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3.7. SR 02-21-2006 City of Elk River REQUEST FOR COUNCIL ACTION Agenda Section Meeting Date Consent Februa 21,2006 Item Description A rove Em 10 ment A reement for Ci Administrator Administrator Introduction The Council previously approved terms of the city administrator's employment and directed Dayle Nolan, the city's personnel attorney, to draft the Employment Agreement for future Council approval. Discussion Councilmember Morin has reviewed the Agreement, made minor changes, and is in agreement with the language as presented. Financial Impact Attachments Employment Agreement Action Requested Approve Employment Agreement as attached. Council Action Motion by _ Second by _ Vote Follow Up C: \Documents and Settings \ tallard\Local Settings \ Temporary Internet Files \ OLKF\ CA Contract.doc EMPLOYMENT AGREEMENT THIS AGREEMENT, made and entered into this day of ,2006, by and between the City of Elk River, Minnesota, a municipal corporation (hereinafter the "CITY") and Lori Johnson, (hereinafter "EMPLOYEE"). WITNESSETH: WHEREAS, the CITY is a municipal corporation in the State of Minnesota; and WHEREAS, the EMPLOYEE has accepted the City Administration position with the CITY, is appointed for an indefinite term by the City Council of the CITY and is subject to removal from the position by a four-fifths (4/5) vote of the City Council with 90 days written notice; and WHEREAS, the EMPLOYEE will be classified as a supervisory employee pursuant to Minn. Stat. 179A.03,subd.17;and WHEREAS, the CITY desires to employ EMPLOYEE as City Administrator, and to secure and retain her services, and to encourage effective, professional and efficient execution of their respective responsibilities by assuring EMPLOYEE'S morale, security, and independence, and to deter nonfeasance, malfeasance, and dishonesty in said position, and to require and secure for the CITY the full and undivided efforts ofthe EMPLOYEE, and to provide a just and reasonable provision for the termination of EMPLOYEE'S services at such future time as either party may desire; and WHEREAS, the EMPLOYEE agrees to serve the CITY on the terms and subject to the benefits, inducements, and conditions herein set forth and agreed to by the parties, which have been negotiated and agreed to by the parties for their mutual benefit; NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and agreements set forth herein, the EMPLOYER and the EMPLOYEE agree as follows: SECTION 1- RECITALS The parties adopt and acknowledge the recitals hereinabove as part of this Agreement. SECTION 2 - DUTIES Subject to the provisions for removal as provided in this Agreement, the CITY will employ EMPLOYEE as City Administrator to perform the functions, duties and powers of said position as established under Minnesota law and under the ordinances ofthe CITY. EMPLOYEE will faithfully and diligently perform all ofthe duties, responsibilities and powers so vested, delegated, or assigned, and shall obey all laws of the United States and of the State of Minnesota and all ordinances of the CITY. EMPLOYEE will not engage in any activities or conduct which are foreseeably likely to bring dishonor or disrepute to his position or to the CITY. 1 SECTION 3 - TERMS OF EMPLOYMENT EMPLOYEE will serve "at will" as City Administrator for the CITY for an indefinite term, in accordance with the City Ordinances. EMPLOYEE may resign from her position as City Administrator at any time, and give forty five (45) calendar days advance written notice to the City Council, unless otherwise agreed to by the EMPLOYEE and the CITY. SECTION 4 - TERMINATION PAY UPON TERMINATION In the event EMPLOYEE is terminated because of her conviction for an illegal act involving personal gain to EMPLOYEE, or is immediately terminated for any violation ofthe terms in the Personnel Policy, then the CITY shall have no obligation to pay the termination benefits. In the event that EMPLOYEE is terminated by the CITY, the CITY agrees to pay EMPLOYEE a cash payment equal to six (6) months aggregate salary at her then current salary, total unpaid accrued vacation leave, and one-third (1/3) unused accrued sick leave. Payment of the six (6) months salary is conditioned upon EMPLOYEE signing a release of claims. If the CITY at any time during the employment term reduces the salary or other financial benefits of EMPLOYEE in a greater percentage than across-the-board reduction for all employees, or if the CITY refuses, following written notice, to comply with any other provisions of this Agreement benefiting EMPLOYEE, or EMPLOYEE resigns following a formal suggestion by a majority ofthe City Council that she resign, then EMPLOYEE may, at her option, be deemed to be terminated on the effective date of EMPLOYEE'S resignation and the EMPLOYEE shall be entitled to receive the termination benefits set forth above. If EMPLOYEE voluntarily resigns her position with the CITY, there shall be no termination pay. Upon discharge or resignation for any reason, EMPLOYEE shall be entitled to payment in the amount of the EMPLOYEE'S total accumulated annual leave and any other benefit provided to resigning employees under the Personnel Policy. Any payments due under this section may be paid either in a lump sum payment or in equal bi-weekly installments for a period of not more than six months until paid in full at the EMPLOYEE'S discretion. Payment will be made or begin at the first payday for city employees that occurs at least 18 days after EMPLOYEE signs the Release Agreement if she has not rescinded it. SECTION 5 - COMPENSATION The CITY will pay EMPLOYEE for her services in accordance with the terms and conditions outlined in the CITY'S Pay Plan. The CITY shall pay EMPLOYEE for her services as City Administrator an annual gross salary of$95,698.32. On January 1, 2006, the EMPLOYEE shall receive the cost ofliving increase applied to the Pay Plan. On July 1, 2006, EMPLOYEE shall move 2 to Step E of the Pay Plan. Thereafter the EMPLOYEE shall be paid in accordance with the CITY'S Pay Plan and receive all increases applied to the Pay Plan. The CITY shall contribute $400 per month to the EMPLOYEE'S deferred compensation account currently provided by the CITY. SECTION 6 - GOVERNMENTAL AND PROFESSIONAL ASSOCIATIONS At the discretion of the City Council, the CITY will pay the dues and subscription fees of EMPLOYEE for such national, regional, state and local governmental, professional, and service associations and organizations, including institutions of higher education, which the City Council determines are reasonably necessary for the EMPLOYEE'S professional participation, certification, advancement, improvement and growth, and which will benefit her service to the CITY. SECTION 7 - PROFESSIONAL DEVELOPMENT AND TRAVEL The CITY will payor reimburse EMPLOYEE for her reasonable time and subsistence expenses in attending meetings and events at which EMPLOYEE represents the CITY, or which are reasonably necessary or desirable for EMPLOYEE'S professional development, or which are reasonably required by EMPLOYEE'S membership in an organization, association or committee for which the CITY pays the membership dues. The CITY will payor reimburse the reasonable travel and subsistence expenses of EMPLOYEE for attendance at short courses, institutes and seminars relating to municipal government, finance, and management which are reasonably necessary for EMPLOYEE'S professional development and which will benefit her service to the CITY. EMPLOYEE will not attend any such course, institute or seminar out-of-state if an equivalent or comparable course, institute or seminar is offered in Minnesota. The EMPLOYEE shall be reimbursed for all expenses in accordance with the CITY'S Travel Policy. In lieu of a car allowance, EMPLOYEE shall be reimbursed for mileage incurred under this section or for general city business in accordance with the CITY'S Travel Policy. SECTION 8 - LIFE, HEALTH, AND DENTAL INSURANCE BENEFITS The CITY shall provide Life, Health, and Dental insurance benefits in the same manner as for other non- union employees. SECTION 9 - HOLIDAYS, ANNUAL LEAVE, PERSONAL LEAVE, and COMPENSATORY TIME The CITY shall provide EMPLOYEE the annual leave benefits as provided in the CITY'S Personnel Policy. At voluntary termination, EMPLOYEE shall be paid leave benefits as provided under the CITY'S Personnel Policy. 3 The EMPLOYEE'S existing personal leave balance accrued as of the date this contract is entered into may be used until December 31, 2010, at which time any unused balance will be forfeited. Personal leave shall not be paid in cash to EMPLOYEE under any circumstance. The CITY understands that the duties of the City Administrator require a great deal of time outside normal business hours, and for that reason the EMPLOYEE make take reasonable compensatory time off during normal business hours, so long as the taking of such compensatory time does not unduly interfere with performance of her duties. SECTION 10 - OTHER TERMS OF EMPLOYMENT The CITY will defend and indemnify EMPLOYEE to the extent required by Minn. Stat. 466.07. The CITY shall defend, indemnify, and hold harmless EMPLOYEE against any and all civil claims, demands, suits, actions, or proceedings of any kind or nature arising out of performance by EMPLOYEE of her official duties and responsibilities as City Administrator. This indemnification shall not apply to any criminal proceedings which may be filed against the EMPLOYEE. If EMPLOYEE determines on or before December 31,2007, that she does not want to continue to serve as City Administrator, she shall be allowed to return to the Finance and Administrative Services Director or equivalent position. In that event, this contract would cease, and the pay and benefits would revert to those applicable to the Director position. SECTION 11 - GENERAL PROVISIONS Whenever in this Agreement reference is made to any action of the City Council, such reference shall mean collective action in an official meeting. The CITY will make reasonable appropriations or will budget reasonable amounts, in accordance with the law and with the CITY ordinances, for all benefits, payments and reimbursements to which EMPLOYEE is entitled under this Agreement. This Agreement shall be governed by and shall be construed in accordance with the laws ofthe State of Minnesota and the ordinances of the CITY. The terms and conditions of this Agreement shall be considered to be in effect from and after the 17th day of October, 2005, unless otherwise terminated or modified in accordance with the provisions set forth in this Agreement. ENTIRE AGREEMENT. This is the entire agreement between the parties regarding the subj ect matter herein. Except as provided above, it supersedes all prior agreements and understandings between the parties relating to the employment of EMPLOYEE and the termination of such employment. This Agreement may not be changed or terminated orally. No modification, termination, or attempted waiver of any of the provisions of this Agreement shall be valid unless in writing signed by the party against 4 whom enforcement is sought. HEADINGS. The headings contained herein are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement. NO WAIVER. The waiver by any party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach. If any section, provision, condition or term ofthis Agreement, or application thereofto any circumstance, shall be held to be invalid or unenforceable for any reason by any court of competent jurisdiction, the remaining portions or applications hereof as can be given effect without the invalid or unenforceable provision or application shall remain in full force and effect, and to this end the provisions of this Agreement are declared to be severable. IN WITNESS WHEREOF, the CITY and EMPLOYEE have approved and executed this Agreement on this day of, 2006. CITY EMPLOYEE By: Stephanie Klinzing, Mayor Lori Johnson, City Administrator And: Joan Schmidt, City Clerk 1054381.2 5