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HomeMy WebLinkAbout09. Approve salary adjustment for General Manager and new six-year Employment Agreement Page 1 of 14 Item 9. CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER MEETING DATE: NOVEMBER 21, 2019 SUBJECT: APPROVE PROPOSED SIX-YEAR EMPLOYMENT AGREEMENT WITH GENERAL MANAGER ROGER S. BAILEY EFFECTIVE NOVEMBER 21, 2019, WHICH INCLUDES ADJUSTMENTS TO CERTAIN PROVISIONS OF HIS PREVIOUS EMPLOYMENT AGREEMENT, AND A SALARY ADJUSTMENT EFFECTIVE NOVEMBER 7, 2019 SUBMITTED BY: INITIATING DEPARTMENT: TEJI O'MALLEY, HUMAN RESOURCES OPERATIONS - POD - HUMAN RESOURCES MANAGER REVIEWED BY: ANN SASAKI, DEPUTY GENERAL MANAGER ISSUE Board approval is required to approve the General Manager's employment agreement. BACKGROUND This employment contract between the District and General Manager, Roger S. Bailey, is for six years and allows for the Board to consider adjustments to his salary or other benefits in such amounts and to such extent as the Board may determine is appropriate. During the course of each fiscal year, the Board coordinates with the General Manager and sets a list of goals for him to execute. As part of his annual performance review for Fiscal Year 2018-19, the Board assessed the goals and their associated initiatives to determine their status and success. I n this very thorough review process, the Board concluded that the General Manager far exceeded the expectations set for him and they were very pleased with his performance as well as the general direction in which the District is heading under Mr. Bailey's leadership. Concurrent with the performance review process, the Board conducted a nationwide total compensation survey for General Managers in selected water and wastewater agencies, and also reviewed the compensation models for non-appointed employees hired by the District. At the end of this process, taking into consideration Mr. Bailey's exceptional performance and accomplishments, the Board has determined that it is appropriate to adjust his salary, consistent with his performance, and guided by the aforementioned internal and external total compensation assessments. November 21, 2019 Regular Board Meeting Agenda Packet- Page 39 of 91 Page 2 of 14 It is proposed that, effective November 7, 2019, Mr. Bailey's annual salary be increased from $298,000 to $324,816, which reflects an increase of nine percent. Additionally, the terms of Mr. Bailey's current employment agreement have been updated to reflect the following changes that were needed to either update the contract and/or codify District changes that have been made to benefits in the past year: • The term of the employment agreement is changed to six years, effective retroactively to August 19, 2019 through August 18, 2025. • Clarification that the General Manager does not determine the salaries and benefits for the Secretary of the District and District Legal Counsel. • Clarification that the General Manager is not precluded from engaging in external activities as long as it does not interfere or is in conflict with his role as the General Manager. • Requirement that the General Manager reside within the District's service area has been removed. • Paid Time Off (PTO) provision has been updated to reflect his current accrual rate. • Provision has been updated to reflect that the General Manager is currently paying 100 percent of his employee pension contribution. • Updated to codify that his retiree medical benefits are the same as all District employees upon the transition to CalPERS. • Updated to codify that his medical and health coverage as an active employee is the same as all District employees upon the transition to CalPERS. • Provision on relocation expenses was deleted as it is no longer applicable. • Severance language was amended to reflect that if the General Manager is terminated without cause in the first three years of the employment agreement, he would be eligible for three (3) months of severance pay. If the General Manager is terminated without cause in the last three years of the employment agreement, he would be eligible for six(6) months of severance pay. All changes are incorporated in the attached proposed new six-year Employment Agreement (Attachment 1). ALTERNATIVES/CONSIDERATIONS Deny the salary adjustment and other employment agreement changes for Mr. Bailey or propose alternative changes. FINANCIAL IMPACTS Mr. Bailey's annual salary will increase from $298,000 to $324,816 resulting in an annual cost of$31,769, which includes salary as well as any incremental costs in benefits. COMMITTEE RECOMMENDATION This matter was not reviewed by a Board Committee. RECOMMENDED BOARD ACTION Approve proposed six-year Employment Agreement with General Manager Roger S. Bailey effective November 21, 2019, which includes adjustments to certain provisions of his previous Employment Agreement, and a salary adjustment effective November 7, 2019. November 21, 2019 Regular Board Meeting Agenda Packet- Page 40 of 91 Page 3 of 14 Strategic Plan re-In GOAL FOUR: Develop and retain a highly trained and innovative workforce Strategy 1 - Ensure adequate staffing and training to meet current and future operational levels ATTACHMENTS: 1. Proposed General Manager Employment Agreement November 21, 2019 Regular Board Meeting Agenda Packet- Page 41 of 91 Page 4 of 14 PROPOSED EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into effective November 21, 2019 ("Effective Date"), by and between the Central Contra Costa Sanitary District, a special district organized pursuant to the California Sanitary District Act of 1923 ("District") and Roger S. Bailey("General Manager"). District and General Manager are hereinafter collectively referred to as the "Parties." NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. General. The District hereby engages and employs, "General Manager,"to perform the functions and duties of the General Manager subject to the terms, conditions and provisions of this Agreement. The General Manager hereby accepts such employment and agrees to render services as provided herein, all of which services shall be performed conscientiously and to the full extent of the General Manager's ability. The Parties acknowledge and agree that the General Manager is an"at-will" employee serving at the pleasure of the District's Board of Directors (the "Board"). 2. Term. The term of this Agreement shall be six(6)years beginning on November 21, 2019 and ending on November 22, 2025,unless otherwise terminated as provided for in this Agreement. At the end of this term, the Agreement thereafter shall be, absent any amendments, automatically extended from year to year unless the District provides written notice at least ninety (90) days prior to the end of the term of the Agreement of its intent to terminate the 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 42 of 91 Page 5 of 14 Agreement. If the Agreement is extended year to year, the Agreement to provide ninety(90) days' written notice applies to that extended term. Notwithstanding the above-stated term, the General Manager acknowledges that he is an at will employee and that nothing in this Agreement shall prevent, limit, or otherwise interfere with the District's ability to terminate his employment at any time with or without cause, in accordance with the requirements of paragraph 12 of this Agreement. 3. Position and Duties; Authority. The General Manager shall have overall responsibility for the day-to-day management and administration of the District and shall be subject to direction by the Board. The General Manager shall perform his duties to the best of his ability in accordance with the highest professional and ethical standards. He shall comply with and carry out the District's rules and regulations and shall obey all laws as they apply to the performance of his duties. He shall have the authority to hire, fire, and determine the range of compensation of District employees, with the exception of the Secretary of the District and District Legal Counsel, subject to all applicable laws and regulations, the Memoranda of Understanding with the bargaining groups, consistent with the policies adopted from time to time by the Board regarding the District's workforce. 4. Exclusivity. The General Manager's services shall be exclusive to the District during the term of this Agreement. The General Manager warrants that there are no agreements or arrangements, whether written or oral, in effect, which would prevent him from rendering exclusive services to the District during the term hereof and that he has not made and will not make any commitment or do any act in conflict with this Agreement. This does not preclude the General Manager from serving in an appointment but only to the extent that such activities are not in conflict or interfere with his District duties. 2 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 43 of 91 Page 6 of 14 5. Salary. (a) Salary. The District shall pay the General Manager a salary of$ 324,816 per year, or a total of$ 27,068 per month effective November 7, 2019. The Board annually will consider adjustment of the General Manager's annual salary in such amounts and to such extent as the Board may determine is desirable on the basis of its annual review and evaluation of the General Manager. Any salary adjustments must be approved by the Board in open session. 6. Benefits. The District agrees to provide the following benefits: (a) Paid Time Off(PTO) of thirty (30) days per year, accrued month to month over that year, with those accruals beginning on the anniversary date of employment. The General Manager may accumulate PTO up to a maximum of sixty(60) days of PTO. If the accumulated PTO reaches the maximum accrual of sixty(60) days, then the General Manager shall not accrue any additional PTO unless and until the accumulation becomes less than sixty (60) days. The option of requesting a cash payment for accumulated PTO during employment is not permitted by this Agreement. However, any accumulation of PTO up to that maximum accumulation will be payable at the time of any separation of employment. (b) Thirteen(13)paid holidays. (c) Retirement plan of 2 percent at age fifty-five (55). The General Manager's responsibility is for paying 100% of the employee share based on his age of entry as calculated and determined by CCCERA. (d) Retiree medical and dental coverage at the District's Tier III level. The Rule of 70 must be met. Age and years of service with the District at the time of retirement must 3 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 44 of 91 Page 7 of 14 total 70, with a minimum requirement that the General Manager must be at least 55 years of age and have a least 10 years of continuous service. If the General Manager does not meet the aforementioned Tier III conditions, the District will only pay the minimum employer contribution that CalPERS requires towards medical coverage upon retirement from the District. If the General Manager does meet the aforementioned Tier III conditions, the District shall only pay 50 percent of the premium cost for the retiree's chosen CalPERS core plan and dental and vision plan for the retiree and spouse. Tier III retirees are not eligible for life insurance. (e) Medical plan coverage. The General Manager shall receive either the CalPERS Kaiser Permanente or the HealthNet SmartCare ("Core Plans")plan coverage at at 100 percent paid by the District (up to family coverage. The District will make a contribution for the remaining amount(that portion of the District's contribution that exceeds the CalPERS minimum required contribution) to the District's Section 125 Cafeteria Plan for the General Manager to allocate toward the cost of his health care benefits. If the General Manager selects any other plan that is offered by CalPERS that exceeds the cost of either the Kaiser Permanente or the HealthNet SmartCare plan, he shall pay the difference in premiums between the highest cost Core Plan and the plan he selects. The General Manager may waive District medical coverage and in lieu receive a District contribution of$400.00 to the Section 401A plan. (f) VSP Vision coverage paid 100 percent by the District (up to family coverage) (g) Delta Dental Plan coverage paid 100 percent by the District(up to family coverage). (h) A cafeteria plan of$425.00 per month. 4 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 45 of 91 Page 8 of 14 (i) Life Insurance of$250,000.00 and insurance for Accidental Death and Dismemberment. 0) Long Term Disability coverage which provides for sixty percent(60%) of earnings up to $11,000.00 per month after a sixty(60) day waiting period. (k) $100.00 per month for phone or communication devices. (1) A 401A contribution of 6.2 percent of salary in lieu of social security contributions. (m) An Employee Assistance Program. 7. Business and Travel Expenses. The District shall pay the General Manager's reasonable and necessary expenses for travel on District business, for professional memberships, and for conferences and seminars related to District business or professional training and development in accordance with District policy. All expenses shall be documented by the General Manager on District expense reimbursement forms. 8. Review and Evaluation. The Board will conduct a performance review or evaluation of General Manager's performance to General Manager annually. The Board may undertake performance review or evaluation of General Manager at any time in its sole discretion. 9. Return of Property. Upon termination of this Agreement, regardless of how termination may be effected, or whenever requested by the District, the General Manager shall immediately turn over to the District all District property, including all items used by the General 5 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 46 of 91 Page 9 of 14 Manager in rendering services hereunder or otherwise, that may be in the General Manager's possession or under his control. 10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. 11. Termination. The District may terminate this Agreement, with or without cause, at any time upon ninety(90) days' written notice to the General Manager. If the District elects to terminate this Agreement without cause, the District may also elect to terminate the Agreement without providing ninety(90) days' notice. If the District elects to terminate the General Manager without cause and without such notice in the first three years of this employment agreement, the General Manager shall be paid severance compensation in an amount equal to three (3)months of the base monthly salary. If the District elects to terminate the General Manager without cause and without such notice in the last three years of this employment agreement, the General Manager shall be paid severance compensation in an amount equal to six (6) months of the base monthly salary. At its discretion, the District may satisfy this obligation by providing a combination of notice and severance pay. Such severance is contingent upon the General Manager signing and delivering a general release of all claims against the District in a form acceptable to the District. The General Manager shall not receive any severance payments if such a waiver and release is not executed by the Parties. Notwithstanding the foregoing, in the event the General Manager is convicted of a crime involving an abuse of his office or position,the General Manager shall fully reimburse the District for any severance compensation he received from the District pursuant to this 6 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 47 of 91 Page 10 of 14 Agreement. For purposes of this paragraph, "abuse of his office or position"means either: (a) an abuse of public authority, including, but not limited to, waste, fraud and violation of the law under color of authority; or(b) a crime against public justice, including, but not limited to, a crime described in Title 7 of Part 1 of the Penal Code. The General Manager shall not be entitled to notice or to severance compensation pursuant to this Paragraph if he is terminated with cause for any of the following reasons: (a) Commission of any material act of fraud or dishonesty which is adverse to the District; (b) Acting in a manner that is directly or substantially in a conflicting position with the District after notice of the same and reasonable opportunity to cure and which has a material adverse effect on the District; (c) Gross negligence in the performance of the General Manager's duties and/or obligations to the District; (d) Sale,possession or use of illegal drugs; (e) A final judgment by a court of law of unlawful retaliation by the General Manager against any other employee for disclosure of information relative to actual or suspected violations of any State or Federal law; (f) Willful disregard of a lawful directive of the Board; (g) Insubordination; (h) Improper use of District funds or resources; 7 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 48 of 91 Page 11 of 14 (i) Willful misconduct; (j) Unauthorized absence from employment; or (k) Any other failure of good behavior either during or outside of employment such that the General Manager's conduct causes discredit to the District. For purposes of this Agreement, termination "with cause" shall apply only to eligibility for the severance pay described in this paragraph, and shall not give rise to any property interest and/or appeal rights of any kind. The General Manager shall be entitled to terminate this Agreement for any reason upon ninety (90 ) days' written notice. 12. Entire Agreement; Amendments. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior negotiations and agreements with respect thereto. This Agreement may be modified or amended only by an instrument in writing executed by both Parties. 13. Arbitration. (a) Any controversy or claim arising out of or relating to this Agreement or the breach thereof, or arising out of or relating to General Manager's employment or termination thereof, including but not limited to claims of employment discrimination based on federal and state law, which cannot be resolved among the Parties themselves, shall, on the written request of either party served on the other within the applicable statute of limitations,be submitted and resolved by final and binding arbitration. Service of the written request for arbitration shall be 8 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 49 of 91 Page 12 of 14 made only by certified mail,with a return receipt requested. Time is of the essence; if the request is not served within a one (1)year period after the cause of action arises or the termination of this Agreement, whichever is earlier, then the complaining party's claim(s) shall be forever waived and barred before any and all forums, including, without limitation, arbitration or judicial forums. (b) The Arbitrator shall have no authority to alter, amend, modify or change any of the terms of this Agreement,unless a provision expressly conflicts with applicable federal or state laws. Any arbitrator selected under this provision shall have the express authority to consider statutory violations of federal and state law in addition to disputes involving this Agreement, and to award such remedies as may be permitted under such statutes. The decision of the Arbitrator shall be final and binding and judgment therein may be entered in any court having jurisdiction over the dispute. (c) The Arbitration shall be conducted under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association ("AAA") current at the time of the dispute. In the event that such rules are determined to be in conflict with federal or state law, then the arbitrator shall have the authority to amend them accordingly. The District shall be responsible for paying all the AAA's administrative and arbitrator's fees. In all other respects, the Parties shall bear their own attorneys' fees and costs except as otherwise required by law. The Parties shall have the right to conduct discovery which provides them with access to documents and witnesses that are essential to the dispute, as determined by the Arbitrator. The Arbitrator's written award shall include the essential findings and conclusions upon which the award is based. 9 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 50 of 91 Page 13 of 14 (d) The Parties intend that this arbitration procedure is mandatory and shall be the exclusive means of resolving all disputes whether founded in fact or law between the General Manager and the District and/or its employees, elected officials, directors, agents, officers or managers arising out of or relating to this Agreement, the Parties' employment relationship and/or the termination of that relationship, including,but not limited to, any controversies or claims pertaining to wrongful or constructive discharge, violations of the covenant of good faith and fair dealing, implied contracts, public policies, anti-discrimination statutes or any employment-related statutes. (e) Nothing in this Agreement shall be deemed to waive any requirement to file a claim against the District under the terms of the Government Claims Act or other provisions of law. (f) Each party shall bear its own cost and attorneys' fees in any such action. THE PARTIES ACKNOWLEDGE THAT BY ADOPTING ARBITRATION THEY HAVE IN EFFECT WAIVED ANY CONSTITUTIONAL OR STATUTORY RIGHT TO HAVE ANY SUCH DISPUTE DECIDED IN A COURT OF LAW AND/OR BY A JURY IN A COURT PROCEEDING. Initials: District General Manager 14. Severability. If any provision or any part of any provision of this Agreement is for any reason held to be invalid, void,unenforceable or contrary to any public policy, law, statute and/or ordinance, then the remainder of this Agreement shall not be affected thereby and shall remain in full force and effect and fully enforceable. 10 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 51 of 91 Page 14 of 14 15. Interpretation; Captions; Leal Review. The section headings used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. Further each party agrees that it has had an ample opportunity to have this document reviewed by its legal counsel prior to execution. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. CENTRAL CONTRA COSTA SANITARY DISTRICT a special district Dated: By: ROGER S. BAILEY General Manager Dated: By: DAVID R. WILLIAMS President, Board of Directors 11 5193727.2 November 21, 2019 Regular Board Meeting Agenda Packet- Page 52 of 91