Section six of City Manager Steve Driscoll’s Employment Agreement requires that the City Mayor and City Council review and evaluate the City Manager's performance and salary on an annual basis. Pursuant to the Agreement, the City Council may adjust the City Manager’s salary and benefits as mutually agreed with the City Manager.

The contract further provides that if City Council takes no action on the Manager's contract by July 1 in any year, the contract will automatically renew for a one (1) year term under the same terms and conditions set forth herein

Performance Evaluation

To facilitate the process, the Mayor, and City Council, were asked to provide performance feedback to Mindy Falk, Human Resources Manager.   A summary of these performance reports is attached as “City Manager Review.”

Salary Analysis

The Human Resources Department has conducted a total compensation market analysis of Northern Nevada City and County Managers.  This report is also attached and labeled “City Manager Salary Survey”.

Contract Changes

City Manager Driscoll and Mayor Martini have met and discussed possible changes to the City Manager contract. They are proposing changes for the Council’s consideration to the term of the contract, cost of living increase, and the sick leave conversion in option two benefit.  The Finance Department has completed a fiscal analysis of the proposed changes which is attached and identified at "Fiscal Impact Assessment".

Contract Term

City Manager Driscoll has asked for a contract term for less than one year.  This contract will begin July 1, 2018 and end March 14, 2019.

Cost of Living (COLA)

The current Executive Resolution approved by Council on November 13, 2017 grants employees in this resolution a COLA based on the Consumer Price Index (CPI).  The specific CPI value referenced in the resolution for December 2016 to December 2017 was 2.7%.  Based upon the Mayor’s recommendations, Council may want to consider granting the City Manager a similar cost of living allowance to stay consistent with pay practices.  The FY19 fiscal impact of the COLA would be $5,489.

Sick Leave Conversion Option Two Benefit

As discussed by the Mayor and City Manager, the Council may want to consider the elimination of the current sick leave cash-out option in the City Manager’s contract and replacing it with the Executive Resolution’s sick leave cash-out benefit.

City Manager Driscoll’s current contract permits the City Manager to choose to cash-out sick leave for a one-time payment equal to fifty percent (50%) of the unused accumulated sick leave up to the maximum of two thousand five hundred (2,500) hours upon termination or the City Manager’s death.

The current Executive Resolution sick leave cash-out benefit has the following table allowing the Executives to cash-out their sick leave at a higher percentage than the City Manager’s contract.

As well as a more generous benefit for the sick leave cash-out percentage, the Executive Resolution has other language for non-service related death of the employee.  The resolution allows upon non-service related death of the employee, that the employee’s estate receives a one-time payment of a percentage of employee’s accumulated sick leave in accordance with years of service in the sick leave cash-out table.  At no time, will the one-time payment exceed twenty-five thousand ($25,000.00) no matter the years of service.

In addition to matching the Executive Resolution sick leave cash-out benefit, the City Manager and the Mayor propose the Council consider adding a survivor benefit to the sick leave cash-out upon death of the City Manager after retirement.   With this change the City Manager’s spouse will continue to receive the annual cash-out installments but will not exceed what the City Manager would have received.

In the current City Manager employment agreement, the sick leave cash-out language is valued at $143,000 and would be paid in the year of retirement.  The proposed sick leave cash-out language would cost $143,000 spread over twelve years. The cost would be limited to $25,000 per fiscal year until the balance of the sick leave is paid.

The City Council may take one of the following actions:

1. Renew the City Manager employment agreement and make an adjustment to the City Manager's salary and benefits as mutually agreed to with the Council and the City Manager.
2. Renew the City Manager Employment Agreement and make no adjustment to the City Manager's salary and benefits.
3. Not renew the City Manager employment agreement.
4. Provide other direction.

I move to approve the City Manager Employment Agreement through March 14, 2019 and approve a compensation increase of $5,489 and employment contract language changes including benefit options.