Meeting Date: Agenda Item: Manager: Extension: Director:
FC 1025 (04/22/09)
5/26/09
9 D. Cauble 2755 All
BOARD AGENDA MEMO SUBJECT:
Chief Executive Officer Appointment and Employment Agreement
RECOMMENDATION: Adopt the resolution appointing Chief Executive Officer and approving Employment Agreement with Beau Goldie RATIONALE: The Chief Executive Officer (CEO) is a Board-Appointed Officer who serves at the pleasure of the Board (BL-1). Only the Board may establish the terms and conditions of the CEO’s employment. EL-3.10 COMPLIANCE: Not applicable. SUMMARY: Following an extensive competitive recruitment process, the Board of Directors announced on May 4 the selection of Beau Goldie as the District’s next CEO. An Employment Agreement between the District and Mr. Goldie has been prepared, outlining the terms and conditions of his employment as CEO. This item presents for Board consideration a resolution formally appointing Mr. Goldie as the CEO, effective June 1, 2009, and approving an agreement establishing the terms and conditions of Mr. Goldie’s service as CEO.
NEXT STEPS (Optional): If the Resolution is adopted, Mr. Goldie and the Board Chair will execute the Agreement. Mr. Goldie will begin service as the District’s CEO on June 1, subject to the terms and conditions of the Employment Agreement.
EARLY RELEASE POLICY, SECTION EL-9.11: This agenda item will be released for public review 10 days prior to the Board meeting.
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SUBJECT:
Chief Executive Officer Appointment and Employment Agreement
CEQA REQUIREMENTS: The recommended action is not a project subject to the California Environmental Quality Act. ADVISORY COMMITTEE INPUT: None. PUBLIC OUTREACH: The Board Members selected a stakeholder panel, including 4 internal members and 7 external members representing a variety of interests, to participate in the CEO selection process. The panel interviewed the finalists for the CEO position and provided the Board with input about the candidates. FINANCIAL IMPACT: As the CEO position is not a new position, the District’s Budget already incorporates funds required for the salary and benefits for the position. ATTACHMENTS: 1 - Resolution Appointing Chief Executive Officer and Approving Employment Agreement with Beau Goldie 2 – Employment Agreement
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RESOLUTION NO. 09RESOLUTION APPOINTING CHIEF EXECUTIVE OFFICER AND APPROVING EMPLOYMENT AGREEMENT WITH BEAU GOLDIE
WHEREAS, following an open and competitive recruitment process, the Board of Directors voted on May 4, 2009, to appoint Beau Goldie as the District’s new Chief Executive Officer, subject to negotiation of the terms and conditions of his employment; and WHEREAS, an employment agreement describing said terms and conditions has been prepared and presented to this Board for consideration; NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the Santa Clara Valley Water District as follows: 1. Beau Goldie is appointed Chief Executive Officer for the Santa Clara Valley Water District, an at-will position, effective June 1, 2009. 2. Mr. Goldie’s employment as Chief Executive Officer is subject to the provisions of the attached Employment Agreement (Exhibit A), which is hereby approved. The Chair of the Board is authorized to execute the Agreement. PASSED AND ADOPTED by the Board of Directors of Santa Clara Valley Water District by the following vote on May 26, 2009: AYES:
Directors
NOES:
Directors
ABSENT:
Directors
SANTA CLARA VALLEY WATER DISTRICT
By: __________________________________ SIG SANCHEZ Chair/Board of Directors ATTEST: LAUREN L. KNOFF
__________________________________ Clerk/Board of Directors
EMPLOYMENT AGREEMENT BETWEEN SANTA CLARA VALLEY WATER DISTRICT AND BEAU GOLDIE
This Employment Agreement (Agreement) is between the Santa Clara Valley Water District, a California special district (District), and Beau Goldie, an individual (Employee), effective May 26, 2009. This Agreement is entered into on the basis of the following facts, among others: A. District, acting by and through its Board of Directors (Board), desires to employ Employee as the District’s Chief Executive Officer (CEO) subject to the terms and conditions set forth in this Agreement. B. Employee desires to be employed by the District as its CEO subject to the terms and conditions set forth in this Agreement. C. District and Employee, mindful of the expense and administrative disruption of employment-related litigation, desire to prevent litigation arising from termination of the employment relationship between the District and Employee. D. District and Employee desire to establish and maintain a constructive business relationship by ensuring clarity about specific terms and conditions relating to that relationship, including Employee’s duties, compensation and benefits, performance evaluations, and related matters. BASED UPON THE FOREGOING, DISTRICT AND EMPLOYEE AGREE AS FOLLOWS: 1. Employment Start Date. District appoints and employs Employee as District CEO, and Employee accepts the employment, for an indefinite term that begins on June 1, 2009. 2. At Will Employment. Employee understands that he has no constitutionally protected property or other interest in his employment as CEO. He understands and agrees that he works at the will and pleasure of the Board and that he may be terminated or asked to resign at any time, with or without cause, subject only to the provisions of this Agreement. There is no express or implied promise made to Employee for any form or term of continued employment. This Agreement is the sole and exclusive basis for an employment relationship between the District and Employee. 3. Duties. Employee will perform the duties of District’s CEO as set forth (a) in the job description approved by the Board, (b) in the Board’s Governance Policies, (c) in direction of the Board approved by a majority of the Board at a lawfully held meeting, and (d) as otherwise provided by law, ordinance, or regulation. Employee will perform his duties and exercise his powers consistent with due diligence, according to the highest professional standards and in Page |1
compliance with all federal, state, and local laws, ordinance, and regulations which are applicable to or associated with the performance of such duties. Further, in carrying out these duties Employee will adhere to the District Values as set forth in the Board’s Governance Policies and to the Code of Ethics of the International City/County Management Association. 3.1 Employee will devote his full energy, skill, and ability to the performance of Employee’s duties. 3.2 Employee will not engage in any activity, whether or not for compensation, which is actually or potentially in conflict with, inimical to, or which interferes with the performance of Employee’s duties. Employee will not engage in any new business duties or pursuits or render any services of a business, commercial, or professional nature without the prior consent of the Board. 3.3 Employee will inform the Board in advance of absences from District work of more than one day during normal District workdays. 4. Compensation. District will pay Employee $231,545 in salary per annum for services under this Agreement, payable in installments at the same time as other employees of the District are paid and subject to customary withholding. Thereafter and subject to an annual evaluation of Employee’s performance and salary, the Board may, by resolution approving an amendment to this Agreement, increase Employee’s salary on the basis of merit and/or market factors. Nothing in this provision requires the Board to use a set formula or to provide a merit or other salary increase following the annual evaluation, but the Board will act in good faith in determining whether a salary adjustment is warranted. The Board will determine the amount of any salary adjustment no later than October 1 each year, with any adjustment retroactive to the immediately preceding July 1. 5. Benefits and Allowances. 5.1 Employee will be eligible for, and will receive, all regular benefits and leave allowances as generally provided to employees in the District’s unclassified service and as set forth in Attachment 1 except as follows: 5.2 Employee will receive a monthly transportation allowance of $600 in lieu of the car allowance set forth in Exhibit A. This allowance includes reimbursement for an appropriate allocation of vehicle insurance and all other expenses of vehicle ownership, acquisition, maintenance, and operation. Employee may also use this allowance for alternative means of transportation necessary and useful for the exercise of his duties. 6. Expenses of Employment/Membership in Organizations. 6.1 District agrees to reimburse Employee for actual and reasonable job-related expenses incurred in carrying out his duties as CEO, subject to reasonable budgetary restrictions. This includes membership in professional organizations associated with his profession and duties and attendance at meetings of such organizations. Employee understands and agrees that when he joins community or professional organizations in his role as CEO, he is viewed as representing the District. Accordingly, Employee agrees to inform the Board about organizations he joins in his capacity as CEO. Page |2
6.2 The Board and Employee agree that it is necessary and desirable for Employee to maintain current knowledge and skills appropriate to the leadership position of Chief Executive Officer, for the benefit of the District. The Board therefore encourages Employee’s participation in development opportunities for executive managers and agrees, to the extent the District is financially able, to budget for and pay for travel and subsistence expenses of Employee for professional meetings, short courses, institutes and seminars that are necessary for his continued professional development and for the good of the District. The parties anticipate that these professional development opportunities would involve approximately 40 hours of Employee’s work time each year, or as otherwise determined in Employee’s work plan. 7. Evaluation of CEO Performance. The Board and Employee agree that regular communication about their mutual expectations and about the Employee’s performance is essential to a strong working relationship. Accordingly, the parties agree that a closed session evaluation of Employee’s performance will be completed on at least a semiannual basis, no later than January 31 and July 31. The latter evaluation provides input for the salary review described in Section 4 of this Agreement. 8. Termination/Severance. 8.1 Employee may terminate this Agreement at any time upon 60 days’ written notice to the Board. 8.2 The District may terminate this Agreement at any time. Should District desire to terminate Employee’s services, it may do so only by an affirmative majority vote of the Board made during a lawfully conducted closed session meeting and confirmed thereafter in a public meeting. 8.3 If Employee is involuntarily terminated by District while still willing and able to perform the duties of CEO, District agrees to pay Employee severance pay consisting of a sum of money equal to 6 months of his then-current salary. Employee will have the option to receive the severance pay in one lump sum, or bi-weekly with the District’s regular payroll until the full amount is paid. Contemporaneously with the commencement and/or delivery of the severance pay set forth above, Employee agrees to execute and deliver to the District Counsel a release releasing the District and the Board of any and all claims that Employee may have or assert against them. 8.4 District is not obligated to pay, and will not pay, severance benefits under paragraph 8.3 if Employee is terminated for cause because of any of the following: (a) Employee’s conviction of a felony or conviction of a lesser crime involving acts or threats of physical violence, fraud or theft; (b) Employee’s commission of an act of material dishonesty to the District in the performance of his duties; (c) Employee’s intentional misappropriation of funds or property of the District; (d) Employee’s repeated and protracted unexcused absences from his office and duties or (e) Employee’s violation of a statute or law constituting misconduct in public office. 8.5 In recognition of Employee’s professional status, Employee and the Board will prepare a joint public statement to be made at the public meeting when termination of the employment relationship is confirmed.
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8.6 Employee may choose to resign his office instead of being terminated if a decision by the Board to terminate has been made in closed session. In such an event, the public announcement as provided for in paragraph 8.5 will state that Employee has resigned, and the provisions of paragraph 8.3 will remain applicable. 8.7 Except as provided in paragraph 8.6, if Employee resigns his employment with the District or retires from service to the District, he will not be entitled to any severance pay as provided for in paragraph 8.3. 9. General/Miscellaneous Provisions 9.1 Indemnification. The District will defend, hold harmless, and indemnify Employee against any tort, professional liability claim, or demand, or civil rights or other action, arising out of any act, event, or omission occurring in the performance of Employee’s professional duties as CEO, except to the extent that Employee’s actions are the result of gross negligence or willful misconduct. The District will defend, compromise, or settle any such claim or suit, as appropriate, and pay the amount of any settlement or judgment rendered thereon. This indemnification will extend beyond termination of employment or other expiration of this Agreement with respect to acts undertaken by Employee in his capacity as CEO. The extent of defense or indemnification may be limited by the provisions of California law. 9.2 Notices. Notices given under this Agreement will be in writing and will be: (a) served personally; (b) Delivered by first-class United States mail, certified, with postage prepaid and a return receipt requested, or (c) Sent by Federal Express, or an equivalent private mail delivery service. Notices will be deemed received at the earlier of actual receipt or 3 days following deposit with the U.S. Mail or private mail delivery service. Notices will be directed to the addresses shown below, provided that a party may change such party’s address for notice by giving written notice to the other party in accordance with this paragraph 9.2: To District:
Chair of the Board Santa Clara Valley Water District 5750 Almaden Expressway San Jose, CA 95118
To Employee: Beau Goldie Santa Clara Valley Water District 5750 Almaden Expressway San Jose, CA 95118 AND to Employee’s home address on file with the District 9.3 Entire Agreement/Amendments. This Agreement reflects the complete understanding and agreement between the parties as to those matters contained in it, and supersedes any and all prior or contemporaneous agreements, representations, and understandings of the parties. It may be amended at any time by mutual written agreement of the parties. 9.4 Attorney’s fees/Alternative Dispute Resolution. If any legal action or proceeding is brought to enforce or interpret this Agreement, the prevailing party as determined by the Page |4
court will be entitled to recover from the other party all reasonable costs and attorney’s fees, including such fees and costs as may be incurred in enforcing any judgment or order entered in any such action. Nothing herein precludes the parties from agreeing to an alternative method of dispute resolution. 9.5 Severability. Should any provision, section, or subsection of this Agreement be declared invalid or unenforceable by any court of competent jurisdiction, such ruling will not affect any other provision of the Agreement and the unaffected provisions will remain in full force and effect. 9.6 Effect of Waiver. The failure of either party to enforce against another a provision of this Agreement will not constitute a waiver of that party’s right to enforce such provision at a later time, and will not serve to vary the terms of this Agreement. 9.7 Employee’s Independent Review. Employee acknowledges that he has had the opportunity and has conducted an independent review of the financial and other effects of this Agreement; that he has had the opportunity to obtain legal or other review of the Agreement; and that in determining to enter into this Agreement he has not relied upon any representation of District, its officer, agents, or employees other than those expressly set forth in this Agreement. 9.8 Governing Law and Venue. The laws of the State of California will govern the interpretation, application, and enforcement of this Agreement. The signatures of the parties below indicate that each has read and understood the Agreement and will abide by the terms stated herein. EMPLOYEE
DISTRICT
_____________________________ Beau Goldie
____________________________ Sig Sanchez Chair of the Board of Directors ATTEST:
_____________________________ Lauren L. Knoff Clerk of the Board
Exhibit A – Unclassified Employee Benefits
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SANTA CLARA VALLEY WATER DISTRICT
Unclassified Employee Benefits (Effective 1/1/09 through 12/31/09)
Benefit
Vacation
Sick Leave *Note: Sick Leave payout applies only to the portion of accrued sick leave not converted to additional PERS service credit.
Sick Leave Conservation Executive Leave & Personal Leave Bereavement Leave
Holidays
Retirement
Health Insurance
Description 224 hours (28 days/year), vested immediately for entire fiscal year, may be accumulated up to 4 times entitlement. ¾ Cash pay-off for up to 21 days (168 hours) may be requested at any time during the fiscal year. Employee may elect to have all or a portion of the cash value transferred to a Deferred Compensation Plan. Annual Allotment = 224 hours Sick leave accrued at the rate of 1 day per month (96 hours per year) with unlimited accumulation. Upon separation in good standing or upon retirement an employee with*: ¾ less than 10 years of service, may convert up to 480 hours accrued sick leave paid at 50% of the cash value, with accrued sick leave beyond 480 hours paid at 25% of the cash value. ¾ 10 years of service, but less than 15 years of service, may convert accrued, unused sick balance at 50% of the cash value. ¾ 15 years of service, but less than 20 years of service, may convert accrued, unused sick leave balance at 75% of the cash value. ¾ 20 years or more of District service, may convert accrued, unused sick leave balance at 100% of cash value. Upon retirement, an employee may convert all or any portion of their accrued, unused sick leave to CalPERS and counted as additional CalPERS service credit. Upon death, all accrued sick leave will be paid to the employee’s estate at 100% of the equivalent cash value. Employees with a minimum of one year service, who have used 27 hours or less of sick leave, may be eligible to convert up to 24 hours of sick leave to cash or vacation. Notification distributed in December 2009. 24 hours of executive leave and 32 hours of prorated personal leave provided upon hire. Leave may be converted to cash or credited to a deferred compensation plan at any time during the fiscal year. Automatically paid-out if no election is made. 3 days of bereavement leave for obligations arising from the death of a family member as defined in the At-Will Policy for Employees in the Unclassified Service. Additional time may be charged to sick leave for a total leave (3 days of bereavement leave plus sick leave) not to exceed 14 consecutive calendar days. 13 designated days per calendar year. California Public Employee’s Retirement System (CalPERS) 2.5% at 55 retirement plan. Required employee contribution is 8% (District pays 0.5926%; Employees pay 7.407%). In addition, employees pay 2.5%, as an after-tax deduction, towards the District’s CalPERS cost. CalPERS Survivor Insurance provided at Level 4. Pre-Retirement Optional Settlement 2 Death Benefit as well as the Post Retirement Survivor Continuance. Medical, Dental, Vision Care and EAP benefits paid by the District for regular employees and their eligible dependents including registered same sex domestic partners, or domestic partners of the opposite sex age 62 or over, who meet the eligibility criteria. Domestic partner coverage is taxable income for federal income tax purposes. District employees may only receive coverage under one plan; either as single coverage or family coverage and either as the primary subscriber or as a dependent under the plan of a spouse or registered domestic partner who is a regular District employee. Employee’s eligible dependents will only be covered under one employee’s medical plan. Kaiser, Blue Shield, Delta Dental, Vision Care and Concern (EAP)
Date Pay Provided Period 6/15/2009
Hire Date
09-13
Accrue 3.69 hours of Sick Leave Per Pay Period
January 2010
10-01
New balances provided on 6/15/09
09-13
Hire Date
Hire Date
Hire Date
1st of Month after Hire Date
January 2009
Retirement Benefits for employees hired prior to March 1, 2007
Retirement Benefits for employees hired on or after March 1, 2007 Disability Insurance
Life Insurance
Medical coverage paid for retired employees with 10 years of continuous District service. Medical, Dental & Vision coverage paid for retired employee and one eligible dependent with 15 or more years of continuous District service. Medical, Dental & Vision coverage paid for retired employee and two eligible dependents with 25 or more years of continuous District service. Medical coverage paid for retired employees with 15 years of continuous District service. Medical coverage paid for retired employees and one eligible dependent with 20 or more years of continuous District service. District provides Short Term Disability equal to 66 2/3% of salary to a maximum weekly benefit of $3462 with a 14-day waiting period. If still disabled after 6 months, Long Term Disability provides 66 2/3% of salary to a maximum monthly benefit of $15,000. $100,000 of District paid Life Insurance with a five-year phase out in declining increments of $10,000 per year starting with $50,000 coverage upon retirement. The premium attributable to life insurance benefit exceeding $50,000 is considered “imputed income” and must be reported as taxable earnings on the W-2 statement each year, as required by the IRS.
Based on continuous District service upon retirement
Based on continuous District service upon retirement Hire Date
Hire Date
Employees may purchase additional amounts in supplemental Life Insurance up to a maximum benefit of $500,000. Other
Deferred Compensation FlexChoice (Section 125)
¾ Subject to the approval of the GM, Unclassified employees are eligible for $450 per month car allowance. ¾ General Manager & District Counsel are eligible for $600 per month car allowance. Mileage is paid on District business out of county in addition to monthly car allowance. ¾ Deferred compensation plan available at employee’s option ¾ Annual District matching contributions, up to $4,000, available when enrolled in District’s 401(a) Defined Contribution Match Plan ¾ Health Care Spending Account – Maximum contribution up to $3,000 for eligible medical, dental, vision, prescription and non-prescription expenses. ¾ Dependent Adult or Child Daycare – Maximum contribution $5,000 per family or $2,500 if you file taxes “Married Filing Separately” per calendar year.
Hire Date
Hire Date
Hire Date
CY
THIS IS A BENEFITS SUMMARY ONLY OFFICIAL DOCUMENTS/AGREEMENTS ALWAYS GOVERN HOW A BENEFIT IS DETERMINED OR ADMINISTERED
January 2009