The 55-year-old executive director of the Erie County Water Authority will leave his job in six months with lifetime health insurance but no severance payout under an agreement struck Tuesday.

The deal allows Robert Mendez to reach a pension eligibility milestone but forgoes a $154,000 severance payout he would have received if the commissioners of the Water Authority simply let his three-year contract expire next week without renewing it.

“We don’t believe there should be contracts for anybody in the Water Authority,” said Commissioner Earl L. Jann Jr. “We just don’t think that’s a good idea, and since this was at the end of the contract period, it was time to end that practice.”

Water Authority commissioners three years ago gave Mendez a new contract with a costly golden parachute that made him eligible for a year’s salary and lifetime health benefits if the board chose not to renew the contract for an additional two years. The deal approved Tuesday ended weeks of negotiations over the future of the position after commissioners notified Mendez they did not plan to renew the contract.

Under Mendez’s new contract, he will receive fully paid health insurance for five years and then will contribute 15 percent toward the cost of the premium. He would have received fully paid health insurance for life under the previous deal.

All employees of the Water Authority who leave with 15 years on the job are eligible for lifetime health benefits, according to the Water Authority’s human resources policies. Those who retired after April 2012 pay 85 percent of the premiums.

A 17-year Water Authority employee, Mendez was appointed executive director in 1996 after a six-year stint as Erie County’s commissioner of senior services under former County Executive Dennis Gorski.

The commissioners, in a joint statement, described the decision to keep Mendez on for six months as a way to provide a “fluid transition” as one of three Water Authority commissioners is replaced by a new appointee next month. They did not give a reason for the decision to replace Mendez.

“We want to really go in a different direction in a lot of areas,” Jann said. “We’re doing that and we just felt it was time.”

Jann said commissioners have not yet begun a search for Mendez’s replacement and could not say how wide the search will be.

“I would like to see a business person, somebody who knows how to run a corporation,” Jann said. “This is a $60 million plus operation, and I want to see somebody with excellent managerial capabilities and who knows how to run this size operation.”

Hiring at the Water Authority, which is led by three commissioners appointed by the County Legislature, has been criticized for years as under the influence of local political parties. Under criticism for hires made through word-of-mouth political networks, the Water Authority last fall began posting all openings on its website.

“To my knowledge, there is no one currently that is in line for this position,” Jann when asked by reporters whether leaders of local political parties would have influence over who is chosen to replace Mendez. “We haven’t even begun that process yet. So as far as I’m concerned, that is not an overriding factor at all; it’s not a factor in it.”

Mendez also could be paid $75 an hour on a consultant basis if the Water Authority determines it needs his assistance after he retires, according to the contract.

He declined to comment on the agreement after a Water Authority board meeting Tuesday.

Board members on Tuesday also agreed to hire Timothy D. Gallagher as a part-time associate attorney. Gallagher, an Orchard Park resident with a private legal practice, is a town prosecutor for Orchard Park and a former assistant district attorney for Erie County. He will work up to 19 hours every two weeks at a rate of $100 an hour.

Gallagher was one of two people who applied for the position after it was posted on the authority’s website. The part-time job was left vacant after another Water Authority attorney, Ed Betz, moved into a full-time position, Jann said.

Christopher J. O’Brien, an attorney, was recently picked by Democrats in the County Legislature to replace Water Authority Commissioner Jack O’Donnell when O’Donnell’s term runs out in April.