Newport Beach city manager contract extended by five years

Newport Beach City Hall.
(Kevin Chang / Staff Photographer)

The Newport Beach City Council voted to extend the contract for current City Manager Grace Leung for another five years — a departure from what is traditionally an annual process.

Leung was hired in 2018 to succeed former City Manager Dave Kiff. At the time of her hiring, she made $265,000 a year in base salary. Her initial term was two years, with an automatic one-year extension unless the city chose to do otherwise.

In 2021 she saw a raise of her base salary to $281,220.

The contract, approved Tuesday with Mayor Kevin Muldoon dissenting, extends Leung’s employment contract through 2026 and boosts her base salary to $301,187.

In its terms, the contract includes a 5% merit adjustment in the first year and cost-of-living adjustments tied to those received by executive management employees beginning 2023 and each January thereafter. It also calls for a 2.5% performance pay raise contingent on satisfactory performance reviews.

The contract also eliminates city compensation to Leung’s 457 deferred compensation account and establishes a 401(a) account that the city will be contributing $29,500 in 2022 with $5,000 increases at the start of every subsequent year the contract is in effect.

Additionally, if the contract is terminated without cause, then Newport Beach will be required to provide a cash settlement equal to Leung’s monthly salary for up to a maximum of 18 months.

City watchdog Jim Mosher said he felt that the staff report provided for the item was not communicative of what had significantly changed from Leung’s previous contract, approved in January 2021.

“I, as a member of the public, have no idea why you are changing from the automatic annual renewal to a fixed, five-year term and especially I do not understand why you are offering 18 months — a year and a half of salary — in order to let somebody go when in all other cases,” said Mosher, “including with former City Manager Dave Kiff, the term was never more than six months of severance pay.”

Mayor Pro Tem Noah Blom said he appreciated Mosher’s comments, but that he felt that the city has some of the best management of any Orange County city and the city is fiscally conservative. Blom said the city wanted to retain top talent.

“We’re privileged to be where we are. It’s never easy to negotiate money, especially when we’re doing it with the city, but this is one of those things where we are very, very lucky — as everyone is looking for another job — that these people want to stay with us,” said Blom. “This is one of those moments where I think we should…commend the staff we have. This is not an easy job. It’s very, very hard and I’m personally very excited that Grace is willing to work with a deal like this.”

Muldoon said he viewed city staff and Leung’s service highly, but clarified he would be voting against the contract due to “small deal points” that he disagreed with.

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