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F�—�S•-�� 3: f� F��W]K (�'� MFf C7}.EY 61� 339 � �_Q3 Mayor Klausing City of Roseville Council Members April 14,2004 Page 2 compensation cannot exceed 95 percent of t�,� Governor's salary, unless one of the statutoiy exceptions applies. Following are bacicground facts pertinent to this matter: 1. In April, 2001, Mr. Beets and the City entered an Employment Agreement. The Agreement provides for a salary of $110,000 per year; The Agreement also provides for an automobile allowance of $500.00 per montlz, or $6,000 per year. 2. At some point, a dete�-�niYlation w� made to have the City p�y the Manager's auto allowance directly to the Manager's automobi.le dealer/]easing agency. Presumably, there was a good faitl� belief that the auto payment was not included in compensation for purpose of salary cap matters. 3. The Governor's salary h�s been $120,303 since 1998. Thus, 95 percent of the Governor's salary is $1 14,288. 4. Adding the auto allowance to the Manager's yearly salary would result in a compensation package which exceeds the cap in Mi��n, Stat, �� 43A.17 by $1,721, By letter dated February 26,2004 (copy attached), DOER sent a Iett�er to tl�e City. DOER advised the City of the salary cap issue. DOER advised the City it had no record of a waiver of the cap on file.' In tlie mid 1990s, the State Auditor and Attorney General issued several opinions and letters concer-�iing automobile aliowa�ices and the salary cap. T�7�. letters opine that autoin�biie allowances count as compensation for purposes of the salary cap. I believe that the Auditor/Attorney Genera] construction of the statute is coi��ct. This would be true whether the City pays the allowance to the employee, or directly to the automobile dealer/leasing agency. Consequently, an adjustment in total compensation of the City Manager is necessary. Such an adjustment would need to take the form of an amend��ient to the Employment Agreement. � The City has not, to my icnowle�ige, applied for a�vaiver as ailowed by stat��iCe. Moreover, the DOER letter incorreetly indicates total City Manager compensation as $120,137.