EMPLOYMENT AGREEMENTS

In the increasingly dynamic world of city management there are numerous reasons why no local government manager or administrator should be without an employment agreement. Given that it usually takes most professionals an average of six months to land a new position, it is important that you have a good severance package in an agreement so that you will be able to sustain a prolonged job search without having to tap any savings or retirement funds when you have to unexpectedly resign. In addition, there are important tax breaks that one can receive if certain provisions are included in your separation agreement. It can help you better provide for your eventual retirement. Last but not least, it can give you a sense of security and help you sleep better at night, especially after a rough council meeting.

An employment agreement can provide many advantages to a manager. In general, an employment agreement can:

1. Shore up a manager's position because all involved parties will better understand what is expected     from the manager and what is expected of the employing governing body.

2.  Allow both parties to exit an uncomfortable employment relationship more gracefully while minimizing potential fall out, hard feelings, and possibly litigation.

3.  Allow the manager to have additional fringe benefits not available to other employees generally.

4. Stabilize planning functions because a contract help reinforce the feeling that the manager will be around for a while.

5.  Help the governing body see the manager as a professional and therefore entitled to the same types of benefits commonly given to managers in the private sector.

6.  Assist the manager to better prepare for retirement.

7.  Focus the attention of the manager and governing body on the business of the organization rather than on negotiating or renegotiating salary and benefit issues.

8.  Serve as a stabilizer. It may enhance a manager's sense of security and well being because the consequences of worst case scenarios and capricious actions will be mediated by the terms of the written employment agreement.

An employment agreement can only bring this security if critical concepts are included. The agreement needs to be more extensive than just a letter of understanding which may only specify the standard salary and benefits, and perhaps a nominal severance provision.

An important element of any employment agreement is the term of employment. Will the term be for an indefinite period of time or a set number of years? Many feel that the best contracts are for a given period of time which require that the manager be given several months notice before termination. State laws and case history vary greatly in this area. The peculiarities of the state in which you accept employment should be researched before assuming that a fixed term is permissible.

The following is a quick checklist to use to make sure you have included the "basics" in your contract.

Have I included provisions in my employment agreement covering:

Don't be afraid to propose an employment agreement and the terms you would like. Whether you are able to obtain a written employment in favorable terms will depending on a number of factors, including such things as the amount of experience the employer has with employment agreements, the professionalism and sophistication of the decision-making body,  the political climate, the financial climate, the creativity of the parties, the degree of competition for the position, and how open the window (sphere) of bargaining is.  For example, if what you would accept as a minimum is nearly the maximum the employer is willing to grant, your sphere of bargaining will be very limited.

The examples of contract language provided in the following pages have been extracted from copies of actual employment agreements of various local government managers throughout the country. In developing any employment agreement, the local government manager should carefully review the statutes of the state in which they are seeking employment to determine any legal parameters regarding employment agreements, and consult with competent legal counsel. Remember, that when you are negotiating your agreement, that the city attorney will be representing the governing body, although (s)he may try to treat all parties fairly, for obvious reasons.


Sample Contract Language-By Subject Area

A. Introductory Language:

Example 1

This agreement is made and entered into this_____day of___________________, 200 19___, between the CITY of _____________, hereinafter called CITY, and _________________, hereinafter called EMPLOYEE, pursuant to these terms and conditions:

(a) WHEREAS, the CITY wishes to employ the services of ________________ as City Manager of the City of _______________; and

(b) WHEREAS, the CITY and EMPLOYEE desire to provide for certain procedures, benefits and requirements regarding the employment of Employee by the City; and

(c) WHEREAS, EMPLOYEE wishes to accept employment as City (County) Manager (Administrator) of said City under the terms and conditions recited herein.

NOW, THEREFORE, CITY and EMPLOYEE agree to the following:

Example 2

THIS AGREEMENT, made and entered into this ______ day of_____________,20____, by and between the [City, County] of __________, State of____________, a municipal corporation, hereinafter called "Employer," as party of the first part, and _________________[name], hereinafter called "Employee," as party of the second part, both of whom understand and agree as follows:

WITNESSETH:

WHEREAS, Employer desires to employ the services of said _________________ [name] as _________________ of the [City, County] of _______________, as provided by ___________________ [here recite appropriate charter, statute or ordinance sections]; and

WHEREAS, it is the desire of the Governing Board, hereinafter called "Council," to provide certain benefits, establish certain conditions of employment and to set working conditions of said Employee; and

WHEREAS, it is the desire of the Council to (1) secure and retain the services of Employee and to provide inducement for him to remain in such employment, (2) to make possible full work productivity by assuring Employee's morale and peace of mind with respect to future security, (3) to act as a deterrent against malfeasance or dishonest for personal gain on the part of Employee, and (4) to provide a just means for terminating Employee's services at such time as he may be unable fully to discharge his duties due to age or disability or when Employer may otherwise desire to terminate his employ; and

WHEREAS, Employee desires to accept employment as the ______________________ of said [City, County];

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree as follows:

B. Term

Example 1--Definite term

Term: (a) Nothing in this agreement shall prevent, limit or otherwise interfere with the right of the council to terminate the services of Employee at any time, subject only to the provisions set forth in Section ___ paragraph ___ of this agreement.

(b) Nothing in this agreement shall prevent, limit or otherwise interfere with the right of the Employee to resign at any time from his/her position with Employer, subject only to the provision set forth in Section ___, paragraph ___, of this agreement.

(c) The term "employed" shall not be construed to include occasional teaching, writing, consulting or military reserve service performed on employee's time off.

(d) Employee shall be retained as City Manager of the City of ________________ for a two (2) year period (longer is desired and possible), commencing with the date of execution of this agreement.

(e) In the event written notice is not given by either party to this agreement to the other _______________ (minimum of 90 days is recommended) prior to the termination date as hereinabove provided, this agreement shall be extended on the same terms and conditions as herein provided, all for an additional period of two years. Said agreement shall continue thereafter for two-year periods unless either party hereto gives notice to the other party that the party does not wish to extend this agreement for an additional two year term.

Example 2--Definite Term

Terms of Employment: (a) Employee shall be retained as City Manager of the City of ________________ for a three (3) year period, commencing with the date of execution of this agreement.

(b) Two (2) years after the execution of this agreement, the City and Employee shall re-negotiate the terms of this agreement. In the event that mutually agreeable terms cannot be reached by Employee and City, then this agreement shall terminate within three (3) years of execution hereof.

Example 4--(Indefinite term)

Terms of Employment: (a) Employee's term of employment shall be indefinite, as prescribed by current (state, local) law subject to the conditions contained herein.

(b) Nothing in this agreement shall prevent, limit, or otherwise interfere with the right of the City Council to terminate the services of Employee at any time, subject only to the provisions set forth in Section ___, paragraph ___ of this agreement (section on termination)

(c) Nothing in this agreement shall prevent, limit, or otherwise interfere with the right of the City Council to terminate the services of Employee at any time, subject only to the provisions set forth in Section ___, paragraph ___ of this agreement (termination section).

B. Duties and Hours of Work

Example 1--general duty clause and compensatory time provision

Duties: Employer hereby agrees to employ said __________________ (name) as _________________ to perform the functions and duties specified in said ____________________(legal reference) of the (City, County) Charter and by said __________________(legal reference) of said (City, County) Code, and to perform other legally permissible and proper duties and functions as the council shall from time to time assign.

Hours of Work: It is recognized that the Employee must devote a great deal of time outside the normal office hours to business of the Employer, and to that end Employee will be allowed to take reasonable compensatory time off as he/she shall deem appropriate during said office hours.

Example 2-Combines terms, duties, comp. time,

Duties: Employer hereby agrees to employ said employee as city administrator (or manager) for an indefinite period to perform the functions and duties specified in the City Code, and to perform other legally permissible and proper duties and functions as the mayor (or council) shall assign.

Hours: It is recognized that Employee must devote a great deal of time outside the normal office hours to business of the Employer, and to that end, Employee will be allowed to take reasonable compensatory time off during said normal office hours, provided notice is left with the city clerk.

Example 3--40+ hour week, publicly listed phone, home office

Hours of Work: The minimum work week of the City Manager shall be forty (40) hours plus any additional work time reasonably required to discharge the duties and responsibilities of the office of City Manager. It is further recognized that as part of the job as City Manager, the Manager is required to maintain a publicly listed telephone within his home and maintain an office at home capable of handling reasonable off-hour business matters from members of the City Council and the public, relevant to the management affairs of the City.

Example 4--Detailed List of Duties and Responsibilities

Duties and Responsibilities: The duties and responsibilities of the City Manager shall be in accordance with _______________(state law), all ordinances and resolutions of the City of ________________, and such policies as shall be adopted from time to time by the City Council. The duties and responsibilities of the manager shall include but not necessarily be limited to , the following list:

(a) Be the chief administrative officer of the City and be responsible to the City Council for proper administration of all affairs of the City.

(b) Attend all meetings of the City Council at which his\her attendance may be required by the governing body.

(c) Appoint and remove at any time all department heads, officers and employees of the City, except members of the City Council. Appointment power shall be subject to any Civil Service Law, rule or regulation as well as any employment agreements.

(d) Recommend for adoption by the City Council such measures as he may deem necessary or expedient.

(e) See that all laws, ordinances and policies of the City Council are faithfully executed, subject to the authority which the City Council may grant the mayor to maintain law and order in times of emergency.

(f) Prepare and submit to the City Council such reports as may be required by that body or as he may deem it advisable to submit.

(g) Keep the City Council fully advised of the financial conditions of the City and its future needs.

(h) Prepare and submit a preliminary or proposed budget; to work with the Budget Committee in its analysis and review; and, to be responsible for its administration upon adoption.

(i) Keep public and council informed through periodic reports to Council on City operations.

Example 5--Duty Hours--manager on call 24 hours a day, have city provided vehicle stocked with emergency supplies and equipment, maintain home phone

____________________ (name of manager) is considered to be on duty twenty-four (24) hours per day for all-outs, off hour meetings, inspections and emergencies under his responsibilities as City Manager and (list other functional titles, e.g. Emergency Services Director. The vehicle assigned to ________________ (name of manager) shall be equipped with adequate emergency equipment to perform such duties. On-duty time shall begin daily when he enters his City vehicle for City purposes and will end when the vehicle is parked in its standby location at the end of the work day. Employee agrees to maintain a home telephone to facilitate such twenty-four (24) hour on-call duties.

Example 1--Employee not Eligible for Compensatory Time

Exempt Status: It is agreed and understood that Employee is exempt from the overtime provisions of the Fair Labor Standards Act, and is not eligible for overtime or compensatory time off for any hours worked beyond a normal work period.

C. Compensation

Example 1--Salary Review with Other Non-union Employees

Salary: (a) Employer agrees to pay Employee for services rendered pursuant hereto an annual base salary of $____________, payable through the payroll system at the same time as other employees of the Employer are paid generally.

(b) In addition, Employer agrees to increase said base salary and/or other benefits of Employee in such amounts and to such extent as the Council may determine that it is desirable to do so on the basis of an annual salary review of said Employee made at the same time as similar consideration is given other management employees generally.

Example 2--Yearly Salary Review

Compensation: The annual compensation of Employee shall be $___________________. Upon each anniversary of employment, the City Council shall review Employee's performance to determine annual salary increases.

Example 3--Six Month Salary Review and COLAs

Salary: (a) The City Manager's beginning salary shall be $________ per month. Under the terms of this agreement, the Manager's salary shall remain at $__________ per month for six months at which time the council shall review the City Manager's performance and may at the Council's discretion increase the City Manager's salary by two and one half to five percent (or whatever range is negotiable). After the initial six month period the City Manager shall be entitled to annual step increases of two and one half to five percent (or other range) based on the City Council's performance evaluation.

(b) The City Manager shall also receive any cost of living adjustments received by the Administrative Management employees of the City during the period of this agreement.

D. Fringe Benefits

i) Insurance

Example 1--General statement

Health and Welfare: Employer agrees to provide the Employee with, and pay for, insurance policies for life, accident, health, medical, etc. on the same basis and in the same amounts as the Employer provides said health and welfare benefits to other employees.

Example 2--Specified life insurance amount, income protection insurance, comprehensive general liabilities and errors and omissions coverage

Insurance Coverage: (a) City shall provide full Major-medical insurance for Employee and dependents as provided for other city employees.

(b) City shall provide Employee with life insurance in the amount of $________________.

(c) City shall provide Employee with income protection insurance providing employee with compensation equal to 50% of annual salary at the time of debilitating accident or sickness.

(d) City shall furnish and provide Employee with insurance protection including comprehensive general liability and errors and omissions coverage applicable to all acts or omissions of Employee arising out of his/her employment. Policy limits of said insurance shall not be less than $________________.

Example 3--Life insurance beneficiaries 1/2 to specified dependent, 1/2 to City; medical insurance; travel insurance, yearly physical examination

Disability, Health and Life Insurance: (a) Employer agrees to put into force and to make required premium payments for Employee for insurance policies for life, accident, sickness, disability income benefits, major medical with full dependent coverage.

(b) Employer agrees to purchase and to pay the required premiums on whole life insurance policies equal in amount to _____ times the annual gross salary of the Employee, with the beneficiary named by the Employee to receive one-half of any benefits paid, Employer the other one-half.

(c) Employer agrees to provide hospitalization, surgical and comprehensive medical insurance for Employee and his dependents and to pay the premiums thereon equal to that which is provided all other employees of Employer or, in the event no such plan exists, to provide same for Employee.

(d) Employer shall provide travel insurance for Employee while he is traveling on Employer's business, with Employee to name beneficiary thereof.

(e) Employee agrees to submit once per calendar year to a complete physical examination by a qualified physician selected by employer, the cost of which shall be paid by the Employer. Employer shall receive a copy of all medical reports related to said examination.

ii) Leaves

Example 1--15 days of vacation at one year, 20 days of sick leave to start, compensation for stored sick and vacation days at termination

Vacation and Sick Leave: (a) Employee shall be provided with _______ (__) (recommend 15 minimum) working days of vacation leave after his first anniversary date, and at each anniversary date thereafter shall earn an additional vacation day per year not to exceed ten (10) such additional days.

(b) Employee shall be credited with ______ (__) (recommend 20 days minimum) working days of sick leave and shall earn additional sick leave at the rate of one (1) working day for each month of service, accumulated to a maximum of one hundred thirty days.

(c) Upon termination, whether voluntary or involuntary, City shall compensate Employee for all accrued vacation leave and twenty five (25%) percent of accrued sick leave. Said compensation shall be based upon Employee's salary as the date of employment termination.

Example 2--X number of vacation and sick days given first day of work; Military reserve leave

Vacation, Sick and Military Leave: (a) As an inducement to Employee for him to become __________________ (job title), at signature hereof, Employee shall be credited with ______ days (number of days granted other employees in one year is recommended) of vacation leave and ______ (number of days granted other employees in one year is recommended) of sick leave at the beginning of employment. Thereafter, Employee shall accrue, and have credited to his personal account, vacation and sick leave at the same rate as other general employees of employer.

(b) Employee shall be entitled to military reserve leave time pursuant to state law and (City, County) policy.

iii) Retirement

Example 1--General Statement

Retirement: Employer agrees to pay the Employer's contribution for the Public Employees Retirement System. Employer likewise agrees to pay Employee's share of any required employee contribution.

Example 2--Employer contribution to ICMA-RC and ownership to succeeding employers; deferred compensation

Retirement: Employer agrees to execute all necessary agreements provided by the International City Management Association-Retirement Corporation (ICMA-RC) for Employer's (Continued) participation in said ICMA-RC retirement plan, or in another approved retirement plan of the employee's choice and, in addition to the base salary paid by the Employer to Employee, Employer agrees to pay an amount equal to ______ percent of Employee's base salary into the ICMA-RC or other approved plan on Employee's behalf, in equal proportionate amounts each pay period, and to transfer ownership to succeeding employers upon Employee's resignation or discharge (may be in addition to or in lieu of contribution to state or city retirement fund).

Deferred Compensation: City shall execute the necessary agreement allowing Employee to enroll in a deferred compensation plan selected by agreement of City and Employee. City agrees to contribute an amount equal to ________% of Employee's annual salary into said deferred compensation plan annually.

iv) Vehicle

Example 1--Automobile (exclusive unrestricted use)

Automobile: Employee's duties require that he/she shall have the exclusive unrestricted use at all times during his/her employment with Employer of an automobile provided to him/her by the Employer. Employer shall be responsible for paying for liability, property damage and comprehensive insurance and for the purchase, operation, maintenance, repair and regular replacement of said automobile. Employee shall be obligated to reimburse City for any personal use of said automobile.

Example 2--Manager to reimburse City for out-of-town personal travel at City's mileage reimbursement rate, City not liable for personal use of vehicle, City Manager needs insurance

Automobile: The City Manager is required to have a car available for City business. The City shall supply an appropriate City vehicle, which shall be used for City business; Provided, that such vehicle may be used for limited personal use, and provided further that the City Manager shall reimburse the City for all out-of-town personal travel at the City's standard mileage reimbursement rate. The City shall not be liable for any personal use of such vehicle and the City Manager shall obtain the legally required insurance coverage.

Example 3--Car can't be older than five years

Automobile: The Employer agrees to provide Employee with exclusive and unrestricted use of a city vehicle which shall be no older than five (5) years. The Employer shall be responsible for the insurance, operation, maintenance and expense of said automobile.

Example 4--Travel allowance, employee responsible for insurance

Travel Allowance: Employee shall be reimbursed the sum of _____________ hundred dollars ($ ) per month for the use of Employee's vehicle for official use. Employee shall be responsible for the insurance operation, maintenance, and expense of said vehicle.

v) General Expenses

Example 1-Manager's general Expenses paid out of petty cash are not to exceed X amount

General Expenses: Employer recognizes that certain expenses of a non personal and generally job-affiliated nature are incurred by Employee, and hereby agrees to reimburse or to pay said general expenses, up to an amount not to exceed $_________ per month, and the Finance Director is hereby authorized to disburse such monies upon receipt of duly executed expense or petty cash vouchers, receipts, statements or personal affidavits.

E. Residency and Relocation

Example 1--Manager must live within City limits within X months

Residency: Employee agrees to obtain residency within the ________________ City limits within ____months of the effective date of this agreement, and to continue residency during the term of this agreement.

Example 2--Employer responsible for moving expenses and expenses associated with selling employee's current residence

Moving expenses: Employee shall be reimbursed, or Employer may pay directly, for the expenses of packing and moving himself, his family and his personal property from ________________ to (City, County) with said payment or reimbursement not to exceed the sum of $_________ , which shall include unpacking, any storage costs necessary and insurance charges.

Home Sale and Purchase expenses: (a) Employee shall be reimbursed for the direct costs associated with the sale of his/her existing personal residence, said reimbursement being limited to real estate agent's fees, and other closing costs that are directly associated with the sale of the house. Said reimbursement shall not exceed the sum of $________.

Example 3--City pays travel and moving expenses, Manager must obtain at least two bids

Travel and Moving Expenses: the City shall pay the City Manager the amount of the travel and moving expenses incurred in moving his immediate family and their personal possessions from ___________________ to __________________, provided that the City Manager shall first have obtained two bids for such moving expenses and submitted the low bid to the City for approval.

F. Professional Development & Memberships

Example 1--Generalized statement of professional development costs to be paid by city

Business Expenses: City shall reimburse Employee for all employment-related expenses, including, but not limited to, meals, civic club membership and subscriptions.

Conferences, Training and Education: (a) Employee shall be reimbursed for all membership dues and the cost of attending national, state and local association conferences.

(b) City shall budget and pay for the cost of registration, travel and subsistence costs relating to training programs which serve to continue the professional educational development of Employee.

Example 2--City will pay for travel and expenses for ICMA and other professional organizations, courses and institutes, and civic club memberships that help city and manager

Professional Development: (a) Employer hereby agrees to budget for and to pay the reasonable travel and expenses of Employee for professional and official travel, meetings and occasions adequate to continue the professional development of the Employee and to adequately pursue necessary official and other functions for Employer, including but not limited to the Annual Conference of the International City Management Association, the state league of municipalities, and other national, regional, state and local governmental groups and committees thereof which the employee serves as a member.

(b) Employer also agrees to budget and to pay for the reasonable travel and expenses of Employee for short courses, institutes and seminars that are necessary and desirable for his professional development and for the good of the Employer.

Dues and Subscriptions: Employer agrees to budget and to pay for the professional dues and subscriptions of Employee necessary for his continuation and full participation in national, regional, state and local associations and organizations necessary and desirable for his/her continued professional participation, growth and advancement, and for the good of the Employer.

Civic Club Membership: Employer recognizes the desirability of representation in an before local civic and other organizations, and employee is authorized to become a member of _______________ such civic clubs or organizations, for which Employer shall pay all expenses, including meals. Employee shall report to the Employer on each membership that he has taken out at Employer's expense.

Example 4--City will pay for ICMA, state association and conference attendance; will pay for other professional development as travel budget allows

Professional Development: As a part of Employee's compensation, and for the Employee's continued professional growth and development and for the good of the Employer, Employer agrees to budget and pay for the costs or participating in national, state and local associations. At a minimum, said participation shall include, is so desired by Employee, membership in the International City Management Association, ____________ State City Management Association, and attendance at the annual conferences thereof. Within the constraints of the adopted travel budget, Employee may also attend other professional development workshops as Employee deems necessary.

G. Indemnification and Bonding

Example 1--General Statement

Indemnification: Employer shall defend, save harmless and indemnify Employee against any tort, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of Employee's duties as ___________________. Employer will compromise and settle any such claim or suit and pay the amount of any settlement or judgment rendered thereon.

Bonding: Employer shall bear the full cost of any fidelity or other bonds required of the Employee under any law or ordinance.

Example 2--Employer will defend employee against lawsuits associated with position, be responsible for costs, bear full cost of bonds

Indemnification and Bonding: Employer shall defend, hold harmless and indemnify Employee against any tort, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of Employee's duties. Employee shall be covered under the City's liability insurance policies for covered acts or omissions occurring in the performance of Employee's duties as a city official at no expense to Employee. Employer shall be responsible for all costs, including lost time and wages of Employee, incurred as a result of the defense, prosecution, judgement or settlement of claims and suits, during the term of this agreement of thereafter, arising in connection with the performance of Employee's duties as a City official. Employer shall bear the full cost of a public official bond required of the Employee under any law or ordinance.

H. Suspension and Termination

Example 1--Terms by which employee may be suspended

Suspension: Employer may suspend the Employee with full pay and benefits at any time during the term of this agreement, but only if

(1) a majority of Council and Employee agree, or

(2) after a public hearing, a majority of Council votes to suspend Employee for just cause; Provided, however, that Employee shall have been given written notice setting forth any charges at least ten days prior to such hearing by the council members bringing such charges.

Example 2--Lump sum payment or seven months notice at termination; city owes nothing if terminated because of illegal act; if manager's salary reduced more than other employees he can terminate employment

Termination and Severance: (a) In the event Employee is terminated by the governing body (or mayor in mayor-council cities), and Employee is still willing and able to perform his duties under this Agreement, then in that event, Employer agrees at its option to (1) pay employee a lump sum cash payment equal to four (4) months aggregate salary, or (2) to provide seven (7) months advance written notice to the employee; Provided however, in the event the Employee is terminated because of his/her conviction of any illegal act involving personal gain to him/her, or for wilfull failure to perform his duties, he/she being under no disability then in that event, Employer shall have no obligation to pay the aggregate severance sum designated in this Paragraph, or give said notice.

(b) In the event Employer at any time during the term of this Agreement reduces the salary or other financial benefits of Employee in a greater percentage than an applicable across-the-board reduction for all employees of Employer, or in the event other benefits are denied as agreed to herein, then in that event, Employee may, at his option, be deemed to be "terminated" at the date of such reduction.

Example 3--Lump sum payment; employee can terminate if employer fails to comply with terms of employment; employee to give X months advanced notice

Termination and Severance Pay: (a) In the event Employee is terminated by the Council before expiration of the aforesaid term of employment and during such time that Employee is willing and able to perform his duties under this agreement, then in that event Employer agrees to pay Employee a lump sum cash payment equal to __________ months' (minimum of six months is recommended) aggregate salary; provided, however in the event Employee is terminated because of his conviction of any illegal act involving personal gain to him, then, in that event, Employer shall have no obligation to pay the aggregate severance sum designated in this paragraph.

(b) In the event Employer at any time during the term of this agreement reduces the salary or other financial benefits of Employee in a greater percentage than an applicable across-the -board reduction for all employees of Employer, or in the event Employer refuses, following written notice, to comply with any other provision benefiting Employee herein, or the Employee resigns following a suggestion, whether formal or informal, by the council that he resign, then, in that even, Employee may, at his option, be deemed to be "terminated" at the date of such reduction or such refusal to comply within the meaning and context of the herein severance pay provision.

(c) In the Event Employee voluntarily resigns his position with Employer before expiration of the aforesaid term of his employment, then Employee shall give Employer _____ months (two to three months is average) notice in advance, unless the parties otherwise agree.

Example 4--If city terminates must give notice by certified mail and must pay out remainder of contract; If employee terminates, not entitled to termination pay

Termination by City: The City may terminate the employment of Employee by directing written notice of termination to Employee by certified or registered mail, return receipt requested. In the event of such termination while employee is ready, willing and able to perform the duties of City Manager, the City shall pay employee a sum equal to the number of working days remaining in accordance with the provisions of Section ___ of this agreement (insert section referring to term)

Termination by Employee: Employee may terminate his employment with City by certified or registered mail, return receipt requested. In the event of such termination, Employee shall not be entitled to receive the termination pay provided for in Section __ of this agreement (refer to section on termination by number).

Severance pay: Employee shall receive, upon termination, severance pay equal to one months base salary for each year, or portion thereof, employee has been employed.

Example 5--City terminates, has to pay one years salary or salary until manager finds employment; if convicted of illegal action city has no obligation

Termination Conditions and Pay: (a) In the event Employee is terminated by the City Council, either by receipt and acknowledgement of written notice and concurrently while employee is willing and able to perform the duties of City Manager, in such event, the City agrees to compensate Employee payment equal to 365 days salary, provided, however, that the Employee has not secured employment. In the event Employee obtains employment within the 365 day period, then termination pay will cease upon employment.

(b) In the event the Employee is not willing to perform the duties of City Manager upon receiving written notice of termination, the City is discharged of any responsibility with respect to termination pay.

(c) In the event Employee is terminated because of his/her conviction of any felonious act, then, in that event, the City shall have no obligation to pay the stipulated termination pay.

Example 6--Detailed lists of causes for termination; Employee needs to give 2 months notice; The shorter notice given by the city the more severance pay

Termination for Cause: This Agreement may be terminated immediately in the sole discretion of the City upon the occurrence of any one of the following events:

(a) Employee willfully and continuously fails or refuses to comply with the policies, standards and regulations of the City as are from time to time established;

(b) Employee shall be found guilty of fraud, dishonest, misappropriation of funds, embezzlement, or other act of misconduct in the rendering of services on behalf of the City;

(c) Employee fails or refuses to perform faithfully or diligently any of the provisions of this Agreement.

In the event Employee is involuntarily terminated by the City Council before expiration of the term of employment and during such time as the Employee is willing and able to perform the assigned duties, then in that event the City agrees to pay Employee a lump sum equal to two (2) months' pay at the Employee's highest rate of pay during his term of City employment. However, if Employee is convicted of any illegal act involving personal gain to him, then the City shall have no obligation to pay the severance pay.

If the City reduces the salary or other financial benefits of Employee, or if the City refuses following written notice requesting compliance with any other provision benefitting Employee herein, or if Employee resigns following public suggestion, whether formal or informal, by the mayor or two or more City Council members that he resign, then the Employee may, at his option, deem the reduction to be a refusal to comply with the meaning and context of this Agreement, and the severance pay provision of this agreement shall apply. In the event of termination or resignation, Employee shall be entitled to a lump sum payment equivalent to all accrued vacation and sick leave benefits as are paid to other separating employees generally.

If Employee voluntarily resigns his/her position with the City before expiration of said term of employment, then Employee shall give the City at least forty-five (45) days' notice in advance. Expiration of the Agreement term due to non-renewal by City shall entitle Employee to all severance provisions as provided for involuntary termination under pursuant to the terms of this Agreement.

Example 7--Termination because of disability

Disability: If Employee is permanently disabled or is otherwise unable to perform his duties because of sickness, accident, injury, mental incapacity or health for a period of four successive weeks beyond any accrued sick leave, for twenty working days over a thirty working day period, Employer shall have the option to terminate this agreement, subject to the severance pay requirements of Section ___, paragraph ___. However, Employee shall be compensated for any accrued sick leave, vacation, holidays, compensatory time and other accrued benefits.

Example 8--City has to pay salary plus 30% (benefits) for remainder of term

Termination: Nothing in this agreement shall prevent limit or otherwise interfere with the right of the City or the Employee to terminate employment relationship created hereunder at any time. Should the City choose to terminate Employee's employment, prior to the end of said term, Employer agrees to pay Employee, upon separation, the value of the remaining term (or percentage of remaining term) of the agreement plus _______ percent (__%) for benefits, and payment for any remaining vacation or other accrued leave time for which other general employees of the Employer are paid upon separation.

Example 9--

Involuntary Termination: The Council reserves the right to terminate this Agreement and the services of ____________________ as City Manager, in accordance with _______________. The parties, however, agree that such termination shall occur on the basis of a 12 month notice of termination (that is, Employee's services shall be terminated 12 months from receipt by ________________ of written notice of termination) and three months severance pay. Pay during the 12 month notification period shall include all benefits, including vacation an sick leave accrual. The 3 months severance pay shall include all benefits except vacation and sick leave accrual. Payment shall be made for all accrued vacation as of the actual date of termination. The City Council reserves the right to shorten the notification of termination period, provided a contract termination penalty shall be paid. The contract termination penalty shall be in the amount of one-half (or other percentage) month pay times the number of months by which the 12 month termination period is diminished. Contract termination penalty pay shall include all benefits except vacation and sick leave accrual. Should Employee voluntarily terminate his employment during the 12 month notification period, the provision relative to contract termination penalty shall be null and void and Employee shall be solely entitled to pay as to the last day worked, plus severance pay as previously described.

Voluntary Termination: In the event Employee elects to voluntarily resign or retire, he/she shall give the City not less than ninety (90) days advance written notice. Failure to give such notice, shall result in forfeiture of all accrued vacation benefits.

Performance Evaluation

Example 1--An annual performance review at budget time, criteria developed jointly, annual goal setting with mayor and administrator

Performance evaluation: (a) The mayor (or council) shall review and evaluate the performance of the Employee at least once annually in advance of the adoption of the annual operating budget. Said review and evaluation shall be in accordance with criteria developed jointly by the mayor and administrator.

(b) Annually the mayor and administrator shall define goals and performance objectives which they determine necessary for the proper operation of the city, and in the attainment of the council's policy objectives and shall further establish a relative priority among those various objectives.

Example 2--Council to give manager a written evaluation on criteria decided on jointly, manager will have opportunity to discuss evaluation with council, Goals should be obtainable within year

Performance evaluation: (a) The governing body (or mayor) shall review and evaluate the performance of the Employee at least once annually in advance of the adoption of the annual operating budget. Said review and evaluation shall be in accordance with criteria developed jointly by the mayor and administrator. Said criteria may be added to or deleted from as the Council may from time to time determine, in consultation with the Employee. Further, the _____________________ (chief elected officer) shall provide the Employee with a summary written statement of the findings of the Council and provide an adequate opportunity for the Employee to discuss the evaluation with the Council.

(b) Annually, the Council and Employee shall define such goals and performance objectives which they determine necessary for the proper operation of the (City, County) and in the attainment of the council's goals and shall further establish a relative priority among them. The goals so established for the manager shall generally be attainable within the time limitations as specified and the annual operating and capital budgets and appropriations provided.

(c) In effecting the provisions of this Section, the Council and Employee mutually agree to abide by the provisions of applicable statutes, ordinances, resolutions and adopted policies.

Outside activities/additional employment

Example 1--Outside activities should not require more than 10 hours per week

Outside Activities: Employee shall not spend more than 10 hours per week in teaching, counseling or other non-Employer connected business without prior approval of the Council.

Other Terms and Conditions of Employment

Example 1--Terms and conditions can change if the manager is consulted; manager has same benefits as other employees unless stated otherwise; vacation/sick leave benefits same as for department heads;

Other Terms and Conditions of Employment: (a) The Council, in consultation with the manager, shall fix any such other terms and conditions of employment, as it may determine from time to time relating to the performance of Employee, provided such terms and conditions are not inconsistent with or in conflict with the provisions of this agreement, the [City, County] charter or any other law.

(b) All provisions of the [City, County] Charter and/or Code, and regulations and rules of the Employer relating to vacation and sick leave, retirement and pension system contributions, holiday and other fringe benefits and working conditions as they now exist or hereafter may be amended, also shall apply to Employee as they would to other employees of Employer, in addition to said benefits enumerated specifically for the benefit of Employee except as herein provided.

(c) Employee shall be entitled to receive the same vacation and sick leave benefits as are accorded department heads, including provisions governing accrual and payment therefore on termination of employment.

Notices:

Example 1:--States where notices about the agreement are to be sent

Notices: Notices pursuant to this agreement shall be given by deposit in the custody of the United States Postal Service, postage prepaid, addressed as follows:

(1) Employer: [Title and address of relevant official(mayor, clerk, etc.)]

(2) Employee:[name and address of Employee]

Alternatively, notices required pursuant to this agreement may be personally served in the same manner as is applicable to civil judicial practice. Notice shall be deemed given as of the date of personal service or as of the date of deposit of such written notice in the course of transmission in the United States Postal Service.

General Provisions:

(a) The text herein shall constitute the entire agreement between the parties.

(b) This Agreement shall be binding upon and inure to the benefit of the heirs at law and executors of Employee.

(c) If any provision, or any portion thereof, contained in this Agreement is held unlawful, invalid or unenforceable, the remainder of this Agreement, or portion thereof, shall be deemed severable, shall not be affected and shall remain in full force and effect. The parties agree to immediately renegotiate any part or provision in this agreement rendered or declared invalid.

(d) This Agreement shall become effective commencing_________________, 20____.

IN WITNESS WHEREOF, The City Council of the City of _________________ has caused this Agreement to be signed and executed in its behalf by its Mayor, and duly attested by its City Clerk, and the Employee has signed and executed this Agreement the day and year above written.

EMPLOYER:                                     EMPLOYEE:

_____________________________     __________________________

Mayor

APPROVED AS TO FORM:

____________________________

City Attorney

Copyright (C) 2000 LGI. All Rights Reserved. This material is for educational purposes only, and is not intended to provide legal advice or assistance. 

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