Subdivision 1. The council must, by ordinance, establish a merit system. It must cover all presently employed regular employees of the city and all future regular employees of the city. The city manager, the city attorney, the assistant city manager, the deputy city attorneys, and the assistant city attorneys, are not covered by the merit system.
Subdivision 2. The merit system must include a merit board composed of three members, to be appointed by the council from among the registered voters of the city. Each member serves for a term of three years or until a successor is appointed and qualified. On the first board appointed, one member serves for a term of one year, one serves for a term of two years and one serves for a term of three years. The members serve without compensation but are reimbursed for expenses incurred in connection with the city’s business. The council can remove a member from the merit board for just cause at any time.
Subdivision 3. All city employees and officers covered by the merit system are appointed by the city manager on the basis of merit and fitness, according to rules and regulations established by the merit board. The manager can make recommendations to the merit board on rules and regulations. The rules and any amendments, when approved by the council and posted at the city hall, have the force and effect of law. The rules must include provisions for, but not be limited to, classification of positions; competitive examinations; rejection of applicants; eligible lists; certification of eligibles to the appointing authority; promotions; demotions; suspension; lay off; discharge; and general working conditions including hours of work, holidays, personal leave, vacation, and leaves of absence. No covered employee can be dismissed, suspended, removed or reduced in grade, except for cause as set forth in the rules and regulations. All covered city employees have the right to appeal a dismissal, suspension, removal or reduction in grade within ten days to the merit board. If, by a fair preponderance of the evidence, it can be shown that the appealing employee was dismissed, suspended, removed or reduced in grade for reasonable cause, which cannot be political, racial or religious in nature, the merit board must confirm the action. Otherwise, the merit board can reinstate the employee on terms and conditions it considers appropriate.