jointly fix any other terms and conditions of employment as it may determine from time to time, relating to the performance of the Manager provided such terms and conditions are not in conflict with the provisions of this Agreement or any applicable law. 6


Section 14.

General Provisions

A. California Law. This Agreement is made in and shall be construed and enforced under the laws of the State of California. B. Waiver. A waiver of any term or condition of this Agreement shall not be construed as a general waiver by the City or the Manager, and the City or the Manager shall be free to reinstate any such term or condition, with or without notice. C. Applicability. All provisions of the City ordinances and rules and regulations shall apply to Manager as they would to other management employees of the City except to the degree they would conflict with the terms of this Agreement or as expressly modified herein. D. Amendment. This Agreement may be amended from time to time, as mutually agreed to by the parties. No amendment or variation of the terms of this Agreement shall be valid unless made in writing, signed by Manager and approved by minute action or resolution of the City Council. E. Assignment. This agreement may not be assigned by either Party. F. Binding Effect. This Agreement shall bind all Parties, their respective heirs, personal representatives, or assigns, but nothing herein shall be construed as an authorization or right of any Party to assign his/its rights or obligations hereunder. G. Integration. This Agreement shall supersede all prior agreements between the parties hereto; both written and oral, and this Agreement alone shall govern and control their duties and obligation and liabilities. This Agreement shall supersede conflicting provisions of City policies. H. Severability. If any provision, or any portion thereof, contained in this Agreement is held unconstitutional, invalid or unenforceable, the remainder of the Agreement or portion thereof shall be deemed severable and shall not be affected and shall remain in full force and effect.

IN WITNESS WHEREOF, the parties authorized to do so have executed this Agreement as of the date set out above.

JoelKJink,Mayor

Joe Guzzetta, City Manager

Approved as to form:

Attest:

A. Patrick Munoz, City Attorney

Cindy Villescas, City Clerk

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