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Transition Year Employment Agr TRANSITION YEAR EMPLOYMENT AGREEMENT This Transition Year Employment Agreement ("Agreement") is entered into this 3(tlaay of January, 2005, by and between the City of Salina, Kansas ("Employer") and Dennis M. Kissinger ("Employee"). Recitals A. Employer has employed Employee as City Manager since 1988 pursuant to an Employment Agreement dated January 10, 1988; an Amendment dated December 19, 1994; a Second Amendment dated August 18, 1998; and a Third Amendment dated August 12,2002 (collectively, the "Current Employment Agreement"). B. Employee has advised Employer's governing body (the "City Commission") of his intention to retire as City Manager in December of2005 in order to allow for a well-planned transition in the city manager's position over the course of 2005. C. The City Commission wishes to (1) initiate the process of carefully conducting an executive search for a professional city manager to replace Employee due to his retirement; (2) have maximum flexibility in the timing of engagement of a new city manager; and (3) avoid adversely impacting Employee's retirement schedule and benefits. D. Employer and Employee wish to replace the Current Employment Agreement with this Agreement as the full restatement of the employment relationship in order to best address the interests of the citizens of Salina, the Employer, the Employee, and prospective city manager candidates throughout this very important period of administrative transition for the City of Salina. The Parties, therefore, agree as follows: Section 1. Duties. Employee shall continue to perform the duties of city manager as prescribed by Kansas law, City ordinances, or lawful direction ofthe City Commission; or assigned duties as Senior Management Consultant under the circumstances described in Section 3 of this Agreement. Section 2. Term. A. This Agreement shall be effective as of January 1, 2005 and shall remain in effect through December 15,2005, unless modified by mutual consent of the parties. B. Regular separation from employment for Employee's retirement purposes is scheduled for December 15,2005. Employee's last scheduled duty day is November 30, 2005, with vacation leave to be taken for the remaining work days through December 15,2005. Section 3. Possible Change in Employee's Title and Duties During Term. A. Employer and Employee recognize that in 2005 Employer will be conducting an executive search for a professional city manager to replace Employee due to his planned retirement. Employer and Employee also recognize that the City Commission's ability to hire the most qualified applicant may depend upon its ability to bring the incoming city manager into City of Salina employment prior to the Employee's scheduled retirement date and the ending date of this Agreement. B. If a new city manager is appointed and reports for duty on a date (the "Transition Date") prior to November 30, 2005, the Employee is willing to be reassigned as of the Transition Date to a position as Senior Management Advisor to report to and be supervised by the incoming city manager in the performance of executive and management duties as assigned for part or all of the balance of the term of this Agreement. Consequently, upon the basis of consultation between the incoming city manager and the City Commission, the assumption of duties by a new city manager prior to November 30,2005 will result in one of the following scenarios. Commencing with the Transition Date, the Employee will: (1) Be reassigned as Senior Management Advisor for the balance of the term of this Agreement; or (2) Be reassigned as Senior Management Advisor for a definite or indefinite period of time less than the balance of the term of this Agreement and will, upon completing the assignment as Senior Management Advisor, qualify for the early separation pay and benefits set forth below for the balance ofthe term of this Agreement; or (3) Be advised by Employer no less than thirty days prior to the Transition Date that Employee's services as Senior Management Advisor will not be necessary and will, from and after the Transition Date, qualify for the early separation pay and benefits set forth below for the balance of the term of this Agreement. C. No change in compensation, benefits or other provision of this Agreement shall occur with a reassignment to a Senior Management Advisor position. Section 4. Early Separation and Severance Pay. A. In keeping with the underlying tenets of the city manager form oflocal government, at any time during the term of this Agreement the City Commission may terminate the services of the Employee when deemed to be in the City's best interest. Such early separation shall be implemented by the City Commission initiating an early 2 separation personnel action and providing Employee a minimum thirty days advance written notice ofthe separation decision. B. If Employer initiates early separation of Employee, Employer agrees to pay Employee a lump sum cash equal to the base salary Employee would have earned through the ending date of this Agreement. C. If Employee is terminated because of his conviction of any illegal act involving personal gain to him, Employer shall have no obligation to pay the severance sum designated in this section. D. If Employee voluntarily resigns his position, that resignation shall not constitute early separation under this section, and Employer shall have no obligation to pay the severance sum designated in this section. If Employee is to voluntarily resign, Employee shall give Employer a minimum 30-day notice in advance, unless the parties otherwise agree. Section 5. Salary. Employer agrees to pay Employee for services rendered pursuant to this Agreement an annualized base salary of$105,960 in accordance with Resolution Number 04-6110, approved on August 16, 2004, adopting the City of Salina Position Classification and Salary Schedule. Section 6. Automobile Allowance. Employee shall receive an allowance of$500 per month for business use of his vehicle. For business trips outside the City, Employee shall receive additional compensation for each mile driven pursuant to the City mileage reimbursement policy. Section 7. Vacation and Sick Leave. A. Employee shall accrue and have credited to his personal account, paid vacation leave of twenty (20) days per year. Accrued but unused vacation shall be paid in accordance with the City's Personnel Manual. B. Employee shall accrue sick leave at the same rate as other employees of the Employer. Upon regular separation, in accordance with the Personnel Manual, Employee shall receive payment for one-third of his accumulated sick leave hours. In the event of early separation initiated by the City Commission under Section 3 or 4 ofthis agreement, Employee shall receive payment for two-thirds of his accumulated sick leave hours. 3 Section 8. Life and Health Insurance. A. Life Insurance. Employer agrees to provide the City's group term life insurance policy to Employee upon the same basis as all other employees of the Employer. B. Health Insurance. During the period of employment, Employer agrees to provide the City's group medical, dental and prescription drug benefit plan (the "Plan") to Employee and his dependents and to pay the Employer portion of the premium for the Plan in the same manner as other employees. Following retirement, in accordance with K.S.A. 12-5040, Employee shall be eligible to continue participation in the Plan by paying full monthly premiums in the same manner as other retired employees of the Employer. In the event of early separation under Section 3 or 4 ofthis agreement, Employee shall be considered a retirant under K.S.A. 12-5040 and shall be eligible for continued participation in the Plan. In consideration of Employee's willingness to provide consulting services on ongoing projects and programs, during any period between early separation and the ending date ofthis agreement, Employer will waive all premiums or payments for Employee and his dependants' coverage. During regular retirement Employee shall pay all premiums as outlined above. Section 9. Retirement. A. ICMA Retirement Corporation. Employer has adopted the ICMA Retirement Corporation (ICMA-RC) Section 457 deferred compensation program and allows Employee to participate fully in the program. In addition to Employee's base salary, Employer shall provide a contribution to Employee's ICMA-RC Section 457 account in an amount which annualized shall equal $8,477. In the event of early separation initiated under Section 3 or 4 of this agreement, payment of the remaining amount due through December 2005 shall be made by the Employer during the last month of employment. Completion of this Section 457 retirement contribution shall not be considered a part of severance pay. B. KPERS. Employer participates in the Kansas Public Employee's Retirement System. Employer agrees to pay on behalf of Employee all KPERS determined costs at the 1.75% benefit level, for purchases under the "modified double deduction" method of Employee's eligible prior out-of-state service. Upon retirement or other separation from City service, any KPERS required payments for remaining out-of- state service credit shall be the responsibility of Employee. Section 10. Development and Travel. A. Employer agrees to payment for professional dues of Employee necessary for his continued participation in national and state professional city management associations for the good of Employee and Employer. 4 B. Employer agrees to payment for travel expenses in accordance with City policy for Employee official travel and meeting attendance to assure continual professional development for the good of the Employer and Employee, and to adequately pursue necessary official business and functions for the Employer. Out-of-state travel shall be limited to the spring National League of Cities Congressional Conference and the fall International City-County Management Conference, unless otherwise authorized by the City Commission. Section 11. General Expenses. Employer recognizes that certain expenses of a non-personal and generally job- affiliated nature are incurred by Employee, and agrees to reimburse or to pay such general expenses. The Finance Director shall disburse such monies upon receipt of duly executed expense or petty cash vouchers, receipts, statements or personal affidavits. Section 12. Civic Club Membership. Employer recognizes the desirability of representation in local civic organizations. Employee is authorized membership in one such civic organization for which Employer shall pay all expenses. Section 13. Other Terms and Conditions of Employment. A. The City Commission in consultation with the Employee, may fix such other terms and conditions of employment, including performance, goals and assignments, as it determines appropriate, provided such terms and conditions are not inconsistent with or in conflict with the provisions of this agreement, the City Code or any other law. B. All provisions of the City Code, policies and regulations of the City of Salina relating to vacation and sick leave, retirement and pension system contributions, holidays and other employee 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 the Employer, in addition to the benefits enumerated herein; provided, however, in the event of a conflict between those provisions and the express provisions of this Agreement, the terms of this Agreement shall prevail. Section 14. Replacement of Current Employment Agreement. This Agreement shall fully replace the Current Employment Agreement as of the January 1, 2005 effective date of this Agreement. Section 15. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the heirs, beneficiaries, and personal representatives of the Employee. 5 Executed the day and year first above written. By: LINA, KANSAS ~ ATTEST: ~07 Lieu Ann Elsey, City Clerk DENNIS M. KISSINGER AL 6