SPUC to negotiate new salary, repayment after Utilities Manager found in violation of state salary cap

Shakopee Public Utilities Commission (SPUC) voted unanimously Thursday to renegotiate Utilities Manager John Crooks’ salary after an investigative report found Crooks exceeded the state-mandated salary cap from 2017-2019 and was on track to exceed it again in 2020.

The commission also voted unanimously to have its general counsel select an accounting firm to determine how much Crooks was overpaid and to negotiate a repayment plan.

SPUC spent more than two hours in closed session Thursday to discuss the report, which has not been made public, from law firm LeVander, Gillen, and Miller, P.A. The firm was appointed in May to investigate allegations that Crooks’ annual salary exceeds the salary cap.

The salary cap is set by the Minnesota Legislature to be equal to 110 percent of the governor’s salary. For the year 2020, the cap is $178,782. Public records show Crooks’ 2020 salary is at least $200,000.

Along with renegotiating his current salary and a repayment plan, the commission directed SPU’s acting finance director to determine if any adjustments are necessary to Crooks’ pension fund in light of his salary overages.

Crooks told The Shakopean in a March 10 interview that his salary doesn’t exceed the cap under the statutory definition because vacation and sick leave allowances are excluded from factoring into an employee’s total compensation. The value of Crooks’ five weeks of vacation and 12 days of sick leave are thus subtracted from his gross salary of $200,000 to remain below the salary cap limit, per SPUC’s previous interpretation of the statute.

In May, the Office of the State Auditor informed SPUC it does not agree with that interpretation of the salary cap statute.

“It is our conclusion that neither of these amounts (vacation or sick leave) should be subtracted from an employee’s salary when applying the compensation limit calculation under Minn. Stat. Section 43A.17,” Assistant Legal Counsel David Kenney wrote on behalf of the State Auditor’s Office.

The report also found SPU’s former finance director Renee Schmid, who retired in July, would have exceeded the salary cap in 2020 had she not retired when she did.

Open meeting law violation

The report also found SPUC’s past use of “commission-only” agenda packets is considered a violation of open meeting law.

The commission unanimously voted to adopt the report’s recommendation to limit “commission-only” packets to rare occasions when non-public data is required to be shared with commissioners prior to a meeting. SPU staff and commissioners will also undergo annual training regarding the requirements of Minnesota’s open meeting laws.

Lastly, the report investigated whether information was deliberately withheld from a state report submitted for SPUC approval. SPUC’s outside law firm found there was likely no intentional alteration of the report.

Future of SPUC

At its upcoming Aug. 18 meeting, the Shakopee City Council will discuss a resolution to add a question to the November ballot asking Shakopee voters whether to disband SPUC. The details of what that would look like logistically and financially are unclear as of yet.

A memo written by Assistant City Administrator Nate Burkett and sent to city council members states city staff “uncovered several apparent violations of Minnesota law and a culture of manipulation and secrecy at the top of the organization” while researching the history of utility decisions.

According to Burkett’s memo, the most concerning issue relating to SPUC is water quality and safety.

“Shakopee has historically and continues to have long-standing concerns regarding nitrate levels,” he wrote. “The city is the only municipality in Scott and Carver counties that does not have treated water, and one of the few in the metro area. The utility has no approved plans to address this issue other than to continue their ‘blending’ of more contaminated water with lesser contaminated water to dilute the contamination to get the levels below state maximums.”

Click here to read the memo in full.

The council will meet at 7 p.m. Tuesday to discuss the ballot measure to abolish SPUC. To tune in to the meeting livestream, click here.