Quietly, city keeps salary cap pledge

When it comes to negotiating new contracts in tight budget times, silence speaks volumes.

The city imposed a 2 percent wage cap in early 2003, and with one exception, unions have negotiated contracts within that limit -- without visible media battles or job-action threats.

The city has negotiated a dozen contracts within the 2 percent wage cap -- including laborers, professional engineers, attorneys and 911 workers, Timothy Giles, director of employee services, said. It is still negotiating a half-dozen more deals. (A few skilled labor contracts are tied to an industry formula.)

Giles said the unions have been extremely cooperative. The cap, he said, "was an effort to save jobs. The alternative would have been to have large layoffs and, with larger layoffs, we have service reductions."

Some contracts have built-in "step" increases, which give newer employees an automatic raise, typically 4 to 5 percent a year, Giles said. Such increases reduce base-wage raises. For instance, clerical and technical workers got a 1.6 percent base-wage increase after factoring in step increases.

Todd Pufahl, business manager for City Employees' Local 363, said union members realize the city's financial problem is real and that fighting for higher wages would have cost jobs. The local's approximately 490 workers settled for the 2 percent increase.

Pufahl said the salary cap -- and ongoing service cuts -- couldn't be sustained. "We hope for a brighter future," he said. "We would like to have the favor returned."

The city has received significant state-aid cuts. It also is dealing with debt left by previous Minneapolis leaders.

Pufahl said city leaders privately give their contract negotiators spending limits on contracts. He said he thought they went public with the 2 percent cap to send a message to state policy makers -- the message that the city was being prudent and fiscally sound.

The one exception to the cap: city police, who received a 3 percent wage increase that Giles called a "market adjustment" to make the city competitive with other metro-area departments.

Based on a survey of 42 municipalities, "we found out that the Minneapolis Police officers rank almost dead last" in salaries, he said.

Over the three-year life of the new contract, Minneapolis Police salaries should be at or near the top third in the metro area, he said.