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2.0. ERMUSR 08-16-2016
ELK RIVER MUNICIPAL UTILITIES GOVERNANCE REVIEW& DEVELOPMENT COMMISSION-MANAGEMENT WORK SESSION Agenda Tuesday August 16th - 2:15 to 3:15 p.m. 1. (2:15) Opening Remarks (Commission Chair and General Manager) 2. (2:20) Opening Remarks and Agenda Review (John Miner) 3. (2:25) Review of work tasks and schedule (John) 4. (2:35) Presentation (John Miner) and discussion (All) of effective governance structure and processes. (Content based on CU's experience, with references from the American Public Power Association and Carver Policy Governance TM model). 5. (2:55) Presentation of Sample Policy Guidance Documents (John) a. Guiding Principles for Governance & Policy Development b. Governance Policy Manual Table of Contents c. Model Policy Format. 6. 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' E -y a 0 = w O 0 0 E > w U _ E -c z o w C!) to O E N t -Q 0 0 C6 Ca QCC i CI) U t... w m 2 .....- ' S 0 -f. ct 0 0 O 1 O W 0 0 •t• t o lr �k 3355 1 .„ c., c,, ci) .. 6.1 C\I • — sCa)41 0 Cli) C = 741 0 CV *ma , 0 111 = C V II) Lim Cli) M E > a.) > o ci_ o = cr) › >u> 0 a) o = 0 • _ cli 4... ... a) 4•-• M . fi " ‘t.. ,t 0 CO Ce C I t'. NIC Uzi t .. v., i Ca t •Z C t ... ... t C) limo tO 0 N > 1 % 4., t)•. 4. L ID k o Ci ..,„. :!allifip,,,-. , la itA"' 41/451. . .. ,.„ :,:„„ . ,,,,,nsiir, . ' • -' •",i,,,,,,,,rv,,, ERMU GOVERNANCE POLICY MANUAL PRINCIPLES FOR POLICY DEVELOPMENT DRAFT AUGUST 12, 2016 1. The Commission, as a body, is accountable to its customers and other stakeholders for the ERMU's overall performance. 2. The Commission, within the limits established by State Law, City Resolution, and its Certificate of Incorporation, is responsible for the proper and effective governance of the ERMU. 3. The Commission's most important and tangible work products are its written policies and the written record of its official actions in compliance with those policies. 4. The Commission's policies are statements of conviction that serve as a definitive point of reference for all decisions and actions of the Commission and for the decisions and actions that the Commission delegates to the General Manager. 5. The Commission's policies will be sufficient in scope for the proper and effective governance of the ERMU. 6. The Board's policies will be sufficient in depth for the Commission, as a body, to accept any reasonable interpretation of meaning by those to whom it delegates the authority to make decisions and take actions on its behalf (Commission Officers and General Manager). 7. The Commission will prepare policies that clearly communicate affirmative expectations for organizational results. 8. The Commission will prepare polices that set limits on the authority delegated to the General Manager and the Commission's officers by clearly communicating actions and situations that are unacceptable. 9. The Commission will refrain from: a. Establishing any more policies than are necessary for proper and effective governance. b. Establishing policies in any more detail than is necessary to communicate appropriate limits or reasonable interpretations by others who are empowered to do so. c. Establishing policies that are vague, duplicative, in conflict with one another, or in conflict with legal and regulatory requirements. 10.The manner in which the Commission develops its policies is an expression of its leadership. '; ©Copyright 2016 eo/aboration Unlimited ERMU GOVERNANCE POLICY MANUAL PRINCIPLES FOR POLICY DEVELOPMENT 11.The Commission will prepare draft policies only after obtaining and reviewing relevant and accurate information concerning the appropriate range of policy options and the likely results of their implementation. 12.The Commission will adopt a policy only after all Commissioners have had a reasonable opportunity to contribute to, consider, express opinions about, and vote to approve or disapprove a written statement of the policy, drafted in the Commission's approved format. 13.The Commission will periodically review and update all of its adopted governance policies. 14.The General Manager will prepare and keep current a policy reference manual containing all adopted governance policies and related documents. The General Manager will ensure that the manual is made available to all Commissioners, the Commission Secretary, and executive managers in hard copy and digital form. 15.The Commission Chair will provide a copy of the policy reference manual to all new Commissioners and will ensure that the orientation of new Commissioners includes adequate coverage of the manual to ensure a thorough understanding of Commission policies and the Commission's policymaking process. 16.The General Manager will monitor and routinely report to the Commission on management's compliance with the limits established by the Commission through its governance policies. «.j0► ©Copyright 2016 Collaboration Unlimited 2 SAMPLE GOVERNANCE POLICY MANUAL TABLE OF CONTENTS Results Policies R - 1 Organizational Core Purpose R - 1.1 Organizational Vision R - 1.2 Organizational Mission R - 1.3 Organizational Core Values Commission - Management Connection Policies BMC - 1 Commission - Management Roles BMC - 1.1 Controlling Authority BMC - 1.2 Delegation of Authority to the General Manager BMC - 1.3 General Manager Accountability BMC - 1.4 Monitoring Performance of the General Manager BMC - 1.5 General Manager Performance Planning & Evaluation Delegation to Management Policies DM - 1 Corporate Limitations DM - 1.1 Succession of Leadership DM - 1.2 Information and Support to the Commission DM - 1.3 Strategic and Business Planning DM - 1.4 Customer Interests DM - 1.5 Core Customer Services DM - 1.5.1 Electric Services DM - 1.5.2 Natural Gas Services DM - 1.5.3 Water Services DM - 1.5.4 Wastewater Services DM - 1.5.5 Telecommunication Services DM - 1.6 Other Customer Services DM - 1.7 Employee Interests DM - 1.8 Organization & Staffing DM - 1.9 Financial Planning and Budgeting DM - 1.10 Financial Condition and Transactions DM - 1.10.1 Investments DM - 1.10.2 Reserve Funds DM - 1.10.3 Debt Issuance and Payment DM - 1.10.4 Procurement DM - 1.11 Cost Allocation and Recovery DM - 1.11.1 Rates & Charges for Electric Services DM - 1.11.2 Rates & Charges for Water and Wastewater Services DM - 1.11.3 Rates & Charges for Natural Gas Services DM - 1.11.3 Rates & Charges for Telecommunication Services DM - 1.11.3 Rates & Charges for Other Services 1 ©Copyright 2016 Collaboration Unlimited SAMPLE GOVERNANCE POLICY MANUAL TABLE OF CONTENTS Delegation to Management Policies (continued) DM - 1.12 Joint-Action Agency Relationship, Representation and Governance DM - 1.13 Protection of Assets (physical property, information, cash, investments) DM - 1.14 Corporate Risk Management DM - 1.15 Legal & Regulatory Compliance DM - 1.16 Environmental Stewardship DM - 1.17 External Communications (public, legislative, allied organizations) DM - 1.18 Community Involvement Governance Policies G - 1 Commission Purpose G - 1.1 Commission - City Council Relationship and Roles G - 1.2 Commission Authorities and Responsibilities G - 1.3 Governing Style (how the Commission intends to govern) G - 1.4 Agenda Planning (annual agenda & meeting agendas) G - 1.5 Commissioner Role, Responsibilities & Orientation G - 1.6 Commissioner Conduct (commitments & conflicts of interest) G - 1.7 Commission Officer Roles, Responsibilities & Succession G - 1.8 Commission Committees (principles, structure, roles and responsibilities) G - 1.9 Independent Advisors to the Commission (general counsel, bond counsel, human resources counsel, etc.) G - 1.10 Governance Evaluation and Development (annual evaluation, continuing education, etc.) G - 1.11 Cost of Governance (financial support for Commission operations and Commissioner compensation) «fljec ©Copyright 2016 Collaboration lin//nfited 2 SAMPLE BOARD POLICY CENTRAL STATES UTILITIES - BOARD POLICY Category: DELEGATION TO Title: INFORMATION & SUPPORT TO THE BOARD DM MANAGEMENT Page 1 of 2 Date of Adoption: Policy Number: DM — 1.2 Purpose & Summary: With this policy, the Board communicates its expectations for information and support from the General Manager. Policy: The General Manager shall not permit the Board to be uninformed or unsupported in its work. Consistent with this general statement, the General Manager shall not fail to: 1. Inform the Board in a timely manner about CSU's significant successes or shortcomings with respect to Board policies, goals and other directives. 2. Submit timely, accurate, and understandable financial, operating and other monitoring data required by the Board in a form that directly relates to the provisions of the Board policies being monitored. (See Policy BMC - 1.4 Monitoring Performance of the General Manager) 3. Report in a timely manner any actual or anticipated instance of management noncompliance with Board policies. Inform the Board about significant events and situations that are directly relevant to the Board's policies, especially any changes which may materially alter assumptions that the Board has used previously to establish policy and make other significant decisions. 4. Advise the Board if, in the General Manager's opinion, the Board is not in compliance with its own policies on Governance (G Series Policies) and Board-Management Connection (CMC Series Policies), especially where Board actions or behavior (individual or collective) is detrimental to the working relationship between the Board and the General Manager. 5. Advise the Board if, in the General Manager's opinion, the Board is unfocused in its work or out of step with CSU's strategic framework (vision, core purpose, core values, mission and strategic objectives). 6. Bring before the Board in a timely manner as many internal and external points of view, issues and alternatives as the Board may need to deliberate and make fully informed decisions. 7. Bring to the Board, in support of the Board's deliberations and decision-making, the recommendation(s) of management, the rationale for those recommendations, and the process(es) by which those recommendations were developed. 0. _t ©2016 Collaboration Unlimited SAMPLE BOARD POLICY CENTRAL STATES UTILITIES - BOARD POLICY Category: BOARD- Title: BOARD-MANAGEMENT ROLES BMC MANAGEMENT CONNECTION Date of Adoption: Policy Number: BMC - 1 Purpose & Summary: With this policy, the Board describes the general nature of its working relationship with the General Manager and distinguishes its role as the governing body from the role of the General Manager, management and staff. Policy: The Board will work with the General Manager as a leadership team. The Board's principal role is to: • Develop and adopt policies for the governance of CSU that set forth the results CSU is to achieve and place limits on the authority of the General Manager to determine how those results are achieved. • Review and approve strategic and business plans that set forth broadly stated objectives and performance measures. • Review and approve major project plans and programs, capital and operating budgets proposed by the General Manager (as required by the Board's Delegation to Management policies). • Routinely monitor organizational performance and accept accountability for that performance. • Hire a competent General Manager and support the General Manager by routinely engaging in collaborative performance planning and evaluation. The General Manager's principal role, with the support of management and staff employees, is to: • Support the Board in its development of policies. • Carry out the Board's policies. • Keep the Board fully informed about the outcomes of its policies, including the achievement of results and the use of resources. • Prepare and present, for Board approval and consistent with Board policies, strategic and business plans, major project plans and programs, and capital and operating budgets. • Manage and operate CSU, accepting accountability for the performance of the organization in relation to the Board's policies, as well as its approved strategic and business plans, major project plans and programs, and capital and operating budgets. 2016 Collaboration Unlimited