BELFAIR WATERDISTRICT

DISTRJ:CT MANAGER

#1

This employment agreement is entered into between Mr. David Tipton (hereinafter referred to as "Mr. Tipton") and the Belfair Water District #1, Belfair, Washington (hereinafter referred to as "the District") to describe the terms and conditions of employment as General Manager of the Belfair WaterDistrict#l. RECITALS

WHEREAS,the District has employed Mr. Tipton continuously since September, 2007 and desires to continue to employ Mr. Tipton as the General Manager; and WHEREAS,the District and Mr. Tipton desire to formalize the September 2007 verbal agreement under which Mr. Tipton has heretofore been employed; and WHEREAS, Mr. Tipton desires to continue as the General Manager of the District; and WHEREAS,the parties jointly desire to enter into this Employment Agreement to memorialize the terms and conditions of Mr. Tipton's employment with the District. AGREEMENT

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NOW, THEREFORE,in consideration of the mutual benefits to be derived the parties agree as follows:

Section 1. Appointment and Effective Date.
Mr. Tipton was appointed Manager of the District for an indefinite term effective September 4,2007. Pursuant to this agreement the District continues said appointment.

Section 2. Duties.
Mr. Tipton shall perform all duties required of the position of Manager of the District. Any duties or changes to duties will assigned by a majority vote of the Commissioners at a public meeting and will be mutually agreed to by Mr. Tipton before implementation. No commissioner can assign duties to Mr. Tipton individually. Mr. Tipton shall attend regular and special meetings of the District Commissioners that are scheduled during business hours, unless excused.

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Mr. Tipton will be compensated at a rate of three (3) days pay for attending any regular or special meeting that starts after 2:00Pm Pacific Standard Time or is still in session after 4:00Pm Pacific Standard Time. Mr. Tipton is not required to attend any meetings on Saturday or Sunday.

Section 3. Exclusjve Employment.
Mr. Tipton agrees to devote his full-time efforts to the position of General Manager .: Full-time efforts are defined as 32 or more hours of work on a weekly basis. Work week is Monday through Sunday. Absent major emergency, Mr. Tipton is excluded from work on Saturday and Sunday.

Section 4. Benefits.
All benefits applicable to District employees in general shall also be applicable to Mr. Tipton, except as otherwise provided herein. Mr. Tipton and his t;>eneficiarieswill continue· to receive District Paid health and dental insurance coverage.

Sedlon S. Salary.
As compensation for services in the capacity as General Manager, Mr. Tipton shall receive an annual salary of $72.070, payable in installments at the same frequency as other District employees. Mr. Tipton's salary shall be increased by the same COlAadjustment afforded the District employees annually in the adopted District budget. Mr. Tipton's salary will increase annually by a minimum of lY2%. Mr. Tipton shall be ineligible for overtime pay except in extenuating circumstances approved by the majority of the District's Board of Commissioners.

Sedlon 6. Working Conditions.
The provlslons of the District Personnel Manual shall be applicable to the employment of Mr. Tipton, where not in conflict with the terms of this agreement or the Revised Code of Washington, provided, however, the District Personnel Manual shall not be considered a part of this Employment Agreement, and the Board of Commissioners reserves the right, in their sole discretion, to unilaterally change the terms of the District Personnel Manual without notice. Mr. Tipton agrees that he shall not rely upon the District Personnel Manual as a term or condition of his employment with the District. Mr. Tipton will be allowed to continue the practice of bringing his dogs to work. No one is allowed access to Mr. Tipton's office without Mr. Tipton's consent and presence.

No changes to existing working conditions will be made without agreement to the changes By Mr. Tipton. Section 7. car Allowance. While Mr. Tipton is using his personal vehicle on District business the District shall reimburse Mr. Tipton at the then prevailing IRSmileage rate.

Section 8. General Expenses. The District recognizes that certain job-related expenses will be incurred by Mr. Tipton while on District business. The District agrees to reimburse Mr. Tipton for such expenses reasonable and necessary to District business as permitted by Statute, District policy and budget.

Section 9. Involuntary Termination/Merger, Consolidation.

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A. Involuntary Termination. The District reserves the right, in its sole, subjective discretion, to terminate this agreement and the services of Mr. Tipton as General Manager. In the event the District decides to terminate this agreement and services of Mr. Tipton, it will provide Mr. Tipton a 120day written notice of such termination. In the event such termination is for reasons other than conviction of a crime, Mr. Tipton shall receive severance pay equivalent to 3 years pay of pay at the rate of pay in effect for Mr. Tipton on the date of notice of termination. Said pay shall be paid in one lump sum payable within Sdays. In such circumstances, Mr.Tipton and his legal dependents shall also be covered on the District's health insurance program at the District's expense for said 270 days or until such time as Mr. Tipton secures other employment with medical insurance coverage, whichever occurs sooner. The severance pay shall include all benefits except vacation and sick leave accrual. Payment shall be made for all accrued vacation and sick leave accrued as of the actual date of termination. There will no limit on the number of hours of accrued vacation and sick leave. Should Mr. Tipton voluntarily terminate his employment during the 120 day notification period, he shall be entitled to pay up to the last day worked, plus severance pay as previously described.

B. Merger, Assumption or Consolidation. In the event Mr. Tipton's employment as General Manager is terminated as a result of a merger, assumption or consolidation of BWD with another utility district, County, city, or bankruptcy, Mr. Tipton shall receive severance pay equivalent to 2 years of pay

at the rate of pay in effect for Mr. Tipton on the date of notice of termination. Severance pay shall be paid in one lump sum payment. Mr. Tipton and his legal dependents shall also be covered on the District's health insurance program at the District's expense for said 270 days or until such time as Mr. Tipton secures other employment with medical insurance coverage, whichever occurs sooner.

Section 10. Voluntary Termination.
In the event that Mr. Tipton elects to voluntarily resign or retire, 'he shall give the District not less than thirty (30) days advance written notice. In the event of a voluntary termination by Mr. Tipton the severance pay will equal 2 years of pay and insurance benefits referenced in Section 9 above.

Section 11. Vacation Leave/Administrative leave. Mr. Tipton will be allocated fifteen (15) days.vacation annually. The District Commissioners
will review the amount of annual vacation allocated to Mr. Tipton annually for increases over the standard vacation leave granted other employees. In addition to vacation leave, Mr. Tipton shall receive ten (10) days of paid administrative leave per contract year.

Section 12. Professional Membership.
The District agrees to pay the professional dues and subscriptions for Mr. Tipton to participate in National, Regional, State, and Local associations and organizations necessary and desirable for his continued professional partlclpatlon, growth and advancement, and the good of the District. Such dues will include but are not limited to the annual WASWD dues and American Water Works Association dues.

Section 13. Performance Evaluations.
The District Commissioners will evaluate Mr. Tipton's performance annually, in October of each year. The District Commissioners, in consultation with the Manager, shall determine the method for Mr. Tipton's annual performance review. The failure of the Commissioners to conduct an annual performance review in October provides Mr. Tipton a $5,000 performance bonus payable on November 1 of every year of the contract.

Section 14. Term.
Subject to the provisions of Sections 9 and 10, the term of this agreement shall be for five years, commencing August 9, 2011 to terminating August 8, 2016. Mr. Tipton may, at his option, renew this agreement for an additional six (6)years by advising the Board of Commissioners not later than August 1, 2016 of his desire to renew.

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Section 15. Entire Asreement. This agreement contains the entire understanding between the two parties and it shall not be modified by any oral understanding inconsistent with the terms and conditions herein. This contract can only be modified by written addendum agreed to by the parties. IN WITNESSWHEREOF,and in agreement to the terms and conditions contained herein, the parties have affixed their signatures on the dates indicated ..

Approved by motion of the Belfair Water District Commissioners on the 9th day of August,

2010.

Date 08/9/2011 Commissioner Date 08/9/2011 Commissioner Date 08/9/2011 Commissioner Date 08/9/2011 District Manager

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