New contract drastically reduces mgr. severance

If there ever comes a time when Manager Joe Young and Oxford Village must part ways, either through termination, resignation or retirement, it won’t cost the taxpayers an arm and a leg.

At an Aug. 16 special meeting, the village council voted 5-0 to approve a new employment agreement with Young, who’s served as manager since June 14, 2004, that drastically reduces the amount of severance pay and benefits he’s entitled to on his way out the door.

“It caps the financial exposure to the village and doesn’t have the tail wagging the dog,” said village attorney Bob Davis, during an Aug. 18 phone interview with this reporter. “In other words, if he leaves, he gets a capped amount (and) if we fire him, he gets a capped amount.”

Under the new agreement, if Young is either fired, quits or decides to retire, he would receive “a one-time severance payment of $20,000.”

He would also be entitled to 90 days worth of benefits, which are listed in the contract as health insurance, dental and optical coverage, unused vacation days, life insurance, and short-term and long-term disability coverage.

Davis noted this severance package is “a rational amount” and “very consistent with case law.”

“If you were suing (for) severance, a fairly common award is three months and contractually, it’s very common,” he explained. “The contract is now in line with what we would all believe to be a more accepted set of terms.”

This new deal is a far cry from the previous contract under which Young had been earning three days of severance pay, including benefits, for every month he’s been employed with the village since July 1, 2004.

To put that in actual dollars, if Young had been fired prior to this new agreement, he would have been entitled to a pay out of $115,464 in salary, plus a year-and-a-half worth of benefits, according to the manager’s calculations. With benefits, Davis estimated the total package to be worth approximately $150,000.

However, Young would have only received that staggering amount upon his termination. Unlike the new contract, the previous one made it very clear that if Young left the village “of his own accord,” then the severance provision was “null and void,” and no payment was due.

In the event of Young’s termination, Davis told this reporter, the village would have been “significantly penalized.”

The only way Young is not entitled to the new severance package is if his termination is due to him being “convicted of any crime related to malfeasance in office,” according to the agreement.

When asked why he agreed to change his contract in a way that seems to benefit the village more than him, Young replied, “The village has been very good to me” and as a result, he wanted his contract to be “equitable for both parties.”

“It was the right thing to do,” Young continued. “I’ve been blessed to be here. I’m thankful and appreciate what they’ve done for me and look forward to continuing on to see if we can get more good things accomplished.”

“I just want to thank everyone on the village (council) and Joe (Young) and Bob (Davis),” said Councilman Tom Kennis. “Thank you all for reviewing this, going through (it), being so thorough and professional about it.”

Young continues to serve “at the sole pleasure of the majority of the full village council,” according to the contract.

“The village manager (is) recognizing the power of the council to terminate (him) for any reason as an at-will employee,” said Davis to council.

Prior to last week’s significant change, Young’s severance package had evolved over the years in a way that was more beneficial to him than the village.

The provision entitling Young to three days worth of severance pay and benefits for every month of employment since July 1, 2004 didn’t make an appearance in his contract until February 2006.

But at that time, there was a cap. Severance pay was limited to six months worth.

Also, Young would only receive pay and benefits if he was terminated without just cause.

When a new contract was approved for Young in December 2009, two big changes were made.

One, the six-month cap was eliminated, meaning the amount of severance pay and benefits Young could accrue was now only limited by how long he was employed with the village.

Basically, every month with the village since July 2004 equalled a bigger potential payout for Young and it just continued to grow and grow.

“Obviously, when they signed the agreement at the time, we weren’t expecting me to stay around as long as I have,” Young said.

The other change was the elimination of the just-cause condition and the addition of language stating Young would not receive severance if he was convicted of any crime related to malfeasance in office.

Over the years, Young’s annual salary has been reduced.

When he started in 2004, it was $77,000. It dropped to $73,150 in 2010 and is now at $69,493.

However, to offset the recent 5 percent salary reduction, the contribution from the village to Young’s pension was increased from 4.5 to 9.5 percent.

 

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