City Manager Steve Driscoll will retire from the City of Sparks on March 14, 2019. In a previous agenda item, Mayor Ron Smith recommend the appointment of Neil C. Krutz as City Manager.  This appointment is predicated on the approval of an Employment Agreement for Mr. Krutz. Mayor Smith has met with Mr. Krutz to review the terms and conditions of employment, as stated in the Employment Agreement. The agreement is before City Council today for approval.

Following is a summary of the agreement reached between the parties.  This summary outlines portions of the negotiated contract. The full proposed agreement between the City of Sparks and Neil C. Krutz is attached.  The term of agreement begins March 15, 2019 and shall continue until June 30, 2022 unless terminated pursuant to the terms and conditions of the agreement.

Salary

The Council adopted a classification system and compensation program to be used in determining pay ranges on September 10, 2018.  The City Manager position was included.  Korn Ferry Hay Group, an international leader in this type of work, set the level for City Manager at 26.  This considers the position of City Manager compared with City jobs, and it also compares it with jobs outside the city that have comparable accountability, judgement and knowledge requirements.  Pursuant to Section 6 of the agreement, the City Manager’s salary is to be held within the limits as determined by the City’s adopted Classification and Compensation System.  For example, the system currently establishes that the annual salary should not exceed $248,830.00 per year.  Within the confines of the system, the Mayor and Mr. Krutz negotiated a salary commensurate with Mr. Krutz’s skill set including education and experience.  The beginning base salary in the Executive Agreement proposal is $223,100.80.

The contract contains an option for a 5% percent merit increase based upon the Mayor’s recommendation effective September 15, 2019.

A Cost of Living Adjustment (COLA) is built into the contract equal to the amount allowed for in the current “Management, Professional and Technical Employee” Resolution.  The City Manager retains the right to waive the COLA at his discretion.  Maintaining a COLA will ensure uniformity in the City’s classification and compensation system and reduce salary compression.

Longevity Pay

The City Manager’s longevity is $7,500 net to be paid in November no later than the Wednesday before Thanksgiving each year of the contract.

The City Manager’s deferred compensation contribution will be matched at 100% up to the maximum contribution under federal law.

Benefits

The City will pay 100% of the premium for the City Manager’s group health, dental, vision, life and long-term disability insurance.

Holiday leave, annual leave, personal leave, sick leave and carry over of leave are commensurate with the City’s “Executive Employee” Resolution.

Other Contract Conditions

Beginning in 2020, each year a performance review will be conducted before the last City Council meeting in May.  At the time of the performance review, the City Council may make a up to a 5% merit salary adjustment within the limits as determined by the City’s adopted Classification and Compensation System.

Ethical Commitments

The City Manager will uphold the tenets of the ICMA Code of Ethics.  Neither the governing body or any individual member shall ask the City Manager to violate the Code of Ethics, specifically by asking him to endorse a candidate, make a financial contribution, sign or circulate a petition, or participate in campaign fund-raising activities.  As it relates to personnel, the City Manager shall not be asked to handle any matter on a basis other than fairness, impartiality and merit.

Termination of the Contract

The City or the City Manager may terminate the contract based upon mutual agreement or criteria outlined in the contract.  The agreement outlines variations of possible payouts contingent upon the circumstances under which the contract is ended.

1. The Council may choose to approve the proposed Employment Agreement between the City of Sparks and Neil C. Krutz for the position of City Manager.
2. The Council may choose not to approve the proposed Employment Agreement.
3. The Council may choose not to approve the proposed Employment Agreement and direct the City Manager toward another alternative.

I move to approve the Employment Agreement (AC-5553) between the City of Sparks and Neil C. Krutz for the position of City Manager with a yearly salary of $223,100.80, and authorize the Mayor to execute the contract.