PREPARED BY: ALICIA PLATT DATE OF MEETING: 06/01/2026
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO (1) AUTHORIZING THE TEMPORARY APPOINTMENT OF JILL MERCURIO TO FILL THE VACANT POSITION OF PUBLIC WORKS DIRECTOR/CITY ENGINEER PURSUANT TO GOVERNMENT CODE SECTION 21221(H) AS OF MAY 1, 2026, AND DURING THE CITY’S RECRUITMENT FOR A FULL-TIME REPLACEMENT; (2) AUTHORIZING THE CITY MANAGER TO ENTER INTO A RETIRED ANNUITANT EMPLOYMENT AGREEMENT WITH JILL MERCURIO PURSUANT TO APPLICABLE CALPERS POST-RETIREMENT WORK RESTRICTIONS; AND (3) RATIFYING STAFF’S PRIOR INITIATION OF A FORMAL RECRUITMENT TO FILL THE POSITION OF PUBLIC WORKS DIRECTOR/CITY ENGINEER ON A PERMANENT BASIS AND DIRECTING STAFF TO CONTINUE SUCH RECRUITMENT EFFORTS
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
FY 2025-2027 Council Priority Workplan Compliance Statements:
This item is not specifically identified in the Council’s Priority Workplan but is necessary to ensure continuity of leadership, operational oversight, and uninterrupted administration of essential Public Works and Engineering functions while the City conducts recruitment for a permanent Public Works Director/City Engineer.
CEQA Compliance Statement
This proposed action is not a project as defined by CEQA
BACKGROUND
On October 20, 2025, the City Council approved the temporary appointment of Jill Mercurio pursuant to Resolution 2025-132, as Public Works Director/City Engineer pursuant to California Government Code Section 21221(g) during the approved leave of absence of the incumbent employee. Government Code Section 21221(g) authorizes temporary appointments of retired annuitants when a position is temporarily vacant due to a leave of absence granted to a current employee on payroll status.
Subsequent to that appointment, the incumbent employee unexpectedly retired from City service effective May 1, 2026, resulting in a vacancy in the position of Public Works Director/City Engineer and necessitating transition to an appointment pursuant to Government Code Section 21221(h).
The City did not receive immediate notice of the incumbent employee’s retirement, and upon learning of the retirement City staff promptly engaged a third-party firm and initiated recruitment to permanently fill the position of Public Works Director/City Engineer. Accordingly, and to allow for continued service during the recruitment and hiring process for the vacant Public Works Director/City Engineer position, the City desires to memorialize the conversion of Jill Mercurio’s appointment pursuant to California Government Code Section 21221(g) into an appointment pursuant to 21221(h), effective as of May 1, 2026.
The position is critical to the City’s operations and is responsible for oversight and administration of public infrastructure systems, capital improvement projects, engineering review and inspection, traffic and transportation systems, maintenance operations, environmental compliance, development review, grant-funded projects, and compliance with state and federal regulations.
Government Code Section 21221(h) authorizes the temporary appointment of a CalPERS retired annuitant to fill a vacant position during recruitment for a permanent appointment, provided that the governing body determines the appointment is necessary and that active recruitment to fill the position permanently will occur during the appointment period. In compliance with Government Code Section 21221(h), the City promptly initiated recruitment for the permanent Public Works Director/City Engineer position following the May 1st retirement of the incumbent employee.
The Public Works Director/City Engineer position requires extensive technical, operational, regulatory, and managerial expertise. Jill Mercurio previously served as the City of San Pablo’s Public Works Director/City Engineer from March 2018 through May 2022 and possesses the specialized knowledge, institutional familiarity, professional engineering expertise, and management experience necessary to continue serving in the interim role with minimal disruption to City operations.
Under the proposed Retired Annuitant Employment Agreement, Ms. Mercurio will serve in a temporary at-will capacity and perform duties including oversight of Public Works operations, administration of engineering and capital projects functions, supervision of departmental personnel, implementation of grant-funded programs, budget administration, and acting as the City Engineer pursuant to San Pablo Municipal Code requirements. The agreement requires Ms. Mercurio to maintain a valid Professional Engineer (P.E.) license registered with the State of California throughout the term of the appointment.
The proposed agreement acknowledges that Ms. Mercurio is a retired annuitant subject to the Public Employees’ Retirement Law (“PERL”) and the Public Employees’ Pension Reform Act (“PEPRA”), including all applicable CalPERS post-retirement employment restrictions under Government Code Sections 21221 and 7522.56.
The agreement further provides that the total duration of service under both the prior Government Code Section 21221(g) appointment and the proposed Government Code Section 21221(h) appointment shall be cumulative for purposes of compliance with all CalPERS post-retirement employment limitations, including the 960-hour limitation and applicable maximum appointment durations.
The agreement provides that either party may terminate the agreement at any time upon written notice to the other party. The term of the agreement shall continue only until the earliest occurrence of any of the following:
1. The cumulative total service under both the prior Government Code Section 21221(g) appointment and the new Government Code Section 21221(h) appointment reaches 960 hours worked during a fiscal year;
2. One year from October 21, 2025, the effective date of the original Government Code Section 21221(g) appointment;
3. The City permanently fills the position of Public Works Director/City Engineer; or
4. Either party terminates the agreement.
STAFF RECOMMENDATION
Staff therefore recommends that the City Council adopt the proposed resolution:
1. Authorizing the temporary appointment of Jill Mercurio to fill the vacant position of Public Works Director/City Engineer pursuant to Government Code Section 21221(h), effective as of May 1, 2026, and during the City’s recruitment for a full-time replacement;
2. Authorizing the City Manager to enter into a Retired Annuitant Employment Agreement with Jill Mercurio pursuant to applicable CalPERS Post-Retirement work restrictions; and
3. Ratify staff’s prior initiation of a formal recruitment to fill the position of Public Works Director/City Engineer on a permanent basis and direct staff to continue such recruitment efforts.
FISCAL IMPACT
Under the proposed Retired Annuitant Employment Agreement, Jill Mercurio will be compensated at an hourly rate of $134.40 per hour through June 30, 2026. Effective July 1, 2026, the hourly rate shall increase by two percent (2%) to $137.08, consistent with the compensation adjustment authorized for the Public Works Director/City Engineer pursuant to the City’s Schedule of Benefits for Executive Management Employees, previously adopted on July 5, 2022, pursuant to City Council Resolution 2022-110, and reflected in the City’s publicly available salary schedules, as amended from time to time.
In no event shall the provided compensation exceed the maximum permitted under Government Code Section 21221(h), consistent with applicable CalPERS post-retirement employment requirements. Compensation shall not exceed 960 hours per fiscal year cumulatively across both the prior Government Code Section 21221(g) appointment and the proposed Government Code Section 21221(h) appointment.
Ms. Mercurio shall not receive any additional benefits, leave accruals, retirement contributions, or other compensation beyond the approved hourly rate. Compensation will be processed through the City’s regular payroll process with all applicable federal and state payroll tax withholdings.
Funding for the interim retired annuitant appointment is dependent on departmental vacancy savings included within the existing FY 2025-26 budget and the proposed FY 2026/27 budget appropriations contingent on City Council approval in account 100-3310-42001. No additional appropriations are required at this time.
ATTACHMENTS:
Att A. Draft Resolution
Att B. Draft Retired Annuitant Employment Agreement - Jill Mercurio
Att C. CalPERS Government Code Section 21221(h) Information Sheet