(a) The board may make rules and regulations governing examinations, eligible registers, appointments, transfers, minimum and maximum salaries, promotions, demotions, annual and sick leave, and merit raises. Any action taken by the board affecting a rule or regulation relating to transfers, minimum and maximum salaries, promotions, demotions, annual leave, sick leave, and other matters as may be necessary to accomplish the purposes of this part, is subject to the consent of the governing body. If any merit raise has been denied or demotion has been recommended by the appointing authority, the employee has 10 working days to contest the denial or demotion to the board. After the review of all facts, the findings of the board shall stand unless the ruling of the board is appealed to the governing body for a final decision regarding the matter. A rule or regulation may be made only after a public hearing is held on the proposed rule or regulation and after a certified copy of the rule or regulation has been filed with the city clerk. All employees shall be appointed upon a nonpartisan merit basis without regard to race, color, national origin, political affiliation, disability, age, sex, or religion. There shall not be appointed, and the board shall not examine, any person who is not a citizen of the United States. With the approval of the governing body, the board shall do all of the following:

(1) Classify the different types of services to be performed in the service of the city.

(2) Prescribe qualifications, including those of education, training, and experience, for the appointees and incumbents of each class.

(3) Fix a maximum and minimum salary for each class.

(4) Allocate each position in the service to its proper class based on a determination by the governing body, pursuant to its budgetary process, of the number of positions eligible for appointment in each class.

(b) The appointing authority shall provide for the periodic rating of employees according to their merit to determine whether they are maintaining standards of service. With the consent of the governing body, the board shall establish rules and regulations governing dismissals, suspensions, layoffs, terminations, and leaves of absence. The severance of the relationship of any employee with the city shall be in accordance with board regulations.

(c) The appointing authority shall maintain a personnel file on each employee. The personnel file of any employee may be reviewed by the board whenever determined necessary by the board.