Former Shakopee Public Utilities Manager John Crooks made more than $39,000 over the state-mandated salary cap from 2017 through 2019, and he was aware of potential salary cap discrepancies starting in 2017, according to a special counsel investigative report that was made public Wednesday afternoon.
The report, written by attorney Korine Land of LeVander, Gillen and Miller, P.A., was released confidentially to the Shakopee Public Utilities Commission on July 31. It did not become publicly available until Wednesday, after Crooks’ resignation, per the separation agreement that was approved by the commission Tuesday.
A press release included in the commission’s Tuesday night agenda refers to Crooks’ departure from SPU as his retirement.
According to the investigative report, Crooks’ salary exceeded the state-mandated salary cap for three consecutive years, totaling approximately $39,283, and would have exceeded the cap in 2020 by an additional $28,418 if action had not been taken.
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 the commission approved a base pay of $200,000 for 2020. Crooks’ total compensation was on track to exceed $207,000 by the end of the year.
‘Laser-focused on compensation’
In a closed meeting in March 2016, a commissioner asked Crooks if the public utility sector has to consider any other public entities when looking at the Utilities Manager’s salary. Crooks responded that Mark McNeill, the former Shakopee city administrator, was underpaid and the commission should be more concerned about the “perception in similar type positions.”
The following year, in February 2017, one of the commissioners expressed surprise in another closed meeting that with his raise, Crooks would make more than the city and county administrators.
“The commission seemed to feel that something was not quite right with his salary, but again, could not identify the issue,” Land wrote in the report.
Shortly after that, former Finance Director Renee Schmid — who retired in July — broached the issue of the salary cap with Crooks in March 2017. She emailed him a copy of the League of Minnesota Cities memo about the governor’s salary cap law and a copy of the state statute.
Crooks responded, “We can start the waiver protocol when I get back to the office. Should be procedural…”
State statute allows public entities to request exceptions, or waivers, to the salary cap if the position requires special expertise necessitating a higher salary. To date, SPU has never submitted a waiver application to the state for the Utilities Manager position, according to the Minnesota Department of Management and Budget.
According to the report, Crooks and Schmid attended a meeting with legal counsel in July 2017 to discuss the salary cap.
“Schmid and Crooks stated that (attorney) Doug Carnival advised against applying for the waiver because he did not believe it would be approved,” Land wrote in the report.
SPUC attorney Kaela Brennan did not attend the meeting but said her partner, Doug Carnival, recollected that his waiver discussion with Schmid and Crooks never reached a conclusion because other avenues were being pursued at the Legislature to change the salary cap law.
Around this same time, according to Schmid, she and Crooks developed a spreadsheet together to “monitor the cap based on interpretation of the statute,” the report quotes her as saying. The spreadsheet determines Crooks’ total salary as such:
- Start with base pay
- Add compensation for serving as Commission secretary
- Add car allowance
- Add deferred compensation
- Subtract the value of sick leave and vacation time
“Using this math, Crooks has justified that he has been staying under the salary cap each year since 2017,” Land wrote. “It should be noted that even using his calculations, for 2020, it shows him under the cap by the slimmest margins = $43.54. The only way Crooks is able to stay under the salary cap for 2020 is by reducing his deferred compensation from $2,000 to $1,200.”
In February 2019, “for what appears to be the first time,” according to the report, Crooks mentions the salary cap law to the commission during a closed meeting.
According to the report, Crooks told commissioners, “As you know, there’s an issue in the state of Minnesota that government workers not making, uh, what is it, not 110% of what the governor has or whatever, and I’m fine. We’re within that range by the time you take out vacation and sick time and stuff, but we’re getting up toward that level.”
One commissioner commented, “The governor makes what? $210, $220 (thousand)?” Land writes that it’s clear the commission was unaware what the salary cap figure actually was. (The 2019 salary cap was $175,621).
Land writes that Schmid recalls raising the salary cap issue with Crooks in both February of 2019 and 2020, and Crooks responded with his own calculations to confirm he was under the salary cap.
“It was very apparent that since he was promoted to Utilities Manager, in 2011, Crooks has been laser-focused on compensation, specifically his own, but also for others in the organization,” Land wrote.
“He alone provides the commission with comparative compensation information every year during his salary discussion, providing volumes of numbers and data to the commissioners,” Land continues. “On several occasions, the commissioners voiced their confusion with Crooks’ calculations and utility company salary comparisons, both public and private. Crooks would offer an apology at the beginning of most of the discussions, stating how he hates bringing up his salary every year, but he was passionately concerned about his wage range and how it must continue moving or he would be ‘topped out.’ It was surprising to us that some commissioners did not recall hearing the same speech from Crooks year after year about the history of his salary and request for an increase.”
Closed meeting confusion
Along with addressing salary cap violations, the investigative report details SPUC’s struggles to adhere to open meeting laws and the Minnesota Data Practices Act.
Land found that many closed commission meetings over the last decade should have actually been open to the public.
“There is lack of knowledge and understanding regarding the Open Meeting Law as evidenced by our interviews with Crooks, Schmid, and President (Deb) Amundson. This is not a new problem,” Land wrote.
At least four closed meetings since 2012 involving Crooks’ employment contracts should have been public, according to the report. One such meeting was closed under the performance evaluation category, which would be appropriate, but the discussion solely focused on the terms of Crooks’ contract, not his performance. Thus, the meeting and materials should have been public, Land wrote.
“While much less significant, it is noteworthy that during many of these meeting that were closed for ‘performance evaluations,’ the commission wandered off topic and discussed projects, historic employee issues, accidents, utility rates, relationships with various people at the City of Shakopee and even discussions about how to have brainstorming sessions and whether they could be open or closed meetings,” Land wrote.
Each government organization must have a Data Practices Policy and a Data Compliance Officer to uphold that policy, but when asked about these policies and duties, Crooks was unaware if SPU has any of those things.
“This uninformed response … became even more apparent when Crooks made a Data Practices request following his interview with our office and instead of going to the SPUC as an ‘organization’ through its President to request certain data, he requested the data from the commissioners themselves. This is completely inappropriate,” Land wrote, clarifying that Crooks should not have expected the commissioners to know the difference between public and nonpublic data and respond to him with such data.
Land emphasizes in the report that data collection is a huge undertaking for a government entity, and the report recommends training for all SPU staff on the data practices act. The commission voted last month to seek training in this area for all staff and commissioners.
“As a government agency, SPUC collects massive amounts of data. Data is classified as public data, nonpublic data and confidential data. These classifications all carry significant legal meaning that is likely unknown by the keepers of the data, which includes every member of the organization,” Land wrote.
SPU Planning and Engineering Director Joe Adams was approved Tuesday by the commission as a short-term interim manager. Commissioners Deb Amundson and Jody Brennan will work with Minnesota Municipal Utilities Association to interview qualified applicants for a longer term interim manager position.
Per the separation agreement, Crooks must reimburse SPU for the salary overages he was paid between 2017-2019. Though the report estimated he was overpaid $39,283, an independent auditor is determining the exact amount, which Crooks must repay in three equal installments before the end of 2020.
The Shakopee Police Department recently received a complaint regarding Crooks’ violation of the salary cap and is conducting an investigation.
The Shakopee City Council voted last month in favor of placing a question on the Nov. 3 general election ballot asking voters whether to abolish the Shakopee Public Utilities Commission. The city is currently distributing a Request for Qualifications for electrical services management in the event voters approve the measure to abolish SPUC.