Report No:Meeting Date:

16-130

September 14, 2016

Alameda-Contra Costa Transit District

STAFF RE PO RTTO:

FROM:

SUBJECT

AC Transit Board of Directors

Denise C. Standridge, GeneralCounsel

Retirement System Manager's Employment Agreement

ACTION ITEM

RECOMMENOEO AcrlON(S)

Consider approving the restatement of the Retirement System Manager's EmploymentAgreement.

BACKGROUND/RATIONALE

The District and the District's Retirement Board entered Into an agreement in 1996 wherebythe District would retain the services of a Retirement System Administrator, but the positionwould be evaluated, and could be terminated, by the Retirement Board. The agreement didnot specifically address the issue of how compensation would be established. The partiesintended to amend this agreement in 2002 to allow the Retirement Board to establishcompensation for the Retirement System Administrator at a level at least 10% lower than thecompensation given to the HR Director and Director of Transportation. This enabled theRetirement Board to adjust the salary at 10% below a District Grade 15, which at the time wasSill,120 - $132,672

The amended agreement was presented to the Executive Committee on January 24, 2002, atwhich time it was recommended that the Board approve the amendment between the Districtand the Retirement Board. However, at the Board Meeting on February 7, 2002, GM MemoNo. GC 02-022a discussed the amendment between the District and Retirement Board but the

actual attachment was not the intended amendment but the First Amended EmploymentAgreement of the Retirement System Administrator. Unfortunately, the Board never tookofficial action to approve the actual amendment between the District and the RetirementBoard. Nevertheless, the attached restatement of the Retirement System Manager's'Employment Agreement may be reviewed and approved pursuant to the original 1996agreement.

This restatement was approved by the Retirement Board on August 25, 2016. The parties stillintend to amend the agreement between the District and Retirement Board and that will bebrought in a later staff report.

BUDGETARY/FISCAL IMPACT

The flscalimpact is the annualsalary rate of$165,000 plus benefits

' Please note that the Retirement System Administrator classification was reclassified to Retirement System Manager on August 12, 1998

1 of 9

Report No. 16-].30Page 2 of 2

ADVANTAGES/DISADVANTAGES

The advantage of approving the restated employment agreement is that it blends the originalagreement and subsequent amendments into one updated agreement. The restatement alsoprovides the Retirement System Manager a salary increase, his first since 2007. There is no

disadvantage to approving the agreement.

ALTERNATIVES ANALYSIS

The alternative is to postpone approving the agreement until after the new agreementbetween the District and Retirement Board is approved. This is not recommended because itwillfurther delay the raise for the Retirement System Manager.

PRIOR RELEVANT BOARD ACTION/POLICIES

GM Memo No. GC 02-022a

A'TTACHMENTS

1. Proposed Restated Employment Agreement

Approved by: Denise Standridge, General Counsel

Reviewed by: Michael Hursh, General ManagerClaudia L. Allen, Chief FinancialOfficer

Prepared by: Denise Standridge, General Counsel

2 of 9

Att. I to SR 16-130

EMPLOYMENT AGREEMENT

THIS AGREEMENT is, by and between the Alameda-Contra("DISTRICT" or "EMPLOYER") and Hugo Wildmann (EMPLOYEE).

Costa Transit District

WHEREAS, EMPLOYER desires to employ the services of EMPLOYEE as Retirement SystemManager for the AC Transit Employees Retirement Plan; and

WHEREAS, EMPLOYER has determined that EMPLOYEE has thebackground and skills to perform the duties of the Retirement System Manager;

necessary training,

WHEREAS, EMPLOYER and EMPLOYEE first entered into an Agreement on August 25,1997, with EMPLOYEE commencing services on September 9, 1997, and thereaRer amended theAgreement on June 12, 2002, June 2, 2003, August 25, 2005 and June 2 1 , 2007;

NOW, THEREFORE, in consideration of the faithful performance of the temps,promises and covenants contained in this Agreement, the parties agree as follows:

conditions,

SECTION 1: TERM

EMPLOYEE'S employment with the DISTRICT and this Agreement shall remain in effect untilterminated by DISTRICT or by EMPLOYEE, as provided in this Agreement

SECTION 2: DUTIES

EMPLOYER agrees to employ EMPLOYEE as Retirement System Manager of the AC TransitEmployees' Retirement Plan ("the Plan), to perform all legally permissible and proper duties andftmctions for this position as described in EMPLOYER'S classiHlcation system and as the Retirement

Board of the Plan ("the Retirement Board") shall from time to time assign. EMPLOYEE agrees topedomi the duties of Retirement System Manager, as described in EMPLOYER'S classification system,as well as such other duties and ftmctions as the Retirement Board shall from time to time assign whichare reasonably related to the position of Retirement System Manager.

SE£!!QB..3: REPORTING RELATIONSHIP

EMPLOYEE shall report directly and solely to the Retirement BoardRetirement Plan.

for the AC Transit Employees

SE(l:TION 4: STATUS

A. EMPLOYEE'S employment status is that of an at-will employee. EMPLOYEE understands andagrees that he serves at the sole and exclusive pleasure of the Retirement Board. Further,EMPLOYEE understands and agrees that EMPLOYER may terminate EMPLOYEE'Semployment with EMPLOYER at any time upon notice by the Retirement Board toEMPLOYER that the Retirement Board has voted to relieve the EMPLOYEE of hisresponsibilities, subject only to the notice and severance pay provisions of Section 8 of thisAgreement. EMPLOYEE ftKther understands and agrees that EMPLOYER has made no impliedor express oral or written assurances of continued employment with EMPLOYER.

C:\Unis\dstudri\AppData\Lonl\Microsoft\Windows\Temporary [nteme! Fi]es\Content.Out]ook\40NKTUQ6\EMPLOYMENT AGREEMENT 082216.docxPage I of 7

3 of 9

B. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right ofEMPLOYEE to resign at any time from EMPLOYER'S employment, subject ody to the noticeand severance pay provisions of Section 8 of this Agreement.

C EMPLOYEE shall devote his full time and energy to the fulfillment of his duties toEMPLOYER. However, EMPLOYER grants EMPLOYEE pemlission to teach, consult orconduct other non-EMPLOYER related business with the prior written approval of theRetirement Board, provided the outside activities do not interfere with EMPLOYEE'S ability toperfomi his duties for the DISTRICT, including the supervision of personnel and the departmentEMPLOYEE is responsible for supervising.

SECTION 5: COMPENSATION AND BENEFITS

A. For services rendered under this Agreement, EMPLOYER agrees to increase EMPLOYEE'ssalary to One Hundred, Sixty-Five Thousand dollars ($165,000.00), payable in equalinstallments at the same time as all other unrepresented employees, elective January 1, 2016.Each year the Retirement Board, at its discretion, may adjust EMPLOYEE's salary.

B The Retirement Board shall evaluate Employee's perfomiance and compensation no lessfrequently than every third year, beginning 6om 2015, and shall adjust Employee'scompensation and infomi the District of any adjustment and its elective date. Suchcompensation shall reflect the Retirement Board's evaluation of the EMPLOYEE's performanceand shall reflect, if deemed necessary by the Retirement Board, a market survey of total annualcompensation for similarly situated financial executives, including but not limited to otherCalifomia public Retirement system managers. In no event shall EMPLOYEE's salary in anyyear exceed an amount which is fiReen percent less than the upper limit of the salary range forthe position of Chief Financial Officer, which as of the date of the execution of this agreementwas $1 85,400 to $236,900,,including as that range may in the future be modified.

c. EMPLOYER agrees to noti$r EMPLOYEE and the Retirement Board whenever EMPLOYERapproves a general salary increase for unrepresented employees. Tbe Retirement Board retainscomplete discretion whether to take any action or no action with respect to EMPLOYEE acerreceipt of such notification.

D. EMPLOYEE shall be entitled to the following benefits

[. ])isabi]itv, Hea]th and Life ]nsurance

a EMPLOYER agrees to put into force and to make necessary premium paymentson behalf of EMPLOYEE for medical, dental, vision, and long-temp disabilityinsurance. Such benefits will be at least equal to those benefits generally providedby the District to unrepresented employees as of January 2016.

b. EMPLOYER agrees to provide EMPLOYEE with the benefits generally providedby the District to unrepresented employees.

c. EMPLOYER during EMPLOYEE's employment agrees to put into force and tomake necessary premium payments for basic life insurance and accidental deathand dismemberment(AD&D) insurance. The basic life insurance policy is to betwice the amount of EMPLOYEE's annual gross salary as set forth in section

page 2 0t 7C:\UsenUstandri\AppData\l.oal\MicrosoR\Windows\Temporary Interact Pita\Content.Outlook\40NKTUQ6\EMPLOYMENT ' AGREED\fIENT 082216.dock

4 of 9

5(A), subject to a maximum of $750,000.00. The AD&D policy is to have limitsof $15,000.00. Upon EMPLO'YEE's retirement 6'om employment withEMPLOYER, the EMPLOYER shall continue a policy of basic life insurance forthe lifetime of EMPLOYEE in the amount of $50,000.00 covering the life ofEMPLOYEE. The AD&D policy shall temiinate upon EMPLOYEE's retirement6om employment with EMPLOYER.

d EMPLOYER during EMPLOYEE'S employment shall make available toEMPLOYEE at Open Enrollment and at EMPLOYEE's expense supplementallong-term disability insurance and voluntary term life insurance.

e Upon temlination of. employment.COBRA benefits granted by law.

EMPLOYEE shall be entitled to those

2 Retirement

EMPLOYEE is to receive benefits under the AC Transit Pension Plan provided to allother unrepresented employees hired at the same time as Employee.

3. General Leave

a In lieu of vacation leave, sick leave, or management leave, EMPLOYEE shallaccrue forty-seven(47) days of general leave annually. General leave shall becredited to EMPLOYEE on EMPLOYEE'S anniversary date. EMPLOYEE mayaccrue up to 170 days of general leave. At the option of EMPLOYEE, upon anannual election up to one third (1/3rd) of accrued general leave shall be paid toEMPLOYEE. Any accrued general leave remaining at the time of termination ofemployment or retirement shall be paid to EMPLOYEE.

b. For purposes of this subsection, one day is equal to eight (8) hours

4. Holiday Leave

EMPLOYER shall provide EMPLOYEE with eleven (11) paid holidays ofEMPLOYEE's choice annually, which includes one paid birthday holiday and two paidfloating holidays. If EMPLOYEE does not make an election for holidays before the endof the first pay period in January of each year, he shall receive the same holidaysprovided to other unrepresented management employees. Holiday leave shall accrue toEMPLOYEE on January 10f each year and shall be used within the year of accrual.

5 Boudin

EMPLO'YER shall bear the full cost of any fidelity or other bonds required of theEMPLOYEE under any law or ordinance.

SECTION 6: REIMBURSEMENT FOR BUSINESS RELATED EXPENSES

A. .!rav$LBBd lbleeliaEExn€ases. EMPLOYEE shall be reimbursed by EMPLOYER for traveland meeting expenses approved by the Retirement Board and in accordance with District policy.

C:\Uses\dstudri\AppData\Local\Microsoft\Windows\Temporary h Files\Content.Outlook\40NKTUQ6\EMPLOYMENT AGREEMENT 0822 16.dockPage 3 of 7

5 of 9

SECTION 7: PERFORMANCE EVALUATION PROCEDURES

A. The Retirement Board shall evaluate the performance of EMPLOYEE as provided in Section 5-B, above. When such evaluations are made, they shall be made on or before September 9, theanniversary date of EMPLOYEE'S employment. 'r'he perfomlance evaluation shall be in writingand submitted by the Retirement Board to EMPLOYEE within 30 days of EMPLOYEE'Sanniversary date. The Retirement Board shall hold an evaluation conference with EMPLOYEEat the time it provides EMPLOYEE with the evaluation, unless EMPLOYEE requests a delay inholding such a conference.

B The perfomiance evaluation shall be based on the duties and responsibilities of EMPLOYEE.The Retirement Board and EMPLOYEE shall establish the Perfomlance standards to be appliedto the evaluation as well as the Pedomiance Evaluation fomiat Both the standards and the fomlat

shall be reviewed by the Retirement Board and EMPLOYEE as soon acer the execution of thisAgreement as practicable so there is an understanding by the parties of the basis for evaluation.

c. EMPLOYEE shall be given an opportunity to respond orally and/or in writing to theevaluation(s), but no later than 30 days Bom receipt of the evaluation(s). The Retirement Boardagrees to meet and discuss the evaluation with EMPLOYEE at his request within this 30 dayperiod, even though it is after the date of the perfomlance evaluation periods identified in thisSectionC

SE(:TION 8 RESIGNAT[ON, TERM]NAT]ON AND SEVERANCE PAY

A. Bs$jgBa!!en: EMPLOYEE may voluntarily resign his position by delivering a letter ofresignation to the Retirement Board no less than 30 days prior to the elective date ofresignation, unless an earlier date of departure is agreed to by the Retirement Board andEMPLOYEE. Promptly acer die elective resignation date, EMPLOYER shall pay EMPLOYEEall salary and benefit amounts both accrued and owing pursuant to this Agreement and otherapplicable laws, rules, programs and policies of EMPLOYER and State and Federalgoveiiuuents.

B. Termination

l The Retirement Board may direct the EMPLOYER to temiinate EMPLOYEE withoutcause. The EMPLOYEE recognizes that he serves at the pleasure of the RetirementBoard as an at-will EMPLOYEE. Except as otherwise provided by this Agreement or bylaw, EMPLOYEE is exempt 6om any pre-termination due process rights(such as Skellyrights) or dispute resolution or grievance rights which exist under EMPLOYER'Spersonnel rules. The Retirement Board shall provide EMPLOYEE with 30 days noticeprior to the Creative date of termination, except for temiination for willful misconduct inoffice

2 The Retirement Board may direct the EMPLOYER to temlinate EMPLOYEE for willfulmisconduct without notice. However, the Retirement Board must identify the willfulmisconduct which is the cause of the temiination. As used in this subsection, willfulmisconduct consists of malfeasance or gross negligence in the perfomiance ofEMPLOYEE'S duties.

C:\Users\dstandri\AppData\Local\h(icroson\Windows\Tanporaly Intema Fifa\Contmi.Outlook\40NKTUQ6\EMPLOYMENT AGREEMENT 082216.doer

Page 4 of 7

6 of 9

3 EMPLOYER shall be deemed to have terminated EMPLOYEE if he involuntarily resignsbecause the Retirement Board either requests his involuntary resignation or causes areduction in his pay or other financial benefits which is not applicable to allunrepresented employees of EMPLOYER which causes EMPLOYEE to resign, or in theevent of a takeover or consolidation of EMPLOYER with another agency which resultsin the loss of EMPLOYEE'S position or substantial reduction in the duties ofEMPLOYEE.

4. In the event of EMPLOYEE'S temiination by the EMPLOYER, EMPLOYEE shall beentitled to severance pay. However, EMPLOYEE shall not be entitled to severance pay ifhe is temiinated for willful misconduct or voluntarily resigns.

c. $f):SlaeSa.Ea!: in the event of EMPLOYEE'S termination by the EMPLOYER(and subject tothe exceptions set forth Section B-4 above), he shall be entitled to six (6) months severance payconsisting of EMPLOYEE'S salary in erect at the date of temiination. EMPLOYEE shallcontinue to receive disability, health and life insurance benefits during this period. At the end ofthe six month severance period EMPLOYEE shall be entitled to continue those benefits coveredby COBRA. EMPLOYEE also shall receive a cash payment of accrued general leave dueEMPLOYEE. Severance pay shall be paid on EMPLOYEE'S last day of employment.

D. Return of District Property: On the effective date of his resignation, suspension or termination,EMPLOYEE shall return to the District, all DISTRICT property in EMPLOYEE'S possession orunder his control unless:

l

2

an earlier date for retum of DISTRICT property is established by the District, or

EMPLOYEE has compensated the DISTRICT for the property which is not retumed inaccordance with DISTRICT procedures.

EMPLOYEE shall not be entitled to final payment of his salary until either of the above hasoccurred.

SECTION 9: DISPUTE RESOLUTION

A. All disputes arising out of EMPLOYEE'S employment with EMPLOYER, including disputesregarding the terms or application of the terms of this Agreement, excluding evaluations coveredin Section 6, shall be resolved through binding arbitration.

B Except for matters within the sole jurisdiction of the Workers' Compensation Appeals Board, theparties agree that binding arbitration shall be the sole and exclusive avenue of recourse to resolvedisputes between them.

c.

D

EMPLOYEE knowingly and voluntarily agrees to waive all rights to take all disputes Identifiedin subsection A to state or federal court for resolution.

Binding arbitration shall be conducted pursuant to Califomia Code of Civil Procedure Section1280 et seq., excluding Section 1283 (Depositions).

C:\Uses\dstandri\AppData\Local\MiaosoR\Windows\Temporary Intcmet Files\Content.Oudook\40NKTUQ6\EMPLOYMENT AGREEMENT 0822 16.docxPage 5 of 7

7 of 9

E. EMPLOYER or the Retirement Board or EMPLOYEE may request that the dispute be submittedto arbitration. The Retirement Board shall have the right to fully participate in any and allarbitrations.

F. EMPLOYER and EMPLOYEE shall attempt to agree upon an arbitrator. If no agreement can bereached, either party may request that the State of Califomia Conciliation and Mediation Serviceprovide a panel of five(5) names of experienced labor arbitrators. Each party shall altemativelystrike a name until one name remains. EMPLOYEE shall strike just. The remaining panelmember shall be the arbitrator.

G. The arbitrator's decision shall be in writing, setting forth the Endings of fact, reasoning andconclusions on the issues submitted. The arbitrator shall be without power or authority to issue adecision which violates the temps of this Agreement. The decision of the arbitrator shall besubmitted to EMPLOYER and EMPLOYEE within thirty(30) days of the hearing and shall befinal and binding upon the parties.

H. By mutual agreement, the parties may request an expedited arbitration process according to theRules of the American Arbitration Association.

1. All costs for the services of the arbitrator, including but not limited to per diem expenses, travel,and subsistence expenses, will be bome by the EMPLOYER. All other costs will be bomb by theparty incurring the costs.

SECTION 10: GENERAL PROVISIONS

A. Requests for reimbursement for expenses and use of general leave shall confomi to therequirements of applicable DISTRICT policies and regulations. For general leave theDISTRICT'S policies goveming use of vacation leave, sick leave and any other leaves shalltarplrn I I

B This'Agreement represents the entire agreement between the parties and shall be interpreted inaccordance with the laws of the State of Califomia.

C This Agreement is a personal services agreement and as such may not be assigned by eitherparty. However, to the extent that there are benefits due heirs, they shall be entitled to thosebenefits and this Agreement shall be binding on any successors of the DISTRICT.

D This Agreement shall be binding upon and inure to the benefit of the heirs at law and executorsof EMPL0'YEE.

E.

F.

This Agreement may be amended by the written consent of the parties

EMPLOYEE shall be responsible for the personal tax consequences associated with anyprovision of this Agreement. EMPLOYER makes no representation regarding the taxconsequences of any provision of this Agreement upon EMPLOYEE.

G. This Agreement shall be executed in duplicate and any duplicate shall be deemed an original

H. The Board of Directors, on December 14, 1994, authorized the General Manager to executeagreements of this nature on behalf of EMPLOYER.

Page 6 of 7C:\Users\dstandri\AppDati\l.oul\Miaosoft\Windows\Temporary Internet lila\Comma.Outlook\40NK'lUQ6\EMPLOYMENT ' AGREEhf(ENT 0822 16.dock

8 of 9

1.

J.

Any change in the benefits available to employees represented by any labor union shall have noeject on the provisions of this Agreement.

If any provision or any portion of any provision of this Agreement is held unconstitutional,invalid or unenforceable, the remainder of this Agreement shall be deemed severable and shallremain in full force and erect.

K. A copy of the Agreement between the Alameda-Contra Costa Transit District and the AC TransitDistrict Retirement Board conceming the employment of staff assigned to the Retirement Boardis attached for information only.

Ths Agreement is signed and executed as of the day and year first above written

ALAMEDA-CONTRA COSTA TRANSIT DISTRICT

Michael Hursh, General Manager

RETIREMENT BOARD OF THE AC TRANSIT EMPLOYEES RETIREMENT PLAN

Jefhey Lewis, Chair

APPROVED AS TO FORM

Denise Standridge, District General Counsel

APPROVED AS TO FORM

Russell L. Richeda, Counsel to the Retirement Board

EMPLO'YEE

Hugo Wildmann, Retirement System Manager

C:\Uscn\dstandri\AppData\LocahMicrosoR\Windows\Temporary Intemet Files\Content.Outlook\40NK'lUQ6\EMPLOYhftENT AGREEMENT 0822 1 6.docx

Page 7 of 79 of 9