Public records: SPU manager pay exceeds state salary cap

John Crooks
Former Shakopee Public Utilities Manager John Crooks

Public records obtained by The Shakopean show Shakopee Public Utilities Manager John Crooks’ yearly pay exceeds the state-mandated local government salary cap by more than $21,000.

According to Crooks’ 2020 employment contract, which was approved Feb. 3 by the Shakopee Public Utilities Commission, Crooks’ base salary is $200,000 plus a $300 per month car allowance. 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.

Last year, Crooks’ gross salary was $190,000, while the state-mandated salary cap was $175,621. 

Entities subject to the salary cap can apply for a waiver from the Minnesota Department of Management and Budget to pay an employee more than the cap. The DMB did not have any waivers or waiver applications on file for SPU, but the department did approve a waiver in 2019 for the Rochester Public Utilities Manager for a salary of $193,038.

In an interview with The Shakopean, Crooks denied ever exceeding the salary cap, citing the state statute that excludes vacation and sick leave allowances from factoring into an employee’s total compensation. Read the statute (Section 43 A.17, subdivision 9) here

“According to the state statute, there’s things that can be backed out of that compensation for a government employee. With that it’s vacation and sick time. Those things are backed out,” Crooks said. “We watch that very close, and I have not exceeded that.” 

SPU Finance Director Renee Schmid addressed Crooks’ 2019 salary in response to a data request from The Shakopean. 

“This email confirms that the actual gross salary for 2019 for John Crooks was $190,000. I note that Section 43A.17, subdivision 9 addresses how to determine the salary limitation for public employees, and Shakopee Public Utilities has determined compliance with this statute, resulting in $170,961.54,” Schmid said. 

Crooks is allotted 12 sick days each year and five weeks of vacation. According to his interpretation of the statute, the value of that paid time off is subtracted from his gross salary for the purpose of the salary cap. 

Shakopee City Attorney Jim Thomson of law firm Kennedy & Graven said SPU is misinterpreting the statute by excluding the value of Crooks’ paid leave from his salary. 

“If I understand Ms. Schmid’s email correctly, she is subtracting the value of Mr. Crooks’ sick and vacation benefits from his actual gross salary of $190,000 to arrive at a ‘salary’ of $170,961.54 for salary cap purposes. If so, she is misinterpreting the statute,” Thomson said in an email. “The (statute) exclusion means the annual value of an employee’s vacation and sick leave is not added to the employee’s annual rate of pay to determine whether the employee’s salary exceeds the salary cap.”

The highest paid employee working directly for the city of Shakopee is City Administrator Bill Reynolds, whose gross salary in 2019 was $168,605, plus a $500 per month car allowance for a total of $174,605. A May 2019 City Council memo outlining Reynolds’ most recent salary increase mentioned the salary cap mandate: “The Minnesota State Legislature has restricted the amount that a City Administrator/Manager may make in yearly salary. For 2019 that limit is $175,621.”

When asked for further comment regarding the city attorney’s salary cap analysis, Crooks told The Shakopean that Shakopee Public Utilities believes the statute is clearly stated, but he’s open to a discussion on the topic.

“SPU has benefited from our auditors reviewing the issues, as well as our legal review,” he said. “However, because this issue has been raised, SPU is willing to consider additional information. SPU does not have the benefit of the city attorney’s position and would welcome the opportunity to review it.” 

Mayor Bill Mars said he would like to see the Shakopee Public Utilities Commission address the issue before the city steps in to review anything. The utilities commission had its first meeting Monday with newly appointed commissioners Kayden Fox and Jody Brennan; Brennan also sits on the City Council. 

“If the manager, or any FTE, is over the cap, this should have been reported to the (commission). If there is a violation of state law, this should be independently investigated,” Mars said, adding that salary cap violations would not be within the scope of a standard annual audit. “State law is crystal clear on this. I believe the manager and the (commission) have a fiduciary, ethical and moral responsibility to our community.”