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HomeMy WebLinkAbout09(A) - Resolution Approving the City Manager's Employment Agreement and Salary Report ITEM: 9A CITY COUNCIL AGENDA REPORT MEETING DATE: December 09, 2025 PREPARED BY: Lori Olson, Assistant City Manager PRESENTED BY: Council Member Kim Churchill Council Member Victor Lake AGENDA ITEM: Resolution Approving the City Manager's Employment Agreement and Salary BACKGROUND: Tonight the City Council held a closed session to conduct the City Manager’s annual performance evaluation for 2026 and to review the City Manager’s employment agreement and salary. Jason Wedel was appointed as City Manager of Prior Lake on October 14, 2019. The City Manager is an at-will employee appointed by the City Council. The terms of employment for the City Manager are set forth in an employment agreement, which is reviewed and approved annually by the City Council in conjunction with the City Manager’s performance evaluation. This year’s evaluation process consisted of a written assessment by each Council Member based upon the City’s core competencies:  Prioritizes customer service  Communicates effectively  Applies strategic and critical thinking  Ensures operational excellence  Manages effectively A written self-assessment using the same criteria was submitted to the City Council by the City Manager in advance of the evaluation. The specific contents of the performance evaluation are considered private under M.S.13.43 of the Minnesota Data Practices Act. On October 2, 2025, the City Manager Evaluation Committee, comprised of Council Members Churchill and Lake, met to consider a change to the City Manager’s compensation structure. This summer, staff conducted a compensation study of thirteen comparable cities with populations between 25,000-40,000 and the City of Shakopee. All but one comparable city use a step system based upon years of service to determine City Manager compensation. As such, staff recommended to the Evaluation Committee that the City Manager be moved to a step system and compensated at a level commensurate with his years of service. The Evaluation Committee agreed and made this recommendation to the City Council during this evening’s closed session. The primary goal of the closed session and performance evaluation is to determine whether the City Manager is performing his responsibilities to the Council’s satisfaction. Any changes to the employment agreement, including a salary recommendation, will be considered during this time. At the regular Council meeting, a brief overview of the evaluation will be provided along with terms of the employment agreement, including the salary recommendation, for Council approval. City of Prior Lake | 4646 Dakota Street SE | Prior Lake MN 55372 Item 9A Page | 2 FINANCIAL IMPACT: The 2026 budget includes adequate funding to administer the terms of the employment agreement. ALTERNATIVES: 1. Motion and second to approve the City Manager's Employment Agreement and 2026 salary. 2. Take no action and direct that the matter be deferred to a future City Council Meeting. ATTACHMENTS: 1. 2026 EMPLOYMENT AGREEMENT WEDEL 2. City Manager Employment Agreement RESOLUTION_12.9.25 EMPLOYMENT AGREEMENT THIS AGREEMENT is made and entered into this December 9, 2025 between the CITY OF PRIOR LAKE, a political subdivision of the State of Minnesota (“City”) and Jason Wedel (“Manager”). IN CONSIDERATION of the terms and conditions contained herein, the parties agree as follows: 1. Employment. During the term of this Agreement, the Manager shall serve as City Manager of the City and shall assume and perform, in a conscientious and diligent manner at all times, all of the duties and responsibilities incidental to such a position as defined herein and as are reasonably assigned to him from time to time by the City Council. Manager shall use his best efforts in the performance of his duties and shall spend substantially his full time in connection therewith except in the event of illness, disability, vacation or other absence permitted by the City. Manager shall also observe the highest standards of professional and ethical conduct in the performance of his duties and in all matters that bear upon the City’s reputation and/or the City’s and public’s trust in the Manager. Manager shall work such hours as are reasonably assigned to him by the City Council from time to time. 2. Term. This Agreement shall be effective as of January 1, 2026 through TBD except as herein specified and shall continue unless or until terminated as provided in Section 6 below or until such time as the Manager voluntarily terminates employment by thirty (30) days written notice. Manager shall remain in the exclusive employment of the City during the term of this Agreement. For the purposes of this section, “exclusive employment” shall exclude teaching, writing, consulting, speaking or military reserve service undertaken by Manager during his non-work hours. 3. Compensation. As compensation for services rendered the Manager shall receive the following: 3.1. Base Salary Rate: The Manager’s base salary shall be paid in equal installments at the same time as the City pays its City employees, subject to applicable taxes, and shall be commensurate with years of service based upon the 2026 pay scale: 1 2 3 4 5 6 7 8 9 $172,326 $177,841 $183,532 $189,405 $195,466 $201,720 $208,175 $214,837 $221,712  TBD of the City Manager Pay Scale effective January 1, 2026 through December 31, 2026 32. The City Manager shall move to the next step of the pay scale on January 1 of each year as determined by the City Council upon completion of a satisfactory annual performance evaluation. 3.3 An annual Cost of Living Adjustment (COLA) at the same rate for all non-union employees shall be applied to the City Manager pay scale (3.1) effective January 1 or each year. 4. Benefits. Manager shall receive the following benefits at no cost to him: (a) Vacation. The Manager’s paid vacation accrual shall be 25 days (in addition to the paid public holidays as provided for other City department heads) and shall include an initial ten (10) day bank. Carryover of unused vacation time from one (1) contract year to another shall be consistent with city personnel Wedel Employment Agreement - 1 policies, except that if the Manager has a paid vacation balance in excess of 1.5 times the Manager’s annual accrual (the “maximum balance”) at the end of a contract year, the City will pay out up to two weeks (80 hours) of such accrued vacation in excess of the maximum balance on the first paycheck of the next contract year. Any accrual exceeding the maximum balance, plus the up to two weeks of st excess accrual mentioned above, will be considered lost on December 31 of each year, and the City will not pay out lost accrual. (b) Earned Sick and Safe Time (ESST). ESST accrual and leave in accordance with City policy for department heads. (c) Insurance. Medical, dental and Retirement Health Savings Plan contributions equivalent to those contributions made for other department head level City employees. (d) Life Insurance. The City shall provide life insurance consistent with city personnel policies. (e) Retirement Plan Contribution. The City shall contribute a portion of the Manager’s base salary to the Public Employees Retirement Association of Minnesota (“PERA”) in an amount mandated by PERA for the coordinated plan. (f) Car Allowance. $500.00 car allowance per month. (g) Professional Development. Dues and fees for the following, provided that such items are reasonably necessary to the professional development of the Manager and subject to City Council approval in the budget process or otherwise:  Licenses, journals, publications;  Seminars, conferences and short courses within the State of Minnesota and one seminar/conference per year outside the State of Minnesota;  Membership in professional associations and service organizations. (h) Reimbursement of Expenses. Reimbursement of reasonable and necessary meals, travel (except for travel using Manager’s vehicle), lodging, and entertainment expenses, properly document and actually incurred by Manager in connection with the affairs of the City or in connection with the professional development described in paragraph 4(g) above. (i) Relocation Expenses: The City agrees to reimburse the Manager should the Manager decide to relocate to within the City limits of Prior Lake within twelve (12) months of hire up to a maximum amount of ten thousand ($10,000) dollars. Reimbursement will take place upon receipt of verification of moving costs In the event that the employee resigns within the first year of employment, the Manager shall reimburse the City 100% of the amount paid herein. In the event the Manager resigns within the second year of employment, the Manager shall reimburse the City 50% of the amount paid herein. Applicable employment taxes will be applied to this benefit. (j) Other. Manager shall also be eligible for any other benefit plans or programs available to department Wedel Employment Agreement - 2 heads now or in the future. 5. Performance Evaluation. The City Council will conduct an annual performance evaluation and salary review. The City Manager Evaluation Committee, comprised of two Council Members, will meet prior to the performance evaluation to formulate salary and other related recommendations for consideration during a closed session of the City Council (Minn. Stat. 13D.05, Subd. 3, provision a.) The City Council at its discretion may conduct more frequent evaluations. 6. Termination of Employment. Manager is an at-will employee of the City. As such, he may be terminated by the City Council in its sole discretion at any time, with or without cause. Upon termination of Manager’s employment and subject to the severance provisions of Section 7 below, all rights and obligations under this Agreement shall cease at that time, other than those which have accrued prior thereto. This Agreement shall terminate immediately upon death of the Manager; fraud, theft, gross negligence or gross misconduct of Manager of his duties (including any unprofessional or unethical off- duty conduct that bears upon the City’s and public’s trust in the Manager); the intentional or grossly negligent conduct of the Manger, whether or not related to the performance of his duties, which conduct is injurious to the City or its reputation, monetarily or otherwise; or conviction of a felony or a gross misdemeanor. 7. Severance 7.1. Termination by the City. In the event his Agreement is terminated by the City in accordance with Section 6 above, unless termination is due to Manager’s conviction or charges of a felony or a gross misdemeanor, or due to fraud, theft, gross negligence or gross misconduct of Manager (including any unprofessional or unethical off-duty conduct that bears upon the City’s and public’s trust in the Manager), or the intentional or grossly negligent conduct of the Manger, whether or not related to the performance of his duties, which conduct is injurious to the City or its reputation, monetarily or otherwise, the City shall provide Manager with a minimum of thirty (30) days advance written notice and severance pay as set out in subparagraph (a) below. If such termination is due to Manager’s conviction or charges of a felony or gross misdemeanor, or due to fraud, theft, gross negligence or gross misconduct of Manager (including any unprofessional or unethical off-duty conduct that bears upon the City’s and public’s trust in the Manager), or the intentional or grossly negligent conduct of the Manger, whether or not related to the performance of his duties, which conduct is injurious to the City or its reputation, monetarily or otherwise, Manager shall forfeit any right to advance written notice or severance pay. (a) Payment. 1. Compensation. The City shall continue to pay Manager an amount equivalent to his then existing compensation as set out in Section 3 herein, subject to all applicable taxes and deductions, for six (6) months following the effective date of Manager’s termination. 2. Benefits. During the period set forth in paragraph 7(a) above, the City will continue to make the City paid contribution toward payment of Manager’s medical, dental and retirement health savings as set out in paragraph 4(c) herein. Wedel Employment Agreement - 3 3. Vacation and sick pay. Upon notice of voluntary or involuntary termination of employment, all accrued vacation shall extend to the final date of employment as determined by the Finance Director and be paid accordingly. No additional accrual shall occur during this time period. All eligible vacation and sick leave balances shall be paid in accordance with the City’s Personnel Policy. 8. Legality. The parties covenant and agree that the provisions contained herein are reasonable and are not known or believed to be in violation of any federal or state law or regulation. In the event a court of competent jurisdiction finds any provision contained herein to be illegal or unenforceable, such a court may modify such provision to make it valid and enforceable. Such modification shall not affect the remainder of this Agreement which shall continue at all times to be valid and enforceable. No payment may be made under this Agreement in excess of the maximum amount permitted by applicable law. 9. Interpretation. This Agreement constitutes the entire agreement between the parties and supersedes any prior oral or written agreements between the parties. The Agreement can only be modified in writing and signed by both parties. This Agreement shall be interpreted in accordance with the laws of the State of Minnesota. 10. Assignment. The rights and obligations of the City to the Manager in this Agreement may not be transferred or assigned by the Manager. 11. Arbitration. All claims and disputes arising under or relating to this Agreement or Manager’s employment with the City are to be settled by binding, confidential arbitration with the American Arbitration Association (“AAA”), in accordance with AAA Employment Arbitration Rules then in effect. A copy of the Employment Rules can be found at https://www.adr.org/Rules or requested through the City. The City will pay the fees and costs of arbitration as provided in the Employment Rules; however, if the Manager initiates the arbitration, then the Manager will contribute an amount equal to the current filing fee that would apply to the Manager’s claim if brought in state court where the Manager resides. This fee must be paid by the Manager within 30 days of the demand for arbitration. Failure to pay the applicable fee within this time period may result in dismissal of the demand for arbitration. Any decision or award as a result of any arbitration proceeding shall be in writing and shall provide an explanation for all conclusions of law and fact. This Arbitration provision does not apply to any claims that as a matter of controlling law cannot be subject to arbitration IN WITNESS WHEREOF, the parties have caused the execution of this Agreement the day and year first above written. CITY OF PRIOR LAKE By: Kirt Briggs, Mayor / Date Wedel Employment Agreement - 4 Jason Wedel / Date Wedel Employment Agreement - 5 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 25- RESOLUTION APPROVING THE CITY MANAGER'S EMPLOYMENT AGREEMENT AND SALARY Motion By: Second By: WHEREAS, the City Manager and the City Council on behalf of the City of Prior Lake entered into an employment agreement commencing on October 14, 2019; and WHEREAS, the City Council conducted the City Manager’s performance evaluation on December 9, 2025 for the year 2025; and WHEREAS, the performance evaluation was deemed satisfactory and warrants a continuation of the employment agreement as amended for years 2026 through TBD; and WHEREAS, the City Manager’s compensation structure shall move to step system based upon a compensation analysis for comparable cities and similar to the pay structure for all City of Prior Lake non-union employees; and WHEREAS, the City Manager’s salary will be adjusted per the terms of the employment agreement effective January 1, 2026. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The City Manager’s base salary shall be step TBD ($TBD) effective January 1, 2025 through December 31, 2026, based upon years of service in accordance with the City Manager nine (9) step pay scale. 3. All other terms and conditions of the employment agreement for 2026 through TBD are hereby approved effective January 1, 2026. th Passed and adopted by the Prior Lake City Council this 9 day of December 2025. VOTE Briggs Braid Churchill Lake Hellier Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ ______________________________ Lori Olson, Assistant City Manager