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HomeMy WebLinkAbout12 GM Employment Agreement Agenda Item # 12 O . Public Utility District ACTION To: Board of Directors From: Michael D. Holley Date: March 17, 2010 Subject: Consideration of an Ordinance Extending the General Manager's Employment Agreement 1. WHY THIS MATTER IS BEFORE THE BOARD Only the Board can modify the General Manager's employment agreement. 2. HISTORY The District and the General Manager entered into a three-year employment agreement on December 31, 2007 which will expire on December 31, 2010. The employment agreement states that the Board shall annually review and amend the agreement to reflect compensation adjustments or any other changes. The General Manager's compensation was last adjusted by ordinance on March 4, 2009. 3. NEW INFORMATION The Board has met three times, on February 3rd, February 17th, and March 3rd to review the General Manager's 2009 performance year accomplishments and provide direction as to his 2010 performance year goals. A tentative agreement has been reached regarding a new contract. A copy of the proposed new employment agreement is included as Attachment 1. Changes to the General Manager's compensation must be done through an ordinance. A draft ordinance is included as Attachment 2. The Water Utility Manager, Ed Taylor, retired in December 2009. His position has not been rehired. The General Manager has taken on the Water Utility Manager's responsibilities by directly managing the Water Department. The proposed changes to the General Manager's employment contract include: • Term: Extend the term for an additional five years from July 1, 2010 through June 30, 2015 • Base Salary: No changes in base salary until December 1, 2010. At that time, increase to Step 5 of the salary scale • Cost of Living Adjustment: Each January, the District shall increase OR DECREASE the base salary based on the Consumer Price Index for the previous October of each year • Deferred Compensation Contribution: For consideration of performance of additional duties as the Water Utility Manager, each July the District shall make an annual contribution equal to five-percent of base salary to the General Manager's Supplemental Income Plan • Severance Pay: Extend severance provision from 3 months to 12 months • Safety/Protective Equipment: The District shall provide up to $500 annual reimbursement for personal safety equipment/tools 4. FISCAL IMPACT The cost of the 5% contribution to the General Manager's Supplemental Income Plan in July is $9,405.00. The cost of the General Manager's step increase in December is $11,286. There are sufficient funds in the FY10 and FY11 budgets to cover these costs. 5. RECOMMENDATION Approve an ordinance extending the General Manager's Employment Agreement. Michael D. Holley General Manager Attachment I TR-U- CKEE DONNER PUBLIC UTILITY DISTRICT EMPLOYMENT AGREEMENT GENERAL MANAGER EMPLOYMENT AGREEMENT TABLE OF CONTENTS Introduction P.1 Section 1: Term,At-Will Employment,Residence and Extension or Renewal P.1 Section 2: Duties and Authority P.1 Section 3: Base Salary P.2 Section 4: Insurance Benefits P. 2 Section 5: Vacation,Administrative Days, and Sick Leave and Holidays P. 2-3 Section 6: Automobile P. 3 Section 7: Retirement P. 3 Section 8: General Business Expenses P. 3-4 Section 9: Termination P. 4 Section 10: Severance Pay P. 5 Section 11: Resignation P. 5 Section 12: Performance Evaluation P. 5 Section 13: Hours of Work P. 6 Section 14: Outside Activities P. 6 Section 15: Indemnification P. 6 Section 16: Bonding P. 7 Section 17: Other Terms and Conditions of Employment P. 7 Section 18: Notices P. 7 Section 19: General Provisions P. 8-9 {00158388.DOC 3) Employment Agreement Introduction This Agreement made and entered into this Day of March, 2010, by and between the Truckee Donner Public Utility District, (hereinafter called Employer" or "District") and Michael D. Holley, (hereinafter called "Employee" or "Holley") an individual who has the education, training, and experience in utility management, and both of whom agree as follows: Section 1: Term,At-Will Employment, Residence and Extension or Renewal A. The term of this Agreement shall be for a period of five (5) years beginning on July 1, 2010 and ending on June 30, 2015. All compensation, benefits and requirements of this Agreement shall remain in effect until the expiration of the term of this Agreement or sooner in the event that Employee voluntarily resigns or is terminated. In the event that the Employee is terminated, as defined in Section 9 of this Agreement, the Employee shall be entitled to all compensation including salary and accrued vacation paid in lump sum plus severance pay in accordance Section 10 of this Agreement. B. The Employer and Employee agree that Employee's employment with Employer pursuant to this Agreement is "at-will", meaning that either the Employer or Employee may terminate this Agreement at any time, for any reason or no reason, in accordance with the terms of this Agreement. C. During the term of this Agreement, Employee agrees that at all times he shall reside within the physical boundary of the Employer's electric and or water Sphere of Influence. D. At the end of the term of this Agreement, the Parties may mutually agree to extend or renew this Agreement. During July 2014, the Parties shall commence negotiations to determine whether they would like to extend or renew this Agreement and the terms and conditions of such renewed or extended agreement. Section 2: Duties and Authority A. Employer agrees to employ Employee as Employer's General Manager to perform the functions and duties of General Manager as directed by the Employer's Board of Directors, as may be delegated to the General Manager by the Board of Directors and as are set forth in the Employer's policies, which may be amended by the Employer's Board of Directors from time-to-time and to perform other legally permissible and proper duties and functions. {00158388.DOC 3} 1 B. In addition to the duties set forth immediately above in Section 2.A. Employee shall perform some of the duties of Employers' Water Utility Manager. Section 3: Base Salary A. Employer agrees to pay Employee an annual Base Salary of One Hundred Eighty Eight Thousand One Hundred Dollars ($188,100.00), B. Beginning on December 1, 2010, Employer agrees to pay Employee an annual Base Salary of One Hundred Ninety Nine Thousand Three Hundred Eighty Six Dollars ($199,386.00) C. Beginning on January 1, 2011 and on each January 1 thereafter, during the term of this Agreement, Employer shall increase or decrease the Base Salary by the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U, U.S. City Average, all items, 1982-84=100, not seasonally adjusted), over the previous consecutive 12 month period ending October 31. D. Base Salary shall be payable in installments at the same time that other employees of the Employer are paid. Section 4: Insurance Benefits A. The Employer agrees to provide the Employee with the same medical, dental, vision and life insurance as are provided to other employees of Employer in accordance with Employer's policies. Section 5: Vacation, Administrative Days, Sick Leave and Holidays A. During each of the five (5) years of this Agreement, Employee shall accrue fifteen (15) days of vacation leave. B. The Employee shall annually accrue eight (8) days of Administrative Leave in accordance with Employer's policy. C. Employee shall annually accrue twelve (12) days of sick leave at the rate of one (1) day per month in accordance with Employer's policy. Accrued unused sick leave days can be converted upon retirement for additional service time for Ca1PERS retirement benefits in accordance with the Employer's agreement with Ca1PERS and CalPERS' policy. D. The Employee shall annually receive eleven (11) days of paid holidays in accordance with Employer's policy. 100158388.DOC 3) 2 E. The Employee is entitled to accrue all unused vacation, without limit, and in the event the Employee's employment is terminated, either voluntarily or involuntarily, the Employee shall be compensated for all accrued unused vacation time. Section 6: Automobile A. In accordance with the Employer's Vehicle Use Policy, the Employer shall provide Employee with a vehicle for work related use and commuting to and from work. Employer shall be responsible for paying for liability, property damage, and comprehensive insurance, and for the operation, maintenance, repair of the vehicle. Employee shall be responsible for paying appropriate taxes on the cost of commuting. Section 7: Retirement A. The Employer agrees to enroll the Employee into the Ca1PERS retirement system in accordance with the Employer's agreement with Ca1PERS and to make contributions on the Employee's behalf in accordance with the Employer's policy. B. In addition to the Employer's payment to the Ca1PERS retirement plan referenced above, Employer agrees to enroll the Employee into the Employer's Section 457 or 401 deferred compensation plan and to make matching contribution on the Employee's behalf up to three percent(3%) in accordance with the Employer's policy. C. The Employer agrees to make a one-percent (1%) of base annual contribution to the Employee's 457B Plan on January 1, of each year. D. For and in consideration of Employee's performance of duties as the Employer's Water Utility Manager, in addition to the performance of the other duties described in Section 2, above, Employer shall annually make a lump sum contribution to Employee's Supplemental Income Plan equal to five percent (5%) of Employee's Base Salary. Each annual lump sum contribution shall be made during July, with the first contribution being made in July 2010. Each annual lump sum contribution shall be calculated as five percent (5%) of Employee's Base Salary at the time the contribution is made. Section 8: General Business Expenses A. Employer agrees to reasonably budget for and to pay for professional dues and subscriptions of the Employee necessary for continuation and full participation in national, regional, state, and local associations, and organizations necessary and desirable for the Employee's continued professional participation, growth, and advancement, and for the good of the Employer. (00158388.DOC 31 3 B. Employer agrees to reasonably budget for and to pay for travel and subsistence expenses of Employee for professional and official travel, meetings, and occasions to adequately continue the professional development of Employee and to pursue necessary official functions for Employer, and such other national, regional, state, and local governmental groups and committees in which Employee serves as a member. C. Employer agrees to reasonably budget for and to pay for travel and subsistence expenses of Employee for short courses, institutes, and seminars that are necessary for the Employee's professional development and for the good of the Employer. D. Employer recognizes that certain expenses of a non-personal but job related nature are incurred by Employee, and agrees to reimburse or to pay said general expenses. E. The Employer acknowledges the value of having Employee participate and be directly involved in local civic clubs or organizations. Accordingly, Employer shall pay for the reasonable membership fees and/or dues to enable the Employee to become an active member in local civic clubs or organizations. F. The Employer shall provide Employee with a computer, software, fax/modem, cell phone and pager required for the Employee to perform the job and to maintain communication. G. The Employer shall provide Employee with an annual allowance of Five Hundred Dollars ($500.00) for the purchase of Employee's personal protective equipment or tools. Section 9: Termination For the purpose of this Agreement, termination shall occur when: A. A quorum of the Employer's Board of Directors votes to terminate the employment of Employee at a duly noticed meeting. B. If the Employer reduces the base salary, compensation or any other financial benefit of the Employee in a manner that differs materially from similar reductions that affect other employees of the Employer, such action shall be regarded as a termination. C. If the Employee resigns following an offer to accept resignation, whether formal or informal, by a representative of a majority of the Employer's Board of Directors authorized to act on behalf of the Board of Directors, then the Employee may declare a termination as of the date of the offer to accept resignation. D. Breach of this Agreement declared by either party with a thirty (30) day cure period for either Employee or Employer. Written notice of a breach of contract shall be provided in accordance with the provisions of Section 18. {00158388.DOC 31 4 Section 10: Severance Pay A. Severance shall be paid to the Employee when employment is terminated as defined in Section 9. B. If the Employee is terminated, the Employer shall provide Employee a severance payment equal to twelve (12) month's Employee's base salary at the current rate of pay at the time of termination and pay the premiums for medical, dental, vision and life insurance as provided in Section 4 for a period of twelve (12) months following the termination. This severance payment shall be paid in a lump sum unless otherwise agreed to by the Employer and the Employee. C. The Employee shall also be compensated for all accrued vacation time, all paid holidays, and prorated administrative days during the twelve(12) month period following termination. D. If the Employee is terminated because of a violation of any of the Employer's policies, for a reason that constitutes grounds for discipline pursuant to the Employer's policies or conviction of a felony, then the Employer is not obligated to pay the Employee the severance payment or the insurance premiums as set forth in Sections 10.B and IOC. Section 11: Resignation A. In the event that the Employee voluntarily resigns his position with the Employer, the Employee shall provide a minimum of thirty (30) days notice unless the parties agree otherwise. Section 10, Severance Pay, does not apply when Employee voluntarily resigns, or retires. Section 12: Performance Evaluation A. Employer's Board of Directors shall annually establish performance goals and objectives for the coming year and review the past performance of the Employee no later than January 31 of each year; subject to a process, form, criteria, and format for the evaluation which shall be mutually agreed upon by the Employer's Board of Directors and Employee. B. The process at a minimum shall include the opportunity for both parties to: (1) Establish goals and objectives for the coming year, (2) prepare a written evaluation, (3) meet and discuss the evaluation, and (4) present a written summary of the evaluation results. The final written evaluation should be completed and delivered to the Employee within thirty(30) days of the evaluation meeting. (00158388.DOC 31 5 Section 13: Hours of Work A. Employee shall devote his full-time efforts and such time as is required to perform his duties as Employer's General Manager. Employee shall generally maintain office hours Monday through Friday from 8 am. to 5 p.m. Section 14: Outside Activities A. The employment provided for by this Agreement shall be the Employee's sole employment. Recognizing that certain outside consulting or teaching opportunities provide indirect benefits to the Employer and the community, the Employee may elect, with Board approval, to accept limited teaching, consulting, and, other business opportunities with the understanding that such arrangements shall not constitute interference with, nor, a conflict of interest with his responsibilities under this Agreement. Section 15: Indemnification A. Beyond that required under Federal, State or Local Law, Employer shall defend, save harmless and indemnify Employee against any tort, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of Employee's duties as General Manager or resulting from the exercise of judgment or discretion in connection with the performance of program duties or responsibilities, unless the act or omission involved willful or wanton conduct. The Employee may request and the Employer shall not unreasonably refuse to provide independent legal representation at Employer's expense and Employer may not unreasonably withhold approval. Legal representation, provided by Employer for Employee, shall extend until a final determination of the legal action including any appeals brought by either party. The Employer shall indemnify employee against any and all losses, damages, judgments, interest, settlements, fines, court costs and other reasonable costs and expenses of legal proceedings including attorneys fees, and any other liabilities incurred by, imposed upon, or suffered by such Employee in connection with or resulting from any claim, action, suit, or proceeding, actual or threatened, arising out of or in connection with the performance of his duties. Any settlement of any claim must be made with prior approval of the Employer in order for indemnification, as provided in this Section, to be available. B. Employee recognizes that Employer shall have the right to compromise and unless the Employee is a party to the suit which Employee shall have a veto authority over the settlement, settle any claim or suit; unless, said compromise or settlement is of a personal nature to Employee. Further, Employer agrees to pay all reasonable litigation expenses of Employee throughout the pendency of any litigation to which the Employee is a party, witness or advisor to the Employer. Such expense payments shall continue beyond Employee's service to the Employer as long as litigation is pending. (00158388.DOC 31 6 Section 16: Bonding A. Employer shall bear the full cost of any fidelity or other bonds required of the Employee under any law or by-law. Section 17: Other Terms and Conditions of Employment A. The Employer, only upon agreement with Employee, shall fix any such other terms and conditions of employment, as it may determine from time to time, relating to the performance of the Employee, provided such terms and conditions are not inconsistent with or in conflict with the provisions of this Agreement, the Employer's policies, or any other law. B. Except as otherwise provided in this Agreement, as agreed to by Employer and Employee or required by applicable law, the Employee shall be entitled to the same benefits that are enjoyed by other management employees of Employer in accordance with Employer's policies. Section 18: Notices A. Notice pursuant to this Agreement shall be given by depositing in the custody of the United States Postal Service,postage prepaid, addressed as follows: EMPLOYER: President of the Board of Directors Truckee Donner Public Utility District P.O. Box 309 11570 Donner Pass Road Truckee, CA 96160 EMPLOYEE: Michael D. Holley 10526 Buckhorn Ridge Ct. Truckee, CA 96161 B. Alternatively, notice required pursuant to this Agreement may be personally served in the same manner as is applicable to civil judicial practice. Notice shall be deemed given as of the date of personal service or as the date of deposit of such written notice in the course of transmission in the United States Postal Service. {00158388.DOC 31 Section 19: General Provisions A. Integration. This Agreement sets forth and establishes the entire understanding between the Employer and the Employee relating to the employment of the Employee by the Employer. Any prior discussions or representations by or between the parties are merged into and rendered null and void by this Agreement. This Agreement may only be amended by mutual written agreement of both parties. Such amendments shall be incorporated and made a part of this Agreement. B. Binding Effect. This Agreement shall be binding on the Employer and the Employee as well as their heirs, assigns, executors, personal representatives and successors in interest. C. Effective Date. This Agreement shall become effective on July 1, 2010. Any other employment agreement between Employer and Employee in effect prior to and as of July 1, 2010 shall terminate and be of no further force or effect as of July 1, 2010 when this Agreement becomes effective. D. Severability. The invalidity or partial invalidity of any portion of this Agreement will not affect the validity of any other provision. In the event that any provision of this Agreement is held to be invalid, the remaining provisions shall be deemed to be in full force and effect as if they have been executed by both parties subsequent to the expungement or judicial modification of the invalid provision. E. Venue. Any action to interpret or enforce this Agreement shall be commenced and maintained in the County of Nevada in California. F. Choice of law. This Agreement shall be governed by the laws of California. G. Attorney fees. The prevailing party in any action to interpret or enforce this Agreement shall be entitled to reasonable attorney fees, cost and expense in addition to any other relief to which the party may be entitled. 100158388.DOC 31 g H. Alternate Dispute Resolution. Both parties agree to mediate any dispute or claim arising between them out of this Agreement which can not be adjusted by and between them before resorting to court action. Mediation fees, if any, should be divided between the parties. If either party commences a court action against the other, based on a dispute or claim to which this paragraph applies without first attempting to resolve the matter through mediation, the party commencing the curt action shall not be entitled to recover attorney fees, even if they would otherwise be available in any such court action. 1. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original,but all of which together shall constitute one and the same instrument and each party may deliver its executed counterpart to the other party via facsimile or email. J. Waiver. No waiver of any breach of any covenant or provision in this Agreement shall be deemed a waiver of any other covenant or provision in this Agreement and no waiver shall be valid unless in writing and executed by the waiving party. K. Re-Opener The Parties agree to negotiate in good faith for an amendment to or modification of this Agreement in the event that: (1) Employee's duties with respect to performance of the duties of Employer's Water Utility Manager as described in Section 2.B., above, are substantially modified or eliminated; or (2) the Employer significantly changes the medical, dental, vision and life insurance benefits provided to its employees, including Employee. Signed this date: 12010 Employer: Employee: Jeff Bender Michael D. Holley President of the Board Truckee Donner Public Utility District (00158388.DOC 3) 9 J Attachment 2 MT -" TRUCKEE 07 Public Utility District Ordinance No. 2010 - XX EFFECTING THE EMPLOYMENT AGREEMENT FOR THE GENERAL MANAGER WHEREAS, the Board of Directors employs a General Manager to manage the day by day affairs of the District; WHEREAS, the Board of Directors executed an Employment Agreement with the General Manager that expires on December 31, 2010; WHEREAS, the Board of Directors is satisfied with the General Manager's accomplishments and successful performance during the term of the existing agreement; WHEREAS, the Board of Directors recognizes that the General Manager has taken on the responsibilities of the Water Utility Manager; WHEREAS, the Board wishes to extend the term of the General Manager Employment Agreement for a period of five years, from July 1, 2010 through June 30, 2015; THEREFORE, BE IT ENACTED by the Board of Directors of the District that effective thirty days from the date of passage of this ordinance the following actions occur: 1. The General Manager's Employment Agreement term shall be July 1, 2010 through June 30, 2015 2. That the District Clerk is directed to publish this ordinance in accordance with the laws of the State of California. PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District at a regular meeting thereof duly called and held within said District on the seventeenth day of March 2010 by the following roll call vote: AYES: NOES: ABSTAIN: TRUCKEE DONNER PUBLIC UTILITY DISTRICT By Jeff Bender, President of the Board ATTEST: Michael D. Holley, Clerk of the Board