HomeMy WebLinkAbout10072ORDINANCE NO. 10072
AN ORDINANCE APPROVING A THIRD 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 THIRD 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 amendment
of the employment agreement between the City and PEWAG Traction Chain, Inc., a
Colorado corporation (the “Company”). The Third Amendment, dated December 13,
2021, 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 Third Amendment in the name of the City and the
City Clerk is authorized to affix the seal of the City thereto and to attest same.
SECTION 2.
The officers and staff of the City are authorized to perform any and all acts
consistent with this Ordinance and the attached Third Amendment 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 November 22, 2021.
Final adoption of Ordinance by City Council on December 13, 2021 .
President of City Council
Action by the Mayor:
☒ Approved on December 20, 2021 .
□ 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-13
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: November 22, 2021
TO: President Lawrence W. Atencio and Members of City Council
VIA: Marisa Stoller, City Clerk
CC: Mayor Nicholas A. Gradisar
FROM: Daniel C. Kogovsek, City Attorney
SUBJECT: AN ORDINANCE APPROVING A THIRD 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 THIRD
AMENDMENT
SUMMARY:
Attached is an Ordinance approving and authorizing the Mayor to sign a Third Amendment to an
employment agreement with PEWAG Traction Chain, Inc., a Colorado corporation (the
“Company”). The attached amendment reduces the Company’s employment commitment from
55 to 28 employees but requires the Company to keep 28 employees on the payroll for an
additional 6 years until July 1, 2031. The Company has also agreed to pay the City a one-time
contract amendment fee of $5,000, if the City Council approves the attached Third Amendment.
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, 55 full-time
employees whose annual salary would average at least $35,500.
On July 24, 2017, by Resolution No. 13726, City Council approved a First Amendment to the
employment agreement. On July 8, 2019, by Ordinance No. 9496, City Council approved a
Second Amendment to the employment agreement.
BACKGROUND:
As a result of a change in its business plan, the Company has requested that the City agree to a
reduction in the Company’s employment commitment from 55 employees to 28 employees. In
exchange for this concession, the Company has agreed to keep 28 employees on the payroll for
an additional 6 years until July 1, 2031. The Company has also agreed to pay the City a one-
time contract amendment fee of $5,000.
FINANCIAL IMPLICATIONS:
No additional “half cent” economic development incentives will be paid to the Company. The City
will receive a one-time contract amendment fee of $5,000, if the City Council approves the
attached Third Amendment.
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 proposed “work out” of its employment
commitment will not be accepted.
RECOMMENDATION:
The Pueblo Economic Development Corporation recommends approval of this Ordinance.
Attachments:
Proposed Ordinance
Third Amendment to Employment Agreement