Four years after the Minneapolis City Council capped salary increases for city employees at 2 percent, city leaders are looking at changing or possibly lifting the policy.
At the direction of Mayor R.T. Rybak and the City Council, city staff members are conducting a wage analysis and drafting a new compensation policy. In August, the City Council's Executive Committee directed members of the City Coordinator's Office and the Human Resources and Finance departments to conduct a wage analysis that will allow the city to establish a “total compensation philosophy.” Mayoral spokesperson Jeremy Hanson said the working group will provide information about a variety of scenarios, such as what different salary increase percentages might cost the city. The City Council will examine the issue more closely at a Feb. 16 study session.
Council Member Elizabeth Glidden (8th Ward), who lists reevaluating the 2 percent wage cap as one of her top priorities this year, has said the current policy is unsustainable and that the city can't expect to retain good employees with it in place. However, Glidden acknowledged that lifting the wage increase cap could result in other effects on city employees.
“It might mean that we can't keep all employees,” Glidden said, adding that the City Council needs to carefully examine all the options and decide what would most benefit its employees.
The city put its 2 percent wage cap policy in place in 2003 as a means of responding to deep cuts to local government aid (LGA), the program that provides cities with annual financial assistance. The cap limits total dollars available for salary increases to 2 percent, meaning some workers might get more than 2 percent and others less. The 2007 budget approved in December includes the 2 percent wage cap. Hanson said any changes to the wage cap policy could be implemented in the 2008 budget.
Changes to the policy can't come quickly enough for city employees and union leaders, said AFSCME Local 9 President Tina Sanz. The wage cap was supposed to be a temporary measure to save jobs when the city took a blow in funding, she said, and employees are frustrated after working under it for four years. Negotiating new contracts with the city has become a slow, difficult process with the cap on wage increases, Sanz said. Employees have worked to garner attention on the issue, holding a rally at the end of October to call for an end to the policy.
“We've been trying to keep the issue alive,” Sanz said. “We're hopeful.”
Hanson maintains the mayor would like to increase compensation for employees but said the amount of revenue the city receives - including LGA funding from the state - plays a large role in wage increases for employees.
“The important issue here is to understand that a new policy is not the solution because it's the revenue that drives the policy,” Hanson said. “It's the revenue limits we've had that have driven us to do the 2 percent wage policy.”