Jim Valenti Open Records Request Detail Two Million Payment
In addition to the Steve Norwood open records request, I also submitted an open records request asking for documents pertaining to Jim Valenti’s retirement as the UMC chief. As you likely know, Jim Valenti effectively tendered his resignation on October 5, 2015 by announcing that he will not be seeking an extension to his current contract. In “Is Jim Valenti Out?,” on September 30, 2015, I shared with you court depositions about the children’s hospital that clearly demonstrated that Jim Valenti wanted to keep his job but the UMC board, through Steve DeGroat, had indicated that it was unlikely an offer would be extended to him.
A few days after I wrote that Jim Valenti was unlikely to remain the UMC leader, he announced his resignation. Publicly, the insinuation is that Valenti was out as part of the settlement between UMC and children’s. In “Looks Like Jim Valenti Wants His Job Back,” I shared with you an advertising campaign that was launched to keep Valenti as the hospital’s CEO. It remains unclear as to who is paying for the campaign. As of yesterday, November 8, 2015, only 65 individuals have signed the petition. Clearly there is little support for him.
As a result of all of the activity about his job, I submitted an open records request asking for various documents concerning Valenti’s job and anticipated retirement. On November 4, 2015, I received 189 pages in response to my request.
One of the items I requested asked for information about any benefits or payments from now until he retires. There have been rumors that Jim Valenti will receive “millions” upon his departure from UMC. The figure most rumored about is $3 million.
UMC withheld one document summarizing payments expected to be made to Jim Valenti. UMC has asked for an opinion from the Texas Attorney General. They allege it is client-attorney privileged.
Jim Valenti’s current salary is $480,686.14 annually.
The “Deferred Compensation Plan Agreement” between UMC and Jim Valenti that went into effect on October 1, 2005, lays out what Jim Valenti will be paid upon his retirement. The plan is a so-called “457(f)” which allows employees and employers to contribute towards a retirement account while deferring federal and state income taxes on the amounts collected in the plan.
According to the plan, beginning on September 30, 2006, a percentage of Valenti’s base salary is contributed to a deferred compensation account. The percentage increases annually and is in addition to his base salary. The percentage started at 30% in 2006 and increased to 50% on September 30, 2015. The deferred account is earning interest.
According to the agreement, the amount in Jim Valenti’s deferred compensation plan is his on May 31, 2016, or if he is terminated or leaves UMC. If Valenti is fired for cause he loses the money in his deferred benefits account.
Within thirty-days after Jim Valenti leaves UMC, UMC will pay him the total amount of the amounts collected in his deferred benefits package plus an additional amount equal to 36.45% of the total in the account. The percentage is to help offset the payroll taxes. (section 2.3.2)
On November 10, 2014, BKD, Wealth Advisors, LLC. drafted a report for UMC detailing the total amount that Jim Valenti’s deferred compensation plan had accumulated. As of September 30, 2014, the total amount, including interest was $1,388,378.70.
The likely amount that Jim Valenti will be paid on May 31, 2016 is about $1.6 million. In addition, he will also be paid approximately another half a million dollars to help offset the taxes he will incur with the lump sum payment. This is the 36.45% percent the county agreed to pay in the original plan agreement.
According to the information I received, UMC has been accounting for the compensation plan and presumably has the money available to make the payment.
You can view the documents I received as a result of my open records request by going to this link.