(1) The council may employ a village manager.

    (2) The manager shall serve at the pleasure of the council.

    (3) The council may enter into an employment contract with a village manager for a period extending beyond the terms of the members of council but not exceeding 6 years. An employment contract with a manager shall be in writing and shall specify the compensation to be paid to the manager, any procedure for changing compensation, any fringe benefits, and any other conditions of employment. The contract shall state that the manager serves at the pleasure of the council. The contract may provide for severance pay or other benefits in the event the employment of the manager is terminated at the pleasure of the council. Unless otherwise provided by ordinance adopted under subsection (4), the council may assign to the manager only those powers and duties not required by law to be assigned to or performed by another official of the village.

    (4) The council may adopt an ordinance assigning to the manager an administrative duty imposed by this act on the council; an administrative duty imposed by this act on the village president; the authority to appoint, remove, direct, or supervise any employee or appointed official of the village; or supervisory responsibility over the accounting, budgeting, personnel, purchasing, and related management functions imposed by this act on the village clerk and the village treasurer. The council shall provide in the ordinance that the assignment becomes effective 45 days after the date of adoption and that if a petition signed by not less than 10% of the registered electors of the village is filed with the village clerk within the 45-day period, the ordinance shall not become effective until after the ordinance is approved at an election held on the question. Notice of the delayed effect of the ordinance and the right of petition under this subsection shall be published separately at the same time, and in the same manner, as the ordinance is published pursuant to section 4 of chapter VI. The village clerk shall compare the signatures on the petitions to the signatures of those electors as they appear on the appropriate registration cards. If a petition bearing the required number of valid signatures of electors is filed, the clerk shall perform the acts required for the submission of the question of adoption of the ordinance at the next general or special election. An ordinance adopted before December 2, 1985 that conforms substantially with the requirements of this subsection is valid to the same extent as if the ordinance had been adopted on or after December 2, 1985.