SOUTH PORTLAND — The City Council on Monday unanimously approved a three-year contract with the city manager and adopted an incentives-based wellness program for nonunion employees.

The three-year contract, effective through Nov. 14, 2013, increases City Manager Jim Gailey’s annual salary to nearly $110,000 a year plus benefits.

His prior contract paid nearly $100,000.

In approving the contract, councilors offered nothing but praise for Gailey, who began managing the city during a turbulent period that culminated with the resignation of former City Manager Ted Jankowksi.

Mayor Tom Coward, who was not on the council when Gailey was hired, said Gailey was “relatively untried” in the city manager’s position and that the council took a “leap of faith” in hiring him.

“(Gailey) has entirely validated our faith in him,” Coward said. “This contract is a recognition of Mr. Gailey’s sterling service to the city.”

Councilor Rosemarie De Angelis noted that other than cost-of-living increases, Gailey has not received a raise during his three years at the city’s helm.

“I really thank Jim for being willing to work under those conditions,” De Angelis said.

In addition to the pay raise, there were several other changes to Gailey’s contract.

The council decided to provide the city manager with a cell phone and home computer equipment, rather than simply paying for cell phone and Internet service. The manager’s monthly automobile allowance was also increased to $600 from $500.

The council also added language that details the manager’s hours of work, noting the job “in some ways … represents a 24-hour commitment, day in and day out.”

Other changes include the amount of money the city would have to pay to terminate the manager’s contract without cause.

While the previous contract required the city to pay the manager the equivalent of two months’ salary, the new pact increases that responsibility to six months. It also requires the manager to give the mayor 45-day notice of resignation, up from the previous 30-day requirement.

Councilor Linda Boudreau said she didn’t believe the city took a “leap of faith” when it hired Gailey, who previously served as interim city manager and worked since high school in many of different city departments, from parks to planning.

“He certainly deserves the salary we have given him tonight,” she said.

The council also approved a new wellness program for nonunion employees.

The program offers financial incentives for employees who exercise regularly and attend health seminars.

The program was presented in detail by the city’s Wellness Committee at a workshop last week.

Committee members said that an employee could earn an additional $285 a year by participating in all facets of the plan, which includes $100 for a personal health profile, $100 for completing exercises programs and $25 for monthly blood pressure check-ups.

Gailey said the program will initially be offered to nonunion employees in January, since union employees would have to accept the program through collective bargaining.

Starting the program is expected to cost the city $20,000, which will come from health-care cost savings.

Based on similar programs in Lewiston and Freeport, Gailey said he expects the city will eventually experience savings in health insurance and worker’s compensation costs.

Councilor Patti Smith said she was thrilled with the program, since it came from the employees themselves.

“It came from the bottom up,” she said. “You’re more likely to go out for a walk at lunch if your (colleagues) encourage you.”

Randy Billings can be reached at 781-3661 ext. 100 or [email protected]

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