Minnesota suburbs feel pressure of salary cap

Blaine's mayor says the statewide rule governing pay is affecting its search for a new city manager.

By Paul Levy, Star Tribune

Last update: November 6, 2007 - 4:51 PM

The Blaine city manager's job pays nearly $140,000 in salary -- more than similar positions in Edina, Eagan, Eden Prairie, Brooklyn Park and Minnetonka. Yet, in its national search for a city manager, Blaine may not be offering enough.

"We're low," Blaine Mayor Tom Ryan said recently. "We're never going to catch up with cities like St. Louis -- and that's who we bid against for a manager."

Blaine has had an opening since Ron Wood resigned as manager Aug. 2. But if the competitive market for prospective city managers is changing, the rule governing Minnesota cities hasn't. The salary Blaine is offering -- $139,817 -- is the maximum it can pay under the nation's only known statewide cap, an oft-debated ceiling that limits salaries local governments can pay.

With the general exception of school superintendents, the maximum salaries of top local officials is 110 percent of the $120,303 salary the governor earns, plus an annual consumer price index adjustment.

"We are competing with states that have no cap," said Laura Kushner, director of human resources for the League of Minnesota Cities. "That makes it tough for a lot of cities, especially in the metro area."

Only Bloomington, whose population of more than 85,000 makes it the largest Minnesota city to employ a manager, has been given an exemption to pay more than the restricted maximum. Mark Bernhardson, Bloomington's city manager since 1991, is paid a salary of $144,292.

Other metro area suburbs pay their managers or administrators nearly the maximum. Tom Hedges of Eagan is paid $139,179. Gordon Hughes of Edina is paid $138,150. Scott Neal of Eden Prairie earns a salary of $134,971. Minnetonka's John Gunyou is paid $128,519.

But those salaries only begin to approach what large cities in other states are willing to pay. While Minneapolis and St. Paul do not employ city managers or city administrators, other major cities have governmental systems comparable to those of Twin Cities suburbs.

St. Louis, which Blaine's Ryan considers a competitor when it comes to hiring a manager, pays its director of operations a maximum salary of $147,342, a spokesman for the Missouri city said.

"I know for a fact that in Woodbury, which I think is one of the premier cities in the state, they did not get the number of applicants they expected," said Clint Gridley, Woodbury's city manager. "One [reason] is the salary cap, and they had to list that in the advertisement."

Gridley, whose salary is $130,000, was one of five finalists when he was selected 3½ years ago. He came from Cedarburg, Wis. Other finalists came from Oregon, California, Iowa and Minnesota, he said.

"With the salary restriction and other restrictions, and our state's open-record law, some candidates aren't willing to risk coming to Minnesota," said Gridley, who is from Illinois and has worked in five states. "There is a competitive element that is hurting Minnesota."

City managers are no different from coaches, said Eden Prairie's Neal. Some come through the ranks. For instance, Edina's Hughes has been city manager eight years but has worked for the city for three decades. Others, such as Neal, worked their way up, moving from one city to a larger city.

Neal moved from a city of 1,800 in Tennessee to Independence, Iowa, population 8,000. Then he moved to Northfield (17,000) and 5½ years ago became city manager in Eden Prairie, with a population of 64,000.

"Eventually, you develop roots and I consider myself lucky to be here," said Neal, who has been a city manager for 19 years. "I consider this the pinnacle."

He's earning slightly less in Eden Prairie than what he might be paid in Brooklyn Park ($135,012) or Blaine.

"I feel lucky to have ended up here," said Neal, who is from Iowa. "In Minnesota, you know the salary limitations when you apply for the job."

It would be a shame, said Woodbury's Gridley, if those restrictions kept good candidates out of state.

Paul Levy • 612-673-4419

Paul Levy • plevy@startribune.com