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5.2. ERMUSR 10-11-2011Elk River =--~ Municipal Urilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 5 5 3 30-043 0 UTILITIES COMMISSION MEETING P6NEREU B1 ~~l~'UR~ P ~ ,y c o c D T O S E R V E Phone: 763.441.2020 Fax: 763.441.5099 TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. -Utilities Director John Dietz -Chair Daryl Thompson -Vice Chair Al Nadeau -Trustee MEETING DATE: AGENDA ITEM NUMBER: October 11, 2011 5.2 SUBJECT: Review Wage Survey BACKGROUND: For the past 2 decades with the exception of 2009-2011, ERMU has used a survey of a predetermined seven neighboring utilities to gauge the industry for purposes of compensation comparison. For ease of comparing, the lineperson position has typically been used as the benchmark because job duties and position requirements aze fairly consistent from one utility to another. The utilities used in this survey had been agreed upon because of their proximity to ERMU. These are the utilities which ERMU is in direct labor competition with and their employees would generally experience similaz costs of living. This process of using the average benchmazked wages from the identified utilities also provided some mitigation to mazket labor cost volatility. In 2010 and 2011, Elk River Municipal Utilities utilized a new process in evaluating wage increases. This new process for annual wage increase proposals was handled over two separate commission meetings. During the first meeting, management provides industry comparisons, economic trends, and financial impact to the Utilities. Included was the metro average survey of seven predetermined peer utilities that had been used in the past. Also, the Consumer Price Index (CPI) was provided. At the request of the commission, additional information has been provided for the second meeting including survey of benefits. The employees have been provided the opportunity to bring suggestions and requests to management. This information was reviewed and considered by management and then included in the presentation to the commission. At the discretion of the commission, employees were afforded the opportunity to address the commission during the first of the two meetings of this process. The topic would then be tabled until the following utility commission meeting at which the commission would make their decision. DISCUSSION: Staff has begun compiling survey data. Many of the utilities have not finalized or even started discussion on wages for 2012. Because of this, a discussion focused around these survey numbers would be premature. Due to their preliminary nature, these survey results have not been provided. However, this preliminary data would be available to the Commissioners at their request. During the surveying process it was discovered that Shakopee Public Utilities has developed a very successful method for addressing wages and benefits. Shakopee formed a committee assembled of management and commissioners to assess wages and benefits annually. There aze a number of reasons why this method is intriguing for ERMU. First, there is sensitive and confidential wage and benefit survey data available from American Public Power Association and Minnesota Municipal Utility Association that would be beneficial in assessment of wage and benefit consideration. However, this data proves difficult to represent effectively in a public meeting due to their sensitive and confidential nature. This information would be well suited for committee review. Second, prior to 2009 there was concern voiced by legal counsel regarding dialogue between non-management staff and the commission. This resulted in addressing wage and benefit analysis over two sepazate commission meetings. An unintended consequence of this change was a negative impact on open communication. Unfortunately this freeze on direct discussion has negatively strained the work environment. Having a committee would create a forum for questions, concerns, and dialogue which wouldn't be direct negotiation between staff and the governing body. For these reasons, management has had some discussions on how a "recommending" committee could be successfully implemented at ERMU. It is believed that this could be very effective in analyzing information and making that best represent the business goals of ERMU and the customers we serve. ACTION REQUESTED: Staff requests the Commission form a Wage and Benefits Committee.