CITY MANAGER EMPLOYMENT AGREEMENT
INTRODUCTION
This Agreement, made by and between the City of Bainbridge Island, Washington, a municipal
corporation (“Employer”), and Morgan Smith (“Employee”), an individual who has the
education, training, and experience in local government management to serve as City Manager
and who, as a member of the International City/County Management Association (“ICMA”), is
subject to the ICMA Code of Ethics, both agree as follows:
Section 1: Term
This Agreement shall remain in full force and effect from October 8, 2018, until December 31,
2020, unless terminated by Employer or Employee as provided in Sections 9, 10, or 11 of this
Agreement.
Section 2: Duties and Authority
A.
Employer agrees to employ Morgan Smith as City Manager to perform the functions and
duties specified in Title 35A of the Revised Code of Washington and to perform other legally
permissible and proper duties and functions without interference.
B.
Employee is the chief executive officer of Employer and shall faithfully perform the
duties as prescribed in the job description as set forth in Employer’s ordinances and as may be
lawfully assigned by Employer, and shall comply with all lawful governing body directives, state
and federal law, and Employer policies, rules, and ordinances as they exist or may hereafter be
amended.
C.
Specifically, it shall be the duty of Employee to employ on behalf of Employer all other
employees of the organization consistent with the policies of the governing body and the
ordinances of Employer.
D.
It shall also be the duty of Employee to direct, assign, reassign, and evaluate all of
Employees of Employer consistent with policies, ordinances, and state and federal law.
E.
It shall also be the duty of Employee to organize, reorganize, and arrange the staff of
Employer, and to develop and establish internal regulations, rules, and procedures which
Employee deems necessary for the efficient and effective operation of Employer consistent with
lawful directives, policies, ordinances, and state and federal law.
F.
It shall also be the duty of Employee to accept all resignations of employees of Employer
consistent with policies, ordinances, and state and federal law, except Employee’s resignation,
which must be accepted by the City Council.
G.
Employee shall perform the duties of City Manager of Employer with reasonable care,
diligence, skill, and expertise.

Page 1 of 10

 H.
All duties assigned to Employee by the governing body shall be appropriate to and
consistent with the professional role and responsibility of Employee.
I.
Employee cannot be reassigned from the position of City Manager to another position
without Employee’s express written consent, except as noted in Section 10B.
J.
Employee or designee shall attend, and shall be permitted to attend, all meetings of the
governing body, both public and closed, with the exception of those closed meetings devoted to
the subject of this Agreement, any amendment thereto, Employee’s evaluation, or otherwise
consistent with state law.
K.
The governing body, individually and collectively, shall refer in a timely manner all
substantive criticisms, complaints, and suggestions called to their attention to Employee for
study and appropriate action.
Section 3: Compensation
A.
Base Salary: Employer agrees to pay Employee an annual base salary of $174,000,
payable in installments at the same time that the other management employees of Employer are
paid.
B.
Employer agrees to increase the base salary paid to Employee to $184,000 upon this
Agreement being in effect for six (6) months, upon a determination by the City Council that the
Employee has successfully performed the functions of the City Manager position. The
performance evaluation process will, as a general matter, follow the process described in Section
12, as applicable.
C.
Beginning on January 1, 2020, this Agreement shall be automatically amended to reflect
any salary adjustments that are provided or required by Employer’s compensation policies to
include all salary adjustments on the same basis as applied to the other management employees.
Section 4: Health, Disability, and Life Insurance Benefits
A.
Employee shall participate in the City’s health benefit (medical, dental, vision, employee
assistance) plans in accordance with the terms then applicable to other non-represented
employees of the City. Such terms change from time to time, and shall not be more generous
than the terms applicable to other non-represented employees. For example, in 2018, the
Employer will provide 95% of the medical plan premium for the Employee’s coverage, and 85%
of the premium for medical coverage for a spouse/domestic partner or other dependents.
B.
The City shall provide long-term disability insurance for Employee with terms equivalent
to that which applies to City non-represented employees.
C.
The City shall pay one hundred percent (100%) of the premium for term life insurance in
the amount of Three Hundred Thousand Dollars ($300,000). The Employee shall name the

Page 2 of 10

 beneficiary(ies) of said term life insurance.
Section 5: Vacation, Sick, and Management Leave
A.
Commencing on the effective date of the term of this Agreement, Employee shall accrue
vacation leave at a rate of 13.33 hours per month. Employee is entitled to accrue all unused
vacation leave, up to a maximum of 40 days (320 hours). Upon termination of employment for
any reason, any accrued but unused vacation hours, up to the limit stated in the previous
sentence, shall be paid in a single cash sum.
B.
Commencing on the effective date of the term of this Agreement, Employee shall accrue
sick leave at a rate of 8.0 hours per month. Employee is entitled to accrue all unused sick leave,
up to a maximum accumulation of 130 days (1040 hours). Upon termination of employment for
any reason, any accrued unused sick leave shall be forfeited and shall not be paid in cash.
C.
On January 1 of each year, Employee shall be credited with six days (48 hours) of
management leave, which may not be carried over annually.
D.
Employee shall be entitled to the same bereavement leave as that provided to other nonrepresented employees of the City.
Section 6: Automobile
Employer will provide Employee with an annual automobile allowance of $3,000, prorated for
2018, intended to cover costs including insurance, fuel, maintenance, and repairs. The allowance
will be paid to Employee in equal installments on a monthly basis and will be paid in lieu of
general mileage reimbursement policies.
Section 7: Retirement
A.
Commencing on the effective date of the term of this Agreement, Employee is opting to
no longer contribute to the Public Employee Retirement System of Washington. Employee is
enrolled in an Internal Revenue Code Section 457 plan. Employer agrees to keep in force all
necessary agreements for Employee’s continued participation in such retirement plan.
B.
Commencing on the effective date of the term of this Agreement, in addition to the base
salary paid by Employer to Employee, Employer agrees to pay an amount equal to fifteen
percent (15%) of Employee’s base salary, or the maximum dollar amount permissible under
federal and state law, into the Section 457 plan on Employee’s behalf, in equal proportionate
amounts each pay period. Employer and Employee shall fully disclose to each other the financial
impact of any amendment to the terms of Employee’s retirement benefit.
Section 8: General Business Expenses
A.
Employer agrees to budget and pay for professional dues for Employee’s participation
and membership in the International City Management Association, the Washington City

Page 3 of 10

 Management Association, and such other national, regional, state, and local associations, and
organizations deemed by the governing body as necessary and desirable for Employee’s
continued professional participation, growth, and advancement, and for the good of Employer.
B.
Employer agrees to budget and pay for travel and subsistence expenses of Employee for
professional and official travel, meetings, and occasions to adequately continue the professional
development of Employee and to pursue necessary official functions for Employer, including but
not limited to the ICMA Annual Conference, the WCMA Annual Conference, state league of
municipalities, and such other national, regional, state, and local governmental groups and
committees in which Employee serves as a member.
C.
Employer also agrees to budget and pay for travel and subsistence expenses of Employee
for short courses, institutes, and seminars that are necessary for Employee’s professional
development and for the good of Employer.
D.
Employer recognizes that certain expenses of a non-personal and job related nature may
be incurred by Employee, and agrees to reimburse or to pay such reasonable general expenses.
Such expenses may include meals where Employer business is being discussed or conducted, and
participation in social events of various organizations when representing Employer. Such
expenditures are subject to annual budget constraints of Employer as well as state and Employer
ethics and purchasing policies. The finance director is authorized to disburse such moneys upon
receipt of duly executed expense or petty cash vouchers, receipts, statements, or personal
affidavits.
E.
Employer acknowledges the value of having Employee participate and be directly
involved in local civic clubs or organizations. Accordingly, Employer shall pay for reasonable
membership fees and dues to enable Employee to become an active member in local civic clubs
or organizations.
F.
Recognizing the importance of constant communication and maximum productivity,
Employer shall provide Employee, for business use, a laptop computer, software, a mobile
phone, and tablet computer for business use as required for Employee to perform her duties and
to maintain communication with Employer’s staff and officials as well as other individuals who
do business with Employer. Upon termination of Employee’s employment, the equipment
described in this paragraph shall be returned to Employer.
Section 9: Termination
A.

For the purpose of this Agreement, termination “Without Cause” shall occur when:
1. The majority of the governing body votes to terminate Employee at a properly posted
and duly authorized public meeting.
2. If the Bainbridge Island Municipal Code is amended pertaining to the role, powers,
duties, authority, or responsibilities of Employee’s position, or in a manner that
substantially changes the form of government, Employee shall have the right to
declare that such an amendment constitutes termination.
Page 4 of 10

 3. If Employer reduces the base salary, compensation, or any other financial benefit of
Employee, unless it is applied in no greater percentage than the average reduction of
all department heads, such action shall constitute a breach of this Agreement and will
be regarded as a termination.
4. Following a request by a majority of the governing body that she resign in lieu of
termination, Employee may declare a termination as of the date of the suggestion.
5. Breach of contract is declared by either party with a 30-day cure period for either
Employee or Employer, and such breach is not cured within the 30-day period.
Written notice of a breach of contract shall be provided in accordance with the
provisions of Section 19.
B.
The following reasons shall constitute grounds to terminate this Agreement “With
Cause”:
1. A material breach of this Agreement or the repeated neglect by Employee to perform
the duties Employee is required to perform under this Agreement, either of which
continues after written notice and a 30-day cure period, or which occurs within one
(1) year following a prior written notice and cure opportunity under this Subsection
9.B.1.
2. Conviction of any criminal act relating to employment with the City or otherwise
involving dishonesty, moral turpitude, or physical violence.
3. Conduct, relating to City employment, which while not criminal in nature, violates
reasonable standards of professional and personal conduct in some substantial manner
injurious to the business or reputation of the City.
4. Conviction of any felony offense.
Section 10: Severance
Severance shall be paid to Employee when employment is terminated Without Cause, as
described in Section 9A, prior to the end of the term of this Agreement.
A.
If Employee is terminated before December 31, 2020, the following provisions will
apply:
1. Employer shall provide compensation equal to salary for the remaining term of this
Agreement, through December 31, 2020, at the then current rate of pay as described
in Section 3. This severance shall be paid as a lump sum or in a continuation of salary
on the existing biweekly basis, at Employee’s option.
2. Employer shall provide compensation for all accrued but unused vacation leave.
3. For up to six months following termination, as needed, Employer shall pay the cost to

Page 5 of 10

 continue medical, dental, and vision insurance for Employee and all dependents as
provided in Section 4A, with an option to extend such coverage for a further six (6)
months if Employee is not employed. Employer will make the premium payments on
behalf of Employee.
4. Employer shall provide additional compensation equal to $3,000 per month, to be
prorated from the date of termination until December 31, 2020, to compensate for the
loss of deferred compensation and the loss of other miscellaneous benefits due to the
change in Employee’s employment status. This additional compensation shall be paid
as a lump sum or on a biweekly basis, at Employee’s option.
B.
As an alternative to severance for termination without cause, if Employer and Employee
identify a mutually acceptable role for the Employee other than the position of City Manager,
Employee will agree to perform the duties of that alternative role for the remainder of the term of
this Agreement, through December 31, 2020, and Employer shall provide compensation and
other benefits as described in Section 10A.
C.
Further terms regarding any termination and severance of Employee may be the subject
of a Separation Agreement agreed to by Employer and Employee.
Section 11: Resignation
In the event that Employee voluntarily resigns her position with Employer, Employee shall
provide a minimum of six (6) months’ notice, unless Employer and Employee agree otherwise.
However, in the event that Employee voluntarily resigns her position with Employer due to a
family emergency, Employee shall provide a minimum of sixty (60) days’ notice, unless
Employer and Employee agree otherwise.
Section 12: Performance Evaluation
A.
Employer shall annually review the performance of Employee in September subject to a
process, form, criteria, and format for the evaluation which shall be mutually agreed upon by
Employer and Employee.
The annual evaluation process, at a minimum, shall include the opportunity for both parties to:
(1) conduct a formulary session where the governing body and Employee meet first to discuss
goals and objectives of both the past twelve (12) month performance period as well as the
upcoming twelve (12) month performance period; (2) following that formulary discussion,
prepare a written evaluation of goals and objectives for the past and upcoming year; (3) next
meet and discuss the written evaluation of these goals and objectives; and (4) present a written
summary of the evaluation results to Employee.
The final written evaluation should be completed and delivered to Employee within 30 days of
the initial formulary evaluation meeting.
B.
Unless Employee expressly requests otherwise in writing, the evaluation of Employee
shall at all times be conducted in executive session of the governing body and shall be
Page 6 of 10

 considered confidential to the extent permitted by law. Nothing in this Agreement shall prohibit
Employer or Employee from sharing the content of Employee’s evaluation with their respective
legal counsel.
C.
In the event Employer modifies the evaluation instrument, format or procedure, and such
modification would require new or different performance expectations, then Employee shall be
provided a reasonable period of time to demonstrate such expected performance before being
evaluated.
D.
In the event Employee is an ICMA Credentialed Manager, the multi-rater evaluation tool
will be utilized at a minimum of every five years.
Section 13: Hours of Work
It is recognized that Employee must devote a great deal of time outside the normal office hours
on business for Employer, and to that end Employee shall be allowed to establish an appropriate
work schedule.
The schedule shall be appropriate to the needs of Employer and shall allow Employee to
faithfully perform her assigned duties and responsibilities.
Section 14: Ethical Commitments
Employee will at all times uphold the tenets of the ICMA Code of Ethics, which is hereby
incorporated herein. Specifically, Employee shall not endorse candidates, make financial
contributions, sign or circulate petitions, or participate in fundraising activities for individuals
seeking or holding elected office, nor seek or accept any personal enrichment or profit derived
from confidential information or misuse of public time.
Employer shall support Employee in keeping these commitments by refraining from any order,
direction, or request that would require Employee to violate the ICMA Code of Ethics.
Specifically, neither the governing body nor any individual member of the governing body shall
request Employee to endorse any candidate, make any financial contribution, sign or circulate
any petition, or participate in any fundraising activity for individuals seeking or holding elected
office, or to handle any personnel matter on a basis other than one of fairness, impartiality, and
merit.
Section 15: Outside Activities
The employment provided for by this Agreement shall be Employee’s primary employment.
Recognizing that certain outside consulting or teaching opportunities provide indirect benefits to
Employer and the community, Employee may elect to accept limited teaching, consulting, or
other business opportunities with the understanding that such arrangements must neither
constitute interference with nor a conflict of interest with her responsibilities under this
Agreement.

Page 7 of 10

 Section 16: Indemnification
Without regard to any lesser requirements of federal, state or local law, the City shall defend,
save harmless, and indemnify Employee against any 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 City Manager or resulting from the exercise of
judgment or discretion in connection with the performance of program duties or responsibilities,
unless the act or omission involved willful or wanton misconduct. In such case, Employee may
request, and the City shall not unreasonably refuse to provide, independent legal representation
at City’s expense, and City may not unreasonably withhold approval. Legal representation,
provided by the City for Employee, shall extend until a final determination of the legal action,
including any appeals brought by either party. The City shall indemnify Employee against any
and all losses, damages, judgments, interest, settlements, fines, court costs, and other reasonable
costs and expenses of legal proceedings including reasonable attorneys’ fees, and any other
liabilities incurred by, imposed on, or suffered by Employee in connection with or resulting from
any claim, action, suit, or proceeding, actual or threatened, arising out of or in connection with
the performance of his duties. Any settlement of any claim must be made with prior approval of
the City in order for indemnification, as provided in this section, to be available. Employee
recognizes that the City shall have the right to compromise and settle any claim or suit arising
out of or in connection with the performance of Employee’s duties as City Manager.
Section 17: Bonding
Employer shall bear the full cost of any fidelity or other bonds required of Employee under any
law or ordinance.
Section 18: Other Terms and Conditions of Employment
A.
Employer, only upon Agreement with Employee, 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 Bainbridge Island Municipal Code, other local ordinances, or
any other law.
B.
Except as otherwise provided in this Agreement, Employee shall be entitled, at a
minimum, to the highest level of benefits that are enjoyed by or offered to other non-represented
employees of Employer as provided in the Bainbridge Island Municipal Code, Personnel Rules
and Regulations, or by practice.
Section 19: Notices
Notice pursuant to this Agreement shall be given by depositing in the custody of the United
States Postal Service, postage prepaid, and addressed as follows:

Page 8 of 10

 EMPLOYER:
City of Bainbridge Island
280 Madison Avenue N
Bainbridge Island, WA 98110
EMPLOYEE:
Morgan Smith
Bainbridge Island, WA 98110
Notice shall be deemed given as of the date of personal service or as the date of deposit of such
written notice in the course of transmission in the United States Postal Service.
Section 20: General Provisions
A.

Binding Effect. This Agreement shall be binding on Employer and Employee as well as
their heirs, assigns, executors, personal representatives, and successors in interest.

B.

Precedence. In the event of any conflict between the terms, conditions, and provisions of
this Agreement and the provisions of the City Council’s policies, or Employer’s
ordinances or Employer’s rules and regulations, or any permissive state or federal law,
then, unless otherwise prohibited by law, the terms of this Agreement shall take
precedence over contrary provisions of Council’s policies, or Employer’s ordinances, or
Employer’s rules and regulations or any such permissive law during the term of this
Agreement.

C.

Attorneys’ Fees. In any suit, action, or appeal to enforce this Agreement or any term or
provision of this Agreement, or to interpret this Agreement, the prevailing Party shall be
entitled to recover its costs incurred, including reasonable attorneys’ fees.

D.

Paragraph Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define, or limit the
scope, extent, or intent of this Agreement or any of the provisions of the Agreement.

E.

Provisions Severable. Every provision of this Agreement is intended to be severable. If
any term or provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity of the remainder of the Agreement.

F.

Rights and Remedies. The rights and remedies provided in this Agreement are
cumulative, and the use of any one right or remedy by any party shall not preclude nor
waive its rights to use any or all other remedies. Any rights provided to the parties under
this Agreement are given in addition to any other rights the parties may have by law,
statute, ordinance, or otherwise.

Page 9 of 10

 G.

Entire Agreement. This Agreement contains the entire agreement between the parties
respecting the matters herein set forth and supersedes all prior agreements between the
parties hereto respecting such matters.

H.

Governing Law and Dispute Resolution. This Agreement shall be construed in
accordance with the laws of the State of Washington. Venue for any dispute arising
hereunder shall be in Kitsap County Superior Court. However, before any lawsuit may be
filed by either party, the Employee and Employer must agree to engage in non-binding
mediation, in which the expense of the mediator will be paid by the Employer. Other than
the cost of the mediator, each party shall bear its own expenses and attorney fees in any
dispute, including mediation or litigation, subject to the prevailing party provision in
Subsection 20.C. above.

I.

Preparation of Agreement. No presumption shall exist in favor of or against any party to
this Agreement as a result of the drafting and preparation of this document.

J.

No Waiver. No waiver of any breach by either party of the terms of this Agreement shall
be deemed a waiver of any subsequent breach of the Agreement.

K.

Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

L.

Amendment. No amendment of this Agreement shall be effective unless the amendment
is in writing, signed by each of the parties.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the later of the
signature dates included below.
MORGAN SMITH

CITY OF BAINBRIDGE ISLAND

Date:

Date:

By:

By:

Morgan Smith, Deputy City Manager

Kol Medina, Mayor

Page 10 of 10