2020 2:00:00 PM

Meeting Link: https://zoom.us/j/92302995013
Meeting Dial-in #: 1-669-900-6833 Meeting ID: 923 0299 5013

General Business: 9.12

Title: Discussion, consideration and possible action regarding the annual performance review of City Manager Neil Krutz.

Petitioner/Presenter: Neil C. Krutz, ICMA-CM/City Manager/Mindy Falk, Human Resources Director

Recommendation: That the City Council review the annual performance of City Manager Neil Krutz.

Financial Impact: N/A

Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.

Agenda Item Brief:

The Employment Agreement for City Manager Neil Krutz requires the City Council to review Mr. Krutz’s performance on or before the last City Council meeting in May of each year. As a part of this review, the City Council may extend Mr. Krutz’s employment contract for an additional period and may offer up to a five (5) percent merit increase for the City Manager, not to exceed the pay range for City Manager as determined by the City’s adopted Classification and Compensation system. In this process, the Mayor and Council Members will provide performance feedback on Mr. Krutz’s performance as City Manager, and may outline specific criteria for prospective performance expectations.

Background:

Mr. Krutz’s employment agreement was approved by City Council on February 25, 2019 and made effective March 15, 2019. Section six (Performance Evaluation and Salary Review) states:

The Mayor and City Council shall review and evaluate the MANAGER's performance on an
annual basis, to be completed on or before the last council meeting in May of each calendar year, commencing in 2020. The City Council may make such adjustment to MANAGER' s salary, within the limits as determined by the CITY' s adopted Classification and Compensation system, as agreed with the MANAGER. At no time shall the Mayor and City Council provide more than a five (5) percent merit increase for the MANAGER.
During this annual review, Council may take action to establish specific performance criteria to assist with the next annual review of MANAGER. Any specific performance criteria established by Council shall be applied prospectively only and shall not be applied retroactively to evaluate the performance of the MANAGER.

In accordance NRS 241.033, prior written notice to Mr. Krutz that a meeting will take place is required if his character, misconduct, competence or health will be discussed. Mr. Krutz must be allowed to attend the meeting. He may also bring a representative if he so choses. Mr. Krutz has been properly notified of his rights.

Analysis:

Performance Evaluation
During the meeting, the Mayor and City Council will review Mr. Krutz’s performance as City Manager for the period between March 15, 2019 and May 26, 2020.

Extension of Term and Merit Increase
The Mayor and City Council may recommend and approve a merit increase up to a maximum of five percent, so long as any increase in compensation stays within the pay range established by the adopted classification and compensation system. Effective October 1, 2018, various City contracts, resolutions and this executive contract began using the Korn Ferry Hay Group (KFHG), otherwise known as “HAY” method of determining internal and external equity in pay. The method is rooted in a thorough and well established classification and compensation system, originally developed by HAY, and used for over 80 years in both public and private entities internationally. The HAY method is considered a gold standard in classification and compensation.

Mr. Krutz’s present annual salary, $241,051, is within the $170,685 to $256,048 pay range established for Hay Level 26. The City Manager is the only position classified in Hay Level 26.

Request from Mr. Krutz
Should the Mayor and Council determine that such a measure is warranted, Mr. Krutz respectfully requests that his Employment Agreement be extended for one year to restore its original term of three years. Additionally, if the Mayor and Council believe that Mr. Krutz has earned a merit increase during this review period, Mr. Krutz asks that no merit increase be given due to the fiscal circumstances created by the COVID Pandemic. Finally, Mr. Krutz will voluntarily forego the 2.8% COLA called for in the Employment Agreement and currently scheduled to be effective the in the first full pay period after July 1, 2020 and will reduce his present salary by 5% starting with the next pay period and extending through FY21.

Alternatives:

The City Council may take one of the following actions:
1. Make an adjustment to the term of the Employment Agreement and/or the City Manager's salary as mutually agreed between the Council and the City Manager, with or without prospective performance expectations for the coming review period.
2. Make no adjustment to the term of the Employment Agreement and/or the City Manager's salary and benefits, with or without prospective performance expectations for the coming review period.
3. Provide other direction to the Human Resources Director.

Recommended Motion:

N/A

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