Editor’s note: At the bottom of this story are links to the documents the Post obtained from Silicon Valley Clean Water through the California Public Records Act.
BY EMILY MIBACH
Daily Post Staff Writer
Newly released documents shed light on why a sewage processing agency, Silicon Valley Clean Water, paid its general manager $875,000 as part of a severance agreement, and it appears a big part of that was equity the agency gave him in a $4.5 million, six-bedroom home in the hills overlooking Redwood City.
The agency — which is owned by the cities of Redwood City, Belmont, San Carlos and Menlo Park’s West Bay Sanitary District — has refused to say why it paid General Manager Dan Child $875,000 when he left the agency.
The Post filed California Public Record Act requests for several documents from the agency. While most of the paper’s requests were denied, the agency did provide his employment contract and a highly-redacted attachment to his settlement agreement — and both offer clues behind the unusual payout.
The employment contract indicates that upon leaving the district, he would get 38% of the appreciation in a home at 379 Greendale Way. The district bought the home for Child in 2010 for $2,540,000. Under his employment contract, his equity in the home increases year by year. He personally didn’t contribute to the purchase price of the home, so it was essentially a gift to him.
The home is now on the market for $4,598,000. If it sells for that price, the appreciation (the difference between the purchase price and the sale price) would be $2,058,000. Under his contract, he would be entitled to 38% of that or $782,040.
The Post asked current general manager, Teresa Herrera, if that figure was correct. She said she hasn’t done the calculations herself, but the figure “appears to be close.”
Did he resign or was he fired?
But there’s a question about whether Child would automatically get that money.
If the agency’s board fires him “for cause,” he isn’t entitled to the money, his employment contract says.
The settlement agreement said that the board fired him “for cause” and that Child insists that he resigned.
The distinction is important because if he resigned, he would be eligible for his 38% share of the home’s appreciated value. If he was fired for cause, he gets nothing.
His employment contract describes “for cause” as “negligence, gross insubordination, conviction of a felony, conduct unbecoming employment with the authority, professional misconduct that reflects adversely upon the authority” or a breach of the employment contract.
The board appears to have fired him around May 2018, but the severance agreement that both sides signed was reached in late April of this year. That would suggest that the two sides argued behind the scenes about whether he resigned or was fired for long as 11 months.
If, in the end, the board gave him the entire $782,040, that would be 89% of the $875,000 check he got as a result of the severance agreement.
What about the remaining $92,960?
His contract said that if he was fired “for cause,” he would get no severance pay. But if the dismissal was without cause, he was eligible for up to a year’s worth of pay.
In 2017, his last full calendar year, he was paid $330,213.
It’s possible that the $92,960 is a portion of the year’s pay that he would get if he were dismissed without cause.
Claim had been filed against Child
Documents given to the Post by the agency hint at why the board in May 2018 decided to fire him for cause.
An attachment to the settlement agreement indicates the agency settled a claim against Child by another employee for an undisclosed amount. The nature of the complaint and the employee’s name were redacted. In fact, 13 of the 24 pages of the attachment were redacted by the agency either in whole or in part. Some of the pages were completely redacted, with a large black box covering all text on the page.
In a letter to the Post, Herrera said the redactions applied to information that could be legally withheld under the open records act because it was an unwarranted invasion of privacy or that the “public interest” in concealing the information outweighed reasons not to disclose it.
Herrera gave the same reasons for refusing to release any claims made by Child against the agency.
Among the claims, he alleges the agency’s board violated the Brown Act, the state law that regulates public meetings. The San Mateo County District Attorney’s office said yesterday it had not been informed of any Brown Act violations regarding the sewer agency.
Documents
• Aug. 14, 2019, letter from SVCW responding to Post’s public records request
• March 28, 2006, Employment Agreement for Dan Child
• Feb. 14, 2008, Amended and Restated Employment Agreement
• Sept. 1, 2009, First Supplemental Employment Agreement
• May 13, 2010, Amendment to 1st Supplemental Employment Agreement
• Jan. 1, 2013, Second Amended and Restated Employment Agreement
• Sept. 3, 2018, Child Settlement Agreement
Thank you, Emily and the Daily Post, for doggedly pursuing this story! It’s shocking that we’re not getting a straight answer from SVCW about the reason for this high pay-out. I’m glad you’re digging into this and asking questions.
How does something like this happen? Does Child have something on the board members they would find embarrassing, like dirty pictures?