In February of 2019, the City Council approved an employment contract with Mr. Krutz, engaging him as the Sparks City Manager. That contract provides for City Council to review Mr. Krutz's performance each May and allow up to a five (5) percent merit increase in his salary. The contract also allows Mr. Krutz to receive a COLA equal to the COLA provided for in the Managment, Professional and Technical Employee Resolution. The contract originally ran through June 30, 2022.

In March of 2020, the United States, State of Nevada, and City of Sparks all declared states of emergency due to the COVID-19 pandemic. The State of Nevada ordered businesses to close or drastically change their operations to protect the public from the novel coronavirus. As a result, the City anticipated dramatically reduced revenues from consolidated taxes (C-Tax) and other sources. In May of 2020, the City's financial future looked grim.

In anticipation of reduced City revenue, when the City Council reviewed Mr. Krutz's performance on May 26, 2020, Mr. Krutz asked that (1) his salary be reduced by five percent, (2) the City Council decline to provide him a merit increase despite Council's expressed satisfaction with his performance, (3) he not be provided a COLA, and (4) his employment contract be extended through June 30, 2023. The City Council approved these requests in the first amendment to Mr. Krutz's employment contract on May 26, 2020. In addition, some City Council members requested that their own salaries be reduced by five percent, as well.

City staff has been tracking C-Tax and other City revenue sources closely. The City's financial outlook, while still somewhat uncertain, has improved greatly since May of 2020. C-Tax and other revenue streams have not been as depressed as originally feared. Given this change in circumstances, Mr. Krutz is requesting that the City Council restore his reduction in pay and provide the merit increase and COLA he chose to forgo in May 2020. Based on the Managment, Professional and Technical Employee Resolution, the COLA would increase Mr. Krutz's pay by 2.8 percent.

If approved, this second amendment to Mr. Krutz's employment contract would not apply retroactively. Instead, the increase to Mr. Krutz's pay would take effect the first full pay period after City Council's approval, or January 17, 2021.

1. City Council may approve the amendment as presented.

2. City Council may decline to approve the amendment and engage in further discussions with Mr. Krutz.

I move to approve Amendment No. 2 to Contract of Employment (AC-5553) of Sparks City Manager.