The Office of the State Auditor on Friday informed the Shakopee Public Utilities Commission it does not agree with SPUC’s interpretation of the local government salary cap law, stating SPUC’s view leads to an “absurd and unreasonable result.”
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 obtained by The Shakopean show Utilities Manager John Crooks’ yearly pay is at least $200,000.
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 interpretation of the 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.
Kenney goes on to explain: “The salary an employee receives while using vacation leave should not be viewed as anything other than a component of the employee’s salary. Using vacation leave does not increase or reduce the employee’s annual rate of pay. Since using vacation leave does not change one’s annual salary, the approach of subtracting a portion of the actual annual salary just because it was received when an employee was on vacation would result in using a figure that does not fit the definition of ‘salary’ under Section 43A.17.”
Kenney compelled SPUC to consider the implications of subtracting vacation leave from salary. By this logic, Kenney said, a public employee could have a salary double that of the cap and simply earn six months of vacation.
“At the end of the year, the employee would have collected salary twice the amount permitted by law without violating a statute enacted specifically to restrict the compensation of public employees,” he wrote. “Minnesota Statutes, Section 645.17 requires statutes be interpreted in a manner that does not produce absurd or unreasonable results; this would appear to be an absurd and unreasonable result.”
In response to Kenney’s letter, SPUC on Monday evening voted 3-2 in favor of adopting the state auditor’s interpretation of the salary cap as Shakopee Public Utilities policy. Commissioners Jody Brennan, Kathi Mocol, and Kayden Fox voted in favor of the motion, while Commissioners Mathew Meyer and Deb Amundson voted against adopting the state auditor’s interpretation.
Meyer said he felt the move was hasty because the Attorney General’s Office was also notified of the salary cap concerns and theoretically could issue a conflicting opinion. He also noted Kenney’s claim that the State Auditor’s Office was not presenting a legal opinion or legal advice.
“This is not legal advice. This is not legal opinion. It is merely a description of how they internally have interpreted it,” Meyer said of the State Auditor’s guidance. “Quite frankly I have some problems with the analysis, but being a litigator I know that just one person’s … interpretation of a statute is not definitive.”
In voting to adopt the state auditor’s opinion on the salary cap statute, the commission also directed its third-party legal counsel to review Shakopee Public Utilities employee salaries and begin taking steps to adjust the pay scale to meet state requirements and decipher what method of payback is necessary.