OVERVIEW On December 19, 2022, Lakewood City Council passed a new City Manager employment agreement after receiving incomplete information and having limited Council discussion. Some City Council Members seemed to equate a new agreement with the City Manager performance evaluation while others spoke of contract provisions. The result is an agreement for the City of Lakewood’s highest-paid position that increases the City Manager’s benefits, reduces the City Manager’s accountability, and includes misunderstood provisions. The agreement amendment process started with misunderstandings. From the beginning, the public (and Council) was told that discussions were being held because incentives in the City Manager Employment Agreement expired. In fact, no expiration dates can be found in the previously existing 2014 agreement. (see note 1 below) There is also some confusion regarding the extent of the amendments. Although the Mayor and some Council Members stated that only specific amendments were being changed relative to incentives, important City Manager performance objective evaluation measures were removed (see note 2). Even the head of the negotiating team believed, and stated, that these evaluation objectives remained, although they were actually removed. In addition, at least two Council Members still believed they remained after votes had been cast. Other items were added without discussion, including a new provision for retirement payout for the City Manager, on top of existing retirement benefits. (see note 3) In the end, the entire 2014 agreement was terminated and superseded, although only specific clauses were rewritten in the final 2022 employment agreement. (see note 4) Brief Recap… Public statements from Lakewood City Council members during the December 19 meeting show that City Council members were not clear on what was being discussed. These issues include: City Council’s role is to provide checks and balances related to the financial and executive activities of the City Manager. Checks and balances should begin with implementing a critical review of the proposed City Manager employment agreement. Without a critical review, the public’s interests are not represented. The troublesome fact is, without adequate Council oversight, the City Manager could ask for, and receive, practically anything. HOW DID THIS HAPPEN? A healthy Council review process includes information dissemination and review, discussion with multiple viewpoints, position statements, and the ability to vote based on correct and understood information. In the case of the City Manager Employment Agreement review, these processes failed: One result of the discussion breakdown was the apparent misunderstanding surrounding the role of the City Manager’s performance evaluation. Several Councilors made remarks implying that since the evaluation was good, the employment agreement amendments must also good. One person said we got here because of the performance evaluation and the decision to give her a bonus. Two others commented favorably on performance and referenced similar comments on LakewoodSpeaks. One councilor said that everybody already had a chance to talk about this, apparently during the performance evaluation. In fact, every Council Member who voted for the new agreement and made any comment at all, referenced the performance evaluation more than the agreement. It seems that a majority of Council believed that a favorable performance evaluation meant that the new employment contract could just be “rubber stamped” for approval, with little discussion. Implementation of a “rubber-stamp” process is contrary to the oversight policy inherent in the city charter. It is also evidence of misconceptions about the responsibilities of Council. Does your Council Member know that nothing expired in the City Manager Employment Agreement? Do they know they authorized an additional 3% pay increase over other employees? Did they calculate how much the new incentives cost on top of the existing bonus? Do they know they could ask for redlines or make the argument for additional discussion? Are they willing to have the extra discussion? Please see Dec 19 meeting, Springsteen interview, Olver interview, Able interview, and Shahrezaie interview for reference information. Email comments or corrections. Updated 1/20/23 to remove reference to second defined contribution plan. Footnotes: Note 1: The resolution states “certain incentive provisions that concluded on December 8, 2022” with no other explanation. Inquires to City Council as to what those incentives are have not been answered. The Mayor stated in the meeting that pension benefits expired. However, December 8, 2022, is the date Kathy Hodgson is 100% vested in the City Manager’s defined benefit plan. This plan is unique for City Managers, separate from regular employees and law enforcement. The Manager will get this incentive regardless of the new agreement; “Benefits payable under the Retirement Plan will vest, i.e., become nonforfeitable, in Employee remains employed on the 8th anniversary of this Agreement, on December 8, 2022”. Although “several incentives” are referred to in the Council materials, only this one has a date. “Vesting” does not mean expired. 2014 Agreement below 2014 Employment Agreement Note 2: Below is the new section 5, which completely replaces the previous section 5. Section 5 no longer contains any objective outcomes, shown in the previous contract. Even the mayor, in charge of negotiations, stated several times during the meeting that he believed these measures remained. One Councilor voted for the removal of objective evaluations but later stated objectives were essential, showing the misunderstanding continues. Note 3: This new provision reads: “In the event the Employee elects to become Retired from the City, the City shall pay to employee, in lump sum, an amount equal to the pro-tata [spelling mistake in contract] Total Compensation earned as of her final day of employment.” Existing retirement benefits include being vested in the City Manager Pension Fund, the only defined benefit fund the city manages. If correctly interpreted, that means she shall receive an annuity worth 60% of her annual income. A new provision seems to be for an additional 2 years of income but the terms remain unclear, while also investing in the regular defined contribution, City Employees Pension Fund. Note 4 In fact, the 2022 agreement reads, “This amended Agreement shall supersede and terminate the Employment Agreement dated December 8th, 2014”. This clause by itself is a