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For the term of this Agreement, the salary for Assistant City Manager shall be set equal to the Police Chief. For Lieutenant, classification maximums shall be as provided in the SLMO salary schedule addendum. The addendum shall reflect Lieutenant rate which is set at twenty-five percent (25%) above Sergeant rate of pay. For Captain, classification maximums shall be as provided in the salary schedule addendum which is set at fifteen percent (15%) above Lieutenant rate of pay. Section 12.0 Employee Defense and Indemnity In the event that all or part of a claim or judgment is for punitive or exemplary damages in any action otherwise governed by Section 825 of the Government Code and upon request of the employee against whom such claim or judgment is rendered, the City agrees to consider whether the findings set forth in Section- $25(b) (1) through (3) may be made. This provision in no way obligates the City to pay punitive or exemplary damages unless it in fact makes those findings. Section 13.0 Layoff The appointing authority may lay off an employee in the competitive service because of material change in duties or organization or shortage of work or funds. If, by reason of expiration of a leave of absence, reduction in personnel, demotion to the class, or other cause; there are more employees in any class in the full-time competitive service than there are available positions in that class, the employee last employed in the class shall be laid off; if such employee obtained such position by promotion, he/she shall be demoted to the lower class from which he/she was promoted rather than be laid off. Layoff or demotion shall be based upon the amount of seniority an employee has in the classification he/she is occupying (i.e., the employee with the least amount of seniority in the class 'shall be the first to be laid off or demoted, if job was obtained by promotion). Forty days before the effective date of a layoff, the appointing authority and/or designee shall notify the Human Resources Director of the intended action with reasons therefore, and a statement certifying whether or not the services of the employee have been satisfactory. A copy of such notice shall be given to the employee affected at that time. If certified as having given satisfactory service, the name of the employee laid off shall be placed on the appropriate re-employment list. Employees shall be given 30 days notice before the effective date of layoff. All laid off employees shall be placed on a re-employment list for the class from which they were laid off or demoted (i.e., the last person in the affected class to be laid off shall be the first re-hired when openings occur in that class or any other of the same pay for which the employee is qualified). If the employee on the re-employment list refuses the initial offer of re-employment, the employee's name shall be placed at the end of the re-employment list. If the same employee refuses proffered re-employment the second time, the employee shall be removed from the list and shall no longer be eligible for re-employment as a laid off employee. Employees on the re-employment list shall be offered positions for which they qualify before new employees are hired. Re-employment lists shall remain in effect for a period of one year. All employees on the re- employment list shall be mailed notices of vacancies in the City for a period of one year after their lay off. SLMO draft to council 8