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Home My WebLink About16. Approve salary increase of 3.75% for Roger S. Bailey, extend term of current contract by five additional years and allow mandatory contribution into District 401(A) plan effective Julyl 26, 2024Page 1 of 4 Item 16. DCENTRALSAN MEETING DATE: JULY25, 2024 BOARD OF DIRECTORS POSITION PAPER SUBJECT: APPROVE A SALARY INCREASE FOR GENERAL MANAGER, ROGER S. BAILEY, OF THREE AND THREE QUARTERS PERCENT (3.75%); EXTEND THE TERM OF HIS CURRENT CONTRACT BY FIVE ADDITIONAL YEARS ENDI NG ON NOVEMBER 22, 2033; AND ALLOW FOR A MANDATORY CONTRIBUTION OF TWELVE AND ONE HALF PERCENT (12.5%) OF HIS SALARY INTO THE DISTRICT'S 401(A) PLAN, EFFECTIVE JULY26, 2024 SUBMITTED BY: TEJ I O'MALLEY, HUMAN RESOURCES AND ORGANIZATIONAL DEVELOPMENT MANAGER Roger S. Bailey General Manager INITIATING DEPARTMENT: OFFICE OF THE GENERAL MANAGER - HUMAN RESOURCES ISSUE Board approval is required to amend the General Manager's employment agreement. BACKGROUND The current employment contract between the District and General Manager, Roger S. Bailey, is for nine 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, the Board assesses these goals and their associated initiatives to determine their status and success. The Board has concluded that the General Manager exceeded the expectations set for him for FY 2023-24. At the end of this thorough process, it is proposed that the following amendments to his employment contract be made effective July 26, 2024: • Mr. Bailey's annual salary be increased from $387,879 to $402,424 which reflects an increase of July 25, 2024 Special Board Meeting Agenda Packet - Page 162 of 188 Page 2 of 4 three and three quarters percent (3.75%). • Extend the term of his current contract by five additional years ending on November 22, 2033. • Allow for a mandatory contribution of twelve and one half percent (12.5%) of his salary into the District's 401(a) Plan. All changes are incorporated in the attached proposed Sixth Amendment to the Employment Agreement. ALTERNATIVES/CONSIDERATIONS Deny the proposed changes or propose alternative changes. FINANCIAL IMPACTS Mr. Bailey's annual salary will increase from $387,879 to $402,424, resulting in an annual cost of $14,756, 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 a salary increase for General Manager, Roger S. Bailey, of three and three quarters percent (3.75%); extend the term of his current contract by five additional years ending on November 22, 2033; and allow for a mandatory contribution of twelve and one half percent (12.5%) of his salary into the District's 401(a) Plan, effective July 26, 2024. Strategic Plan Tie -In GOAL THREE: Workforce Diversity and Development Strategy 3 - Retain skilled workers by investing in resources and opportunities for all employees to grow and thrive ATTACHMENTS: 1. Proposed Amendment to Employment Agreement July 25, 2024 Special Board Meeting Agenda Packet - Page 163 of 188 Page 3 of 4 Attachment 1 SIXTH AMENDMENT TO EMPLOYMENT AGREEMENT This Sixth Amendment to the current Employment Agreement dated November 21, 2019, between the Central Contra Costa Sanitary District ("District"), a special district organized pursuant to the California Sanitary District Act of 1923, and Roger S. Bailey ("General Manager") is entered pursuant to paragraph 12 of that Agreement. The General Manager and the District are hereinafter collectively referred to as "the Parties." This Amendment to the Employment Agreement between the Parties contains an amendment to the following provisions of that Agreement: Paragraph 2, Term. Effective July 26, 2024, the District shall extend the term of the General Manager's contract by a total of 5 additional years, ending on November 22, 2033. The remaining provisions of Paragraph 2 of the Employment Agreement shall remain unchanged. Paragraph 5, Salary. Effective July 26, 2024, the District shall increase the General Manager's salary by a total of three and three quarters percent (3.75%). This would increase his annual salary from $387,879 to $402,425. The remaining provisions of paragraph 5 of the Employment Agreement remain unchanged. Paragraph 6, Benefits. Effective July 26, 2024, the General Manager will automatically contribute to the District's 401(a) Plan by mandatory pretax salary reduction, twelve and one half percent (12.5%) of his base salary. Each contribution will be deducted ratably from the employee's compensation each payroll period during the Plan Year (or the remainder of the Plan Year in which the amendment to this Employment Agreement establishing this contribution is adopted). The District designates all mandatory employee salary reduction contributions to the 401(a) Plan made by the General Manager as pick-up contributions and will pick up those contributions in accordance with section 414(h)(2) of the Internal Revenue Code (Code) and all guidance issued thereunder as follows: 1. This provision of the Employment Agreement applies to all contributions that are required to be made by the General Manager as a member of the 401(a) Plan, on a regular payroll deduction basis and that are reported to the 401(a) Plan and credited to the General Manager's account. 2. Although designated as employee contributions, and deducted from the General 21001354.2 July 25, 2024 Special Board Meeting Agenda Packet - Page 164 of 188 Page 4 of 4 Manager's compensation, the contributions shall, for tax purposes, be characterized as "picked up" by the District in accordance with Code section 414(h)(2) and shall be treated as paid by the District in lieu of contributions by the General Manager. 3. The General Manager shall not have the option of choosing, directly or indirectly, to receive the contributions instead of having them made to the 401(a) Plan. 4. The District shall pay the contributions designated as employee contributions from the same source of funds as used in paying salary. 5. Employee contributions that are picked up in accordance with this resolution shall result in the tax deferral of these contributions to the extent provided under the Code, Treasury regulations and other guidance issued thereunder. 6. This provision establishes and adopts the District's pick-up practices in accordance with Revenue Ruling 2006-43 for contributions made by the General Manager and restates and reaffirms its prior decisions with respect to picking up all employee contributions to the 401(a) Plan. 7. The District shall comply with all reporting, contribution, and other administrative requirements established by the 401(a) Plan with respect to the General Manager whose contributions are picked up in accordance with this provision. The remaining provisions of Paragraph 6 would remain unchanged. Except as expressly stated in this Sixth Amendment, all other provisions of the current Employment Agreement remain in full force and effect. This Sixth Amendment represents all of the agreements between the Parties related to this Sixth Amendment, and this may only be modified or amended by an instrument in writing executed by both parties. IN WITNESS THEREOF, the Parties have executed this Sixth Amendment to the Employment Agreement to be effective July 26, 2024: Dated: By: Dated: By: CENTRAL CONTRA COSTA SANITARY DISTRICT, a special district ROGER S. BAILEY General Manager Mariah Lauritzen President, Board of Directors 21001354.2 July 25, 2024 Special Board Meeting Agenda Packet - Page 165 of 188