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Home My WebLink About09496ORDINANCE NO. 9496 AN ORDINANCE APPROVING A SECOND AMENDMENT TO AN EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND PEWAG TRACTION CHAIN, INC., A COLORADO CORPORATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE MAYOR TO EXECUTE SAID SECOND AMENDMENT BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that good cause exists for the extension of the employment commitment date for PEWAG Traction Chain, Inc., a Colorado corporation (the “Company”). The second amendment to an employment agreement, dated July 8, 2019, a copy of which is attached hereto and incorporated herein by this reference, having been approved as to form by the City Attorney, is hereby approved. The Mayor is authorized to execute and deliver said amendment in the name of the City and the City Clerk is directed to affix the seal of the City thereto and to attest same. SECTION 2. The officers and staff of the City are directed and authorized to perform any and all acts consistent with this Ordinance and the attached second amendment to an employment agreement, which are necessary or desirable to implement the transactions described therein. SECTION 3. This Ordinance shall become effective on the date of final action by the Mayor and City Council. Action by City Council: Introduced and initial adoption of Ordinance by City Council on June 24, 2019 . Final adoption of Ordinance by City Council on July 8, 2019 . President of City Council Action by the Mayor: ☒ Approved on July 11, 2019 . □ Disapproved on based on the following objections: _ Mayor Action by City Council After Disapproval by the Mayor: □ Council did not act to override the Mayor's veto. □ Ordinance re-adopted on a vote of , on □ Council action on _______ failed to override the Mayor’s veto. President of City Council ATTEST City Clerk City Clerk’s Office Item # R-6 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: June 24, 2019 TO: President Dennis E. Flores and Members of City Council VIA: Brenda Armijo, City Clerk FROM: Mayor Nicholas A. Gradisar SUBJECT: AN ORDINANCE APPROVING A SECOND AMENDMENT TO AN EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PUEBLO, A COLORADO MUNICIPAL CORPORATION AND PEWAG TRACTION CHAIN, INC., A COLORADO CORPORATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE MAYOR TO EXECUTE SAID SECOND AMENDMENT SUMMARY: Attached is an ordinance approving and authorizing the Mayor to sign a second amendment to an employment agreement with PEWAG Traction Chain, Inc., a Colorado corporation (the “Company”). The amendment extends the Company’s employment commitment date until July 1, 2020. PREVIOUS COUNCIL ACTION: The Company and City entered into an original employment agreement dated September 10, 2012 which provided for the advancement of funds in the amount of $950,000 to the Company in exchange for the Company’s commitment to employ, for a seven-year period, fifty-five (55) full- time employees whose annual salary would average at least $35,500. On July 24, 2017, by Resolution No. 13726, City Council extended the employment commitment date of the Company until July 1, 2019. BACKGROUND: As a result of a change in its business plan and an anticipated enlargement of its Pueblo manufacturing facility, the Company has requested that the City extend the Company’s employment commitment date until July 1, 2020. The Company intends to continue to operate its manufacturing facility within the City through at least June 30, 2027. FINANCIAL IMPLICATIONS: There will be no financial impact on the City if City Council approves the extension of the Company’s employment commitment date. BOARD/COMMISSION RECOMMENDATION: Not applicable to this ordinance. STAKEHOLDER PROCESS: Not applicable to this ordinance. ALTERNATIVES: If this ordinance is not approved, the Company’s employment commitment date will occur prior to the Company being able to employ fifty-five (55) full-time employees. RECOMMENDATION: The Pueblo Economic Development Corporation recommends approval of this Ordinance. Attachments: Proposed ordinance; Second Amendment to Employment Agreement SECOND AMENDMENT TO EMPLOYMENT AGREEMENT THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT ("Second Amendment") entered into this 8th day of July, 2019 between the City of Pueblo, a Colorado municipal corporation (the "City") and Pewag Traction Chain, Inc., a Colorado corporation (the "Company"). WHEREAS, Company and City entered into an original Employment Agreement ("Employment Agreement") dated September 10, 2012 which provided, inter alia, for the advancement of funds in the amount of $950,000.00 to the Company in exchange for the Company's commitment to employ,for a seven(7)year period, fifty-five(55)full time employees whose annual salary would average at least$35,500.00; and WHEREAS, Company and City entered into a First Amendment to Employment Agreement dated June 15, 2017 which extended the Company's Employment Commitment Date until July 1, 2019; and WHEREAS, Company intends to continue to operate its manufacturing facility within the City through, at least, June 30, 2027; and WHEREAS, as a result of a change in its business plan and an anticipated enlargement of its Pueblo manufacturing facility,the Company has requested that the City extend and enlarge the Company's Employment Commitment Date. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Company agree as follows: 1. The Company's Employment Commitment Date is enlarged and extended to July 1, 2020. 2. The Termination Date of the Company's Employment Commitment is enlarged and extended to June 30, 2027. 3. From July 1, 2020 to June 30, 2027, Company will continuously conduct its business operations at the Facility and employ, on a quarterly average, not less than fifty-five (55) Full- Time Employees at the Facility ("Employment Commitment"). Such quarterly average shall be calculated using the sum of the aggregate number of Full-Time Employees on each business day of a Quarter, divided by the sum of the aggregate business days in such Quarter. 4. Notwithstanding anything contained in this Agreement to the contrary, if Company shall fail to meet the Employment Commitment, Company shall pay to City compensating amounts calculated as follows. From July 1, 2020 to June 30, 2027 (the "Commitment Period") Company shall pay to City a compensating amount for each Quarter in the Commitment Period calculated by subtracting the number of Quarterly Employees from the commitment of fifty-five (55) Full-Time Employees and then multiplying the result by $616.88. For example, if for the second Quarter of 2021, the number of Quarterly Employees is 41 the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be(55 - 41) x $616.88 = $8,636.32. 5. The Employment Agreement between the Parties, which is incorporated herein by this reference, shall remain in full force and effect,except as amended by this Second Amendment Agreement. Executed at Pueblo, Colorado, the day and year first above written. [ SEAL] City of Pueblo, a Colorado Municipal Corporation Atte t2 £ JUh/tLC By e 04417fi City Clerk Nicholas A. Gradisar Mayor [ SEAL] PEWAG TRACTION CHAIN, INC., a Colorado corporation 7 Attest: By 1 ��C: Name: Name: G0R1FPEd/2fe"Pe/2 Title: Title: 6. n 2