5.4. ERMUSR 06-10-2003 MEMORANDUM
TO: Elk River Municipal Utilities Commission
FROM: Elk River City Council
DATE: May 27, 2003
RE: Compensation Package
At our May 19, 2003 City Council meeting, Commissioner Dietz reviewed your new
compensation package for Elk River Municipal Utilities. The package included:
1. A restructuring of the health and dental plan, which provides increased benefits to the
employees;
2. A 3.77% wage increase for most employees; and
3. A new §457K plan which can, through matching contributions, increase compensation by
$2,000 per employee.
The new compensation package appears to increase total compensation by 5 to 6 percent.
We believe that this increase is excessive considering the current economic times. Due to the
State's current budget deficit, and the significant likelihood that Local Government Aid will be
greatly reduced, it is possible that the city employees will not receive any increase on January 1,
2004 and/or that layoffs may occur.
We realize that the Utilities Commission is a separate branch of the City and does not rely on
Local Government Aid; however, many of our users and residents have a hard time
differentiating the Utilities from the rest of the city government.
The Council is ultimately responsible for the Utilities Commission and we are concemed with
the ramifications of your decision and do not believe it is in the best interests of the City as a
whole.