Minneapolis to spend $1 million to raise pay of top employees

About 120 of the highest-paid employees in Minneapolis city government are in line for a raise.

The city's Executive Committee, which includes Mayor Betsy Hodges and senior members of the City Council, voted Wednesday to increase the employees' salaries by more than 7 percent over the next year at a total cost of nearly $1 million. Current salaries for the appointed officials range from $80,000 to $165,000 a year.

Republicans in the Minnesota House plan to use the move as ammunition in their quest to reduce state aid to Minneapolis, a DFL stronghold.

But city leaders say the bigger paychecks will help the city attract top talent.

Minneapolis City Assessor Patrick Todd said he's had a terrible time trying to recruit senior managers in his department over the last year. In the case of one job candidate, he lost a bidding war when a nearby county offered $15,000 more.

Todd told members of the City Council that when he recently tried to replace his second-in-command, only six people applied.

"Two did not meet the minimum qualifications," he said. "Two did not have any supervisory experience, and the two that did have supervisory experience, they were only supervising three or less staff."

After the city modestly raised the pay for the job and posted it again, another six applied. This time, there was one qualified contender, but she was already making the same salary at her job in Minnetonka, which is a fraction of the size of Minneapolis.

She also would have had to give up her vacation time and the opportunity for merit pay. In spite of that, Todd said he was able to talk her into switching jobs.

"She doesn't have any regrets," Todd said. "I'm very, very happy. I think she saw the gray hair on my head and saw that there were some opportunities down the road here for her ... Truly, I think she had a net loss after I hired her."

According to the Minneapolis Human Resources Department, the salaries the city pays high-level appointed officials are about 6 percent lower than comparable cities. Besides not keeping up with the market, they haven't kept up with the city's own middle managers who are represented by unions.

Public Works Director Steve Kotke said most of his division directors are making only slightly more than the people they supervise.

"And not only is this an issue of fairness and concern for me on [retaining] our division directors, but it also does not really give much incentive for people in the divisions to take a promotion to these appointed positions — taking on a lot more responsibility for not much additional compensation," Kotke said.

Hodges and other members of the Executive Committee voted to give the appointed officials a series of raises over the course of this year. If the full council agrees, the officials will see raises of between 7 and 8 percent by the end of December.

Collectively, they'll take home nearly $1 million in additional salary. Because the city plans to phase in the increase over time, the impact on this year's budget would be about $200,000.

Minneapolis Employee Services Director Timothy Giles said the raises are overdue, because past city administrations and councils have lacked the political will to address the issue.

"People see the salaries of the appointed employees and think it is just a huge amount of money," Giles said. "But it's more than a huge amount of money. It's fairness for what we're asking them to do."

Gov. Mark Dayton made similar arguments earlier this year, when he tried to give large pay raises to his appointed commissioners. But he faced fierce bipartisan backlash. He eventually agreed to delay the pay increases and give up the power to take similar actions in the future.

That uproar didn't go unnoticed in Minneapolis, where Council Member Linea Palmisano said the city originally planned to approve the pay raises earlier this year. City officials delayed action until now because of the reaction at the state Capitol over Dayton's decision to grant pay raises.

The wait may not have helped.

State Rep. Steve Drazkowski, R-Mazeppa, said the raises in Minneapolis are excessive and wasteful. That's one reason the city should lose some of its local government aid, he said.

"Whether it's 8 percent wage and salary increases for people who are making six figures in Minneapolis government, or whether it's a $500,000 art exhibit that's being proposed on Nicollet Mall — or many other outlandish expenditures and the decisions around them — all of them will contribute certainly to the arguments here in St. Paul," Drazkowski said.

Raises for Minneapolis staff