Loading...
4.1 ERMUSR 02-14-2017 Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Troy Adams,P.E.—General Manager John Dietz—Chair Al Nadeau—Vice Chair Daryl Thompson—Trustee MEETING DATE: AGENDA ITEM NUMBER: February 14, 2017 4.1 SUBJECT: Governance Policy Manual BACKGROUND: In 2016 the Commission approved contracting with Collaboration Unlimited to update and develop core governance policy. The decision to implement and the schedule for completion were largely based on two factors. First,the existing policy book and by-laws had not been reviewed or updated on a routine basis. Second,with the March 2017 expansion for the ERMU Commission from three to five members it was determined to be beneficial to develop and update core governance policy to serve as a guide for the expanded Commission. DISCUSSION: The existing ERMU Policy Book is divided into multiple sections that categorize the policies. These sections are: Governance; Tariffs, Fees, & Programs; Service Agreements & Requirements; Personnel; Administration; Electric; and Water. Many of the existing policies included in the existing ERMU Policy Book are not governance polices but rather procedures, forms, and specifications. One of the goals of this project is to update the policy documents that the Commission is ultimately responsible for and separate out the procedures, forms, and specifications that should fall under the responsibility of management. As approved by the Commission, Collaboration Unlimited is working on Phase 1 of the original scope of work. Phase 1 focuses on the core governance policies and the by-laws. These proposed policies that are part of Phase 1 are intended to be the Governance section of the existing ERMU Policy Book. Phase 2 of the scope of work from Collaboration Unlimited includes development of delegation to management policies. Many of these policies will replace or eliminate the need for policies in the other sections of the existing ERMU Policy Book. Whether the Commission contracts with Collaboration Unlimited to complete Phase 2, or do that work in house,this will be an ongoing project of the next year or longer. The policies developed for Phase 1 are attached. The substance of the these core governance policies is consistent with the summary giving during the kick off meeting the Commission held with Collaboration Unlimited during the Minnesota Municipal Utilities Association Summer F-nuESEe BY Page 1 of 3 NATURE Reliable PubliD Power Provider P O W E R E D T p $ERVE 67 Conference in 2016. These policies also reflect feedback and direction given from the Commissioners through the surveys conducted by Collaborative Unlimited. And, many of these policies have already been reviewed by the Commission over the past few months as they were being developed. Ultimately these policies help define the style of governance and leadership expected,the relationships between the parties, and the authorities and responsibilities for the Commission and General Manger. These policies help define the line between governance and operations. The policies are intended to be a guide for ethical leadership of a community asset. With only Phase 1 substantially complete and Phase 2 not started,there are gaps and overlap in policy. These gaps and overlaps are intended to be resolved as the Commission reviews and considers policy updates and revisions over the coming year. It is the intention to bring policy back for consideration at every Commission meeting as staff works to complete this project. The proposed core governance policies presented are still in the format created by Collaborative Unlimited. The intention would be that these policies would be formatted differently to be consistent with our existing communication branding and similar to our policy formatting. ACTION REQUESTED: Adopt the core governance policies presented as the Governance section of the ERMU Policy Book. ATTACHMENTS: • Existing ERMU Policy Book Table of Contents • Proposed ERMU Policy Book Table of Contents • Existing ERMU Policy— G.l a—By-Laws of Water and Light Commission • Proposed ERMU Policy—G.1b—Organizational Core Purpose • Proposed ERMU Policy—G.1 c—Mission Statement • Proposed ERMU Policy—G.1 d—Vision Statement • Proposed ERMU Policy—G.1 e—Organizational Values • Proposed ERMU Policy—G.l f—Organizational Fundamentals • Proposed ERMU Policy—G.1 g—Planning Themes • Proposed ERMU Policy—G.2—Commission Purpose • Proposed ERMU Policy—G.2a—Commission—City Council Relationship and Roles • Proposed ERMU Policy—G.2b—Commission Authorities and Responsibilities • Proposed ERMU Policy—G.2c—Governing Style • Proposed ERMU Policy—G.2d—Agenda Planning • Proposed ERMU Policy—G.2e - Commission Member Role, Responsibilities and Orientation • Proposed ERMU Policy—G.2f—Commission Member Conduct • Proposed ERMU Policy—G.2g—Commission Officer Roles, Responsibilities and Succession • Proposed ERMU Policy—G.2h—Commission Committees • Proposed ERMU Policy—G.2h.1 —Wage&Benefits Committee Charter • Proposed ERMU Policy—G.2h.2—Financial Reserves and Investment Committee Charter • Proposed ERMU Policy—G.2i—Independent Advisors to the Commission • Proposed ERMU Policy—G.3 —Commission -Management Roles • Proposed ERMU Policy—G.3a—Controlling Authority Page2of3 POWERED BY NATURE Reliable Public Power Provider POWERED To SERVE 68 • Proposed ERMU Policy—G.3b—Delegation of Authority to the General Manager • Proposed ERMU Policy—G.3c—General Manager Accountability • Proposed ERMU Policy—G.3d—Monitoring Performance of the General Manager • Proposed ERMU Policy—G.3e—General Manager Performance Planning and Evaluation • Proposed ERMU Policy—G5—Goals and Results P6 / ERE / B / Page 3 of 3 IR1 Reliable Public Power Provider POWERED T O $ERV E 69 Elk River Municipal Utilities Policy Manual Table of Contents GOVERNANCE G.1 By-Laws G.2 Mission Statement G.3 Governance Handbook (to be developed) TARIFFS, FEES AND PROGRAMS T.1 Fee Schedule T.2 Conservation Improvement Programs T.3 Demand Electric Service Tariff T.4 Dispersed Generation/Interruptible Load Program Tariff T.5 Energy Management Rates Tariff T.6 Non-Demand Electric Service Tariff T.7 Off-Peak Demand Electric Service Tariff T.8 Residential All Electric Service Tariff T.9 Residential Electric Service Tariff T.10 Street/Security Light Service Tariff T.11 Water Conservation Program Tariff T.12 Placeholder T.13 Ground Source Heat Pump Tariff T.14 Commercial All Electric with Ground Source Heat Pump Tariff SERVICE AGREEMENTS& REQUIREMENTS S.1 Additional Residential Electric Service Agreement S.2 Cogeneration and Small Power Agreement S.3 Commercial Developer Electric Service Agreement S.4 Commercial &Industrial Electric Service Agreement S.5 Commercial Interruptible Load Agreement S.6 Dispersed Generation Program Agreement S.7 Residential Developer Electric Service Agreement S.8 Residential Electric Service Agreement S.9 Security Light Agreement S.10 Street Light Agreement S.11 Service Requirements for Electric or Water-Commercial Developer/Builder S.12 Service Requirements for Electric or Water-Residential Developer S.13 Service Requirements for Electric or Water-Residential Home Builder/Owner S.14 Temporary Electric Service Agreement S.15 Water Connection Permit 70 PERSONNEL P.1 Employee Handbook P.2 Apprentice Programs P.2a Electric Apprentice Program (to be developed) P.2b Technical Apprentice Program (to be developed) P.2c Water Apprentice Program P.3 Clothing Policy P.4 Criteria for Clothing Replacement P.5 Conflicts of Interest Policy P.6 Drug Policy P.7 Educational Assistance Policy P.8 Flexible Benefits Plan P.9 HIPAA Security Policy P.9a HIPAA Privacy Certification Form P.9b HIPAA Compliance P.10 Home Computer Purchase Assistance Policy P.11 Inventory Policy P.12 iPad and Tablet Device Guidelines P.13 Performance Metrics and Incentive Compensation Policy P.13a Performance Metrics and Incentive Compensation Score Card P.14 Personal and/or Credit Use &Security Policy P.14a Personal and/or Credit Use & Security Employee Responsibility Form P.15 Use and Disposal of Utility Property ADMINISTRATION A.1 Deposits & Related Services Policies A.2 Automatic Bill Pay for Budget Customers Policy A.3 Banner and Flag Policy A.4 Capital Asset Guide A5 Cold Weather Rule Policy A.6 Customer Deposit Policy A.7 Customer List Procedure A.8 Emergency Closing Procedure A.9 Emergency Procedures Guide A.10 Financial Reserves Policy A.11 Investment Policy A.12 Identity Theft Prevention Program-Red Flags Rule A.13 LFG Tour Procedure A.14 Meter Testing Procedure A.15 Natural Gas Line Damage Reporting Procedure A.16 Payment Arrangement A.17 Payment in Lieu of Taxes (PILOT) and Other Donations to the City of Elk River A.18 Privacy Policy A.19 Public Purpose Expenditure Policy 71 A.20 Purchase Order Policy A.21 Records Retention Policy(to be developed) A.22 Returned Un-Paid Items Policy A.23 Standard Operating Procedures (to be developed) ELECTRIC E.1 Electric Department Rules-Operations and Maintenance Manual E.2 Distribution Reliability Standard E.3 Integrity Testing Policy E.4 Mid-Block Street Lighting E.5 Mutual Aid Policy E.6 Pole Attachment Policy E.6a Pole Attachment Agreement E.7 Pole Disposal Policy E.7a Pole Disposal Agreement E.8 Pole Move Procedure E.9 Street Light Construction Standards E.10 Street Light Installation and Maintenance - Memorandum of Understanding E.11 Two-Way Radio Guidelines WATER W.1 Water Department Rules-Operations and Maintenance Manual W.2 Water Distribution System Maintenance Program W.3 Customer Contact for Water Meter Change-Out W.4 Fire Hydrant Use and Maintenance W.5 Looping Water Mains W.6 Payment of Private Water Line Connection and Repair Costs- Memorandum of Understanding W.6a Payment and Assessment of the Costs to Repair Private Utility Lines- City Policy(for reference only) W.6b Payment and Assessment of the Costs to Repair Private Utility Lines- City Ordinance(for reference only) W.6c Petition, Waiver and Agreement for Payment of the Cost of Repairs to Private Utility Lines W.7 Side Lot Easements W.8 Water Shut-Off Request W.8a Water Shut-Off- City Ordinance (for reference only) W.9 Water Use Restrictions W.9a Water Use Restrictions- City Ordinance (for reference only) W.10 Wellhead Protection Plan 72 Elk River Municipal Utilities Policy Manual Table of Contents GOVERNANCE Authority and Purpose Policies G.1a By-Laws G.lb Organizational Core Purpose G.1c Mission Statement G.1d Vision Statement G.le Organizational Values G.1f Organizational Fundamentals G.1g Planning Themes Governance Policies G.2 Commission Purpose G.2a Commission—City Council Relationship and Roles G.2b Commission Authorities and Responsibilities G.2c Governing Style G.2d Agenda Planning G.2e Commission Member Role, Responsibilities and Orientation G.2f Commission Member Conduct G.2g Commission Officer Roles, Responsibilities and Succession G.2h Commission Committees G.2h.1 Wage & Benefits Committee Charter G.2h.2 Financial Reserves and Investment Committee Charter G.2i Independent Advisors to the Commission Commission Management Connection Policies G.3 Commission- Management Roles G.3a Controlling Authority G.3b Delegation of Authority to the General Manager G.3c General Manager Accountability G.3d Monitoring Performance of the General Manager G.3e General Manager Performance Planning and Evaluation Delegation to Management Policies GA To be Developed Results Policies G.5 Goals and Results 73 TARIFFS, FEES AND PROGRAMS T.1 Fee Schedule T.2 Conservation Improvement Programs T.3 Demand Electric Service Tariff T.4 Dispersed Generation/Interruptible Load Program Tariff T.5 Energy Management Rates Tariff T.6 Non-Demand Electric Service Tariff T.7 Off-Peak Demand Electric Service Tariff T.8 Residential All Electric Service Tariff T.9 Residential Electric Service Tariff T.10 Street/Security Light Service Tariff T.11 Water Conservation Program Tariff T.12 Placeholder T.13 Ground Source Heat Pump Tariff T.14 Commercial All Electric with Ground Source Heat Pump Tariff SERVICE AGREEMENTS& REQUIREMENTS S.1 Additional Residential Electric Service Agreement S.2 Cogeneration and Small Power Agreement S.3 Commercial Developer Electric Service Agreement S.4 Commercial & Industrial Electric Service Agreement S.5 Commercial Interruptible Load Agreement S.6 Dispersed Generation Program Agreement S.7 Residential Developer Electric Service Agreement S.8 Residential Electric Service Agreement S.9 Security Light Agreement 5.10 Street Light Agreement S.11 Service Requirements for Electric or Water-Commercial Developer/Builder S.12 Service Requirements for Electric or Water-Residential Developer S.13 Service Requirements for Electric or Water-Residential Home Builder/Owner 5.14 Temporary Electric Service Agreement S.15 Water Connection Permit PERSONNEL P.1 Employee Handbook P.2 Apprentice Programs P.2a Electric Apprentice Program (to be developed) P.2b Technical Apprentice Program (to be developed) P.2c Water Apprentice Program P.3 Clothing Policy P.4 Criteria for Clothing Replacement P.5 Conflicts of Interest Policy P.6 Drug Policy 74 P.7 Educational Assistance Policy P.8 Flexible Benefits Plan P.9 HIPAA Security Policy P.9a HIPAA Privacy Certification Form P.9b HIPAA Compliance P.10 Home Computer Purchase Assistance Policy P.11. Inventory Policy P.12 iPad and Tablet Device Guidelines P.13 Performance Metrics and Incentive Compensation Policy P.13a Performance Metrics and Incentive Compensation Score Card P.14 Personal and/or Credit Use &Security Policy P.14a Personal and/or Credit Use & Security Employee Responsibility Form P.15 Use and Disposal of Utility Property ADMINISTRATION A.1 Deposits & Related Services Policies A.2 Automatic Bill Pay for Budget Customers Policy A.3 Banner and Flag Policy A.4 Capital Asset Guide A.5 Cold Weather Rule Policy A.6 Customer Deposit Policy A.7 Customer List Procedure A.8 Emergency Closing Procedure A.9 Emergency Procedures Guide A.10 Financial Reserves Policy A.11 Investment Policy A.12 Identity Theft Prevention Program-Red Flags Rule A.13 LFG Tour Procedure A.14 Meter Testing Procedure A.15 Natural Gas,Line Damage Reporting Procedure A.16 Payment Arrangement A.17 Payment in Lieu of Taxes (PILOT) and Other Donations to the City of Elk River A.18 Privacy Policy A.19 Public Purpose Expenditure Policy A.20 Purchase Order Policy A.21 Records Retention Policy(to be developed) A.22 Returned Un-Paid Items Policy A.23 Standard Operating Procedures (to be developed) ELECTRIC E.1 Electric Department Rules-Operations and Maintenance Manual E.2 Distribution Reliability Standard E.3 Integrity Testing Policy E.4 Mid-Block Street Lighting 75 E.5 Mutual Aid Policy E.6 Pole Attachment Policy E.6a Pole Attachment Agreement E.7 Pole Disposal Policy E.7a Pole Disposal Agreement E.8 Pole Move Procedure E.9 Street Light Construction Standards E.10 Street Light Installation and Maintenance - Memorandum of Understanding E.11 Two-Way Radio Guidelines WATER W.1 Water Department Rules—Operations and Maintenance Manual W.2 Water Distribution System Maintenance Program W.3 Customer Contact for Water Meter Change-Out W.4 Fire Hydrant Use and Maintenance W.5 Looping Water Mains W.6 Payment of Private Water Line Connection and Repair Costs— Memorandum of Understanding W.6a Payment and Assessment of the Costs to Repair Private Utility Lines— City Policy (for reference only) W.6b Payment and Assessment of the Costs to Repair Private Utility Lines— City Ordinance (for reference only) W.6c Petition, Waiver and Agreement for Payment of the Cost of Repairs to Private Utility Lines W.7 Side Lot Easements W.8 Water Shut-Off Request W.8a Water Shut-Off- City Ordinance (for reference only) W.9 Water Use Restrictions W.9a Water Use Restrictions-City Ordinance (for reference only) W.10 Wellhead Protection Plan 76 44-- - i Elk River Municipal Utilities G.la -By-Laws of Water and Light Commission 1.0 Office of Commission A. The office of the Water and Light Commission, Village of Elk River, shall be in the Utility Office, Village of Elk River, Minnesota. 2.0 Meetings A. Regular Meetings of the Water and Light Commission shall be held without notice at 8:00 pm o'clock of the first Tuesday of each month at the office of the Commission. B. Special meetings of the Water and Light Commission may be called any time by the President or by any two Commissioners, to be held at the Commission's office or at such other place or places as the Commissioners may from time to time designate. C. Notice of all special meetings of the Water and Light Commission shall be given to each Commissioner by two (2) days' service of the same by telegram, by letter or personally. D. The Order of business of all Commission meetings shall be as follows: a. Roll call b. Reading of the minutes of the last meeting c. Reports of officers d. Unfinished business e. New business f. Adjournment 3.0 Quorum A. A majority of the Commissioners Elect shall constitute a quorum for the transaction of business, and the votes of a majority of the commissioners present, shall be sufficient to adopt any motion or resolution. The votes of members on any action shall be taken by ayes and no's and recorded in the minutes. 4.0 Water and Light Commission A. Under authority granted by the Laws of the State of Minnesota and subject to the limitations thereof, the Water and Light Commission shall have control, management and operation of all water and light plants and properties of the village of Elk River, 77 Minnesota, and shall do or cause to be done or authorize all things necessary for the proper execution of any power conferred upon the Water and Light Commission. B. The Commission shall act by resolution or vote of its members, or by its other duly constituted officers or agents acting within the scope of such authority as may be conferred upon them by resolution or vote of the Water and Light Commission or by these by-laws. C. At the first regular meeting of the Commission following the annual meeting of the Village Council for appointment of appointive officers, the Water and Light Commission shall choose a president and a secretary from its own number, and at a regular meeting as soon as practicable following the time at which a vacancy exits in either of such offices, the Commission shall choose one of its own number to such office as is vacant. Such officers shall hold office until their successors are chosen and quality in their stead. D. The Water and Light Commission by resolution, shall appoint a superintendent, an accountant, who shall be the collector, and other such officers as are required by charter provisions, when vacancies exist in such offices and, further, may appoint other officers and agents as it shall deem necessary, who shall hold their offices for such term and shall exercise such powers and perform such duties as shall be determined from time to time by the Commission. E. The Water and Light Commission, upon recommendation of the Superintendent and the filing of applications, shall appoint all employees of the Water and Light Commission. F. In the case of absence or inability to act of any officer of the commission and of any such person herein authorized to act in his place, the commission may from time to time delegate the powers or duties of such officer to any other officer, or any Commissioner or other person whom it may elect. G. No compensation shall be paid any member for services as present, secretary, or other services which may be rendered. a. Each member shall be entitled to be reimbursed for his actual and necessary traveling and hotel expenses incurred whenever it shall be necessary for him to travel outside the Village of Elk River in carrying his duties pertaining to the water and light properties, which travel may be required of him by law or by vote or resolution of the Water and Light Commission b. The compensation of members and amounts due them as reimbursement for expenses shall be paid at the end of each month upon itemized statements duly verified. Such payment and reimbursement shall conform as to manner of payment as required by laws of the State. H. Any officer, agent or employee elected or appointed by the Commission may be removed at any time by the Commission. 78 I. The salaries of all officers, agents and employees of the commission shall be fixed by the Commission. J. The president shall preside at all meetings at which he is present. He shall make such reports to the Council as are required of the Commission and shall perform such other duties as are incident to his office or are properly required of him. K. The Secretary shall be the Superintendent of the Water and Light Department and shall do or cause to have done by other officers and agents the following: a. To act as Secretary of all Commission meetings and to record and sign all minutes of meetings of the commission. b. To Cause to have kept safely and systematically all books, records, files, and papers of the Commission. c. To sign, execute or acknowledge with the President of the commission all instruments authorized by the Commission. d. To cause to be presented at the beginning of each month to the Council upon carefully prepared vouchers, all bills for labor and material previously obtained or purchased by the board, which have been examined and approved by the Commission, for allowance and payment. e. To cause to be prepared all annual and monthly statements as may be required or as directed by resolution of the Commission. f. To see that all notices are duly given in accordance with the provisions of these by-laws or as required by law. g. To perform such other duties as may be prescribed from time to time by the Commission or as are incident to his office. 5.0 Appointive Officers of Water and Light Commission A. Superintendent a. The Superintendent shall be the chief executive officer of the Water and Light Commission. He shall be chosen by the Commission solely on the basis of his executive, and administrative qualifications for the supervision and direction of all operations and business of the Water and Light properties. He need not, when appointed, be a resident of the Village. All other things being equal, the Commission shall appoint as Superintendent a person with experience in the construction, operation and management of public utilities. No member of the Commission shall, during the time for which appointed or within one year thereafter, be chosen as Superintendent. No person shall continue to hold the position of Superintendent for a period longer than six months if related as a father, brother, uncle, cousin or nephew by blood or marriage, to any member, 79 officer or employee of the Water and Light Commission. In case of absence or disability of the Superintendent, the Commission shall designate some qualified person to perform the duties of the office during such absence or disability. b. The Superintendent shall be Secretary of the Water and Light Commission and shall perform all the duties of the Secretary as so instructed. c. The Superintendent shall have full charge and control of the construction of all work under the jurisdiction of the Commission, the maintenance and operation thereof, and the administration of the business affairs of the Commission. All officers, employees, and agents when appointed by the Water and Light Commission, shall be under the immediate control and management of the Superintendent. d. The powers of the Superintendent shall be: i. To see that these by-laws and all rules and regulations of the Commission are enforced. ii. To see that the operation, construction and maintenance of the Water and Light properties conform to all provisions of the laws of the State. iii. To see that all supplies and materials are purchased according to procedure as prescribed by the State laws. iv. To attend all meetings of the Water and Light Commission, to submit reports of the affairs of the Water and Light Commission, and to participate in the discussion of all matters coming before the Commission. v. To keep the Commissioners advised as to the financial condition and future needs of the water and light utilities, and to prepare and submit an annual budget. vi. To prepare or cause to be prepared, all plans and specifications for the construction of the works of the Commission. vii. To devote his entire time to the business of the Commission viii. To perform such other and additional duties as the Commission may require. ix. To prepare or have prepared for presentation to the Commission for its consideration and approval, rules and regulations as follows: 1. Information and requirements for electrical service 2. Information and requirements for water service 80 3. Management policy in relation to employees 4. Manual of accounting instructions B. Accountant a. An Accountant, with such title and who shall perform the duties of the Collector and Bookkeeper, shall be chosen by the commission on the basis of his qualification to perform the duties of such office. This accountant shall also be the Deputy Treasurer of the village of Elk River. b. The Accountant, as Collector, under the direction of the Superintendent, shall collect and pay forthwith into the Treasury, all moneys due on account of the operations of the water and light properties, and all money which may come into his hands belonging to the Village. The accountant shall give all notices as required by these by-laws, and as required of the Collector by the State laws or as may be set forth in all rules and regulations as approved, from time to time, by the Commission. c. The Accountant shall have charge of, under the supervision of the Superintendent, all office employees. C. All other appointees and employees of the commission shall be required to pass such tests as may be prescribed form time to time by the Commission. No person shall be employed by the Commission in doing any work unless he holds a certificate of registration or license that would be required form the State to do such work when done on private property or for private business. D. The duties of such appointees and employees shall be prescribed form time to time by the Superintendent with approval of the commission. 6.0 Certain Rules,Regulations and Procedure of Water and Light Commission A. Accounting a. The books and accounts of the Water and Light Commission shall be kept in so far as practicable in conformity with the uniform systems of accounts as prescribed by the Federal Power Commission and as set up by Messrs. Ernst and Ernst. Accountants and Auditors. b. In keeping such books and accounts, the electric system accounts shall be administered as separate accounting units. c. In keeping such books and accounts, the water system accounts shall be administered as separate accounting units. 81 B. Rates a. General i. The Commission shall fix rates for electrical energy and water service to the ultimate consumer without discrimination between consumers of the same class, and no rate shall be charged or practice adopted which will grant a discriminatory rate, rebate or other special concession to any consumer served by the Water and Light Commission. It is specifically understood that the water department is a consumer of the electric department within the meaning of this section. b. Electric Rates i. The Commission shall fix such rates for electricity furnished to consumers as will secure revenues sufficient to pay all salaries and wages of all officers and employees in the electric department; to cover the cost of all materials and supplies used in operation of the plant; to cover the interest charges upon all indebtedness of the Village created for the purpose of purchasing, improving and extending the electric lighting plant, and to provide a sinking fund sufficient for the purpose of paying off such indebtedness at maturity; and to cover the following annual appropriations. c. Water Rates i. The Commission shall fix such rates for water furnished to consumers as will secure revenues sufficient to pay all salaries and wages of all officers and employees in the water department; to cover the cost of all materials and supplies used in the operation of the plant; to cover the cost of all repairs; to cover all miscellaneous expenses; to pay all interest charges upon all indebtedness of the Village created for the purpose of purchasing, improving or extending the electric lighting plant, and to provide a sinking fund sufficient for the purpose of paying off such indebtedness at maturity; and to cover the following annual appropriations. C. Electric Rules and Regulations a. The Commission shall adopt and amend, from time to tie, rules and regulations pertaining to electric service to consumers and customer relations. Such rules and regulations shall prohibit the commission and its employees from servicing customer equipment on customers' premises except for the installation and maintenance of its property; however,the Commission may make an allowance to a customer installing and electric range or water heater to defray the cost wholly or in part for wiring for such installation. D. Water Rules and Regulations 82 a. The Commission shall adopt and amend, from time to time, rules and regulations pertaining to water service to consumers and customer relations. Such rules and regulations shall specifically provide that no person except the tappers employed by the Commission, or persons in their service duly approved, will be permitted to tap any distributing pipe, or insert stop-cocks or ferrules therein in and that the Commission shall not install or maintain the service to any customer. E. Policy as to Employees a. The Commission shall adopt and amend, from time to time, rules and regulations in respect to labor and employment policy and thereupon publish. In the selection of employees of the department, the fullest preliminary information, including a birth certificate, shall be submitted to the Commission prior to consideration for employment by the commission. The Commission shall require that all present employees submit comparable information, including a birth certificate, to the Commission b. Selection of or appointment to the service of the Commission will not be made when such appointments involve nepotism as defined by the Commission. c. All appointments and promotion shall be made on merit. In the positions or employments, comparable to private employment which require certificates of registration under the statues, State of Minnesota, all appointees and present employees shall be required to hold a certificate of registration. F. Application of By-Laws a. In the event that any provision of these by-laws is or may be in conflict with any law of the United States, of the State of Minnesota, of the Village of Elk River, Minnesota, or of any other governmental body or power having jurisdiction over this Commission or over the subject matter to which such provision of these by- laws applies or may apply, such provision of these by-laws shall be inoperative to the extent only that the operation thereof unavoidably conflicts with such law and shall in all other respects be in full force and effect. 83 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: AUTHORITY AND Title: ORGANIZATIONAL CORE PURPOSE GI PURPOSE Date of Adoption: Policy Reference: G.1 b Purpose: The purpose for organizational initiatives and goals is to produce desirable results. In order for any organization to be effective and maintain sustainable success, the organization must define its organizational core purpose. This core purpose then becomes the basis for establishing the criteria from which results and organization success are measured. Just as the economy, industry, and community evolve and change, the organizational core purpose must also evolve and change. The organization must establish and maintain a review process of their organizational core purpose for sustainable success. With this policy, the Commission commits that it will govern as a body in a manner consistent with adopted mission statement, vision statement, organizational values, and organizational fundamentals. The Commission will also commit to govern as a body through policy development and initiative prioritization which are in alignment with adopted planning themes. The Commission acknowledges the importance for the development and support of mission statement, vision statement, organizational values, organizational fundamentals, and planning themes to achieve the following: an environment of transparency; creates a clear line of sight from tasks through goals; and helps create a work environment for meaningful work providing value to the community. The Commission also commits to engage in the ongoing review process for the organizations core purpose to maintain organizational effective and sustainable success. Policy: The Commission will adopt and maintain relevant and sustainable organization core purpose documents including mission statement, vision statement, organizational values, organizational fundamentals, and planning themes. The Commission will govern ERMU in a manner consistent with these adopted documents outlining the organization's core purpose. And, the Commission will review and update these documents as necessary at a minimum of once every five years through engaging with management and staff in a strategic planning process. Elk River Municipal Utilities 84 DRAFT POLICY (2.14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: AUTHORITY AND Title: MISSION STATEMENT G1 PURPOSE Date of Adoption: Policy Reference: G.1 c Purpose: One of the key components in establishing an organizational core purpose is the development and ongoing support of a relevant mission statement. Through the development, adoption, and ongoing support of an organizational mission statement, the Commission establishes a guiding statement to communicate both internally and externally the day to day purpose for the organization's existence. The mission statement then plays an important role in development of policies and programs and serves as a guide for effective governance and operations. Policy: The Commission adopts and commits to govern in a manner consistent with the following mission statement: Provide our customers with safe, reliable, cost effective and quality long term electric and water utility service. To communicate and educate our customers in use of utility services, programs, policies, and future plans. These products and services will be provided in an environmentally and financially responsible manner. Elk River Municipal Utilities 85 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: AUTHORITY AND Title: VISION STATEMENT GI PURPOSE Date of Adoption: Policy Reference: G.ld Purpose: Similarly to an organizational mission statement, a vision statement is a key component in establishing an organizational core purpose. Through the development, adoption, and ongoing support of an organizational vision statement, the Commission establishes a guiding statement to communicate both internally and externally where the organization aspires to be. The vision statement then plays an important role in inspiring the employees to engage and help support the organization in achieving their goals. The vision statement also plays an important role in providing transparency in policy development and organization initiatives to the customers and the public. Policy: The Commission adopts and commits to govern in a manner consistent with the following vision statement: Provide exceptional services and value to those we serve. Elk Rivert Municipal Utilities 86 DRAFT POLICY (2.14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: AUTHORITY AND Title: ORGANIZATIONAL VALUES GI PURPOSE Date of Adoption: Policy Reference: G.1 e Purpose: Governance and leadership style set tone for organizational culture. With this policy, the Commission acknowledges the importance for establishing expectations for organizational values to guide policy development and organizational behavior. Policy: The Commission adopts, established as an expectation of organization operational behavior, and commits to govern in a manner consistent with the following organizational values: Value 1: Integrity—Honest and accountable; United. Value 2: Quality—Excellence, dependability, and with expertise. Value 3: Communicate— Open, engaged, timely, and respectful. Value 4: Safety—Encourage and maintain a culture of safety. Value 5: Competitive— Provide the best value in the services we deliver. Elk River Municipal Utilities 87 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: AUTHORITY AND Title: ORGANIZATIONAL FUNDAMENTALS GI PURPOSE Date of Adoption: Policy Reference: G.lf Purpose: The foundation to a building provides the structure stability to support the many components of the building, each of which service for different functions and combine to provide value and meaningful purpose. Similarly, organizational fundamentals serve as foundational concepts on which to build a company. These organizational fundamentals then align with and provide support and guidance for achieving the mission and vision of the organization. Policy: The Commission adopts and commits to govern in a manner consistent with the following organizational fundamentals: Fundamental 1: Safety, Reliability, and Quality of Utility Services. Fundamental 2: Customer Service and Employee Development. Fundamental 3: Financial and Organizational Health. Elk River Municipal Utilities 88 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: AUTHORITY AND Title: PLANNING THEMES GI PURPOSE Date of Adoption: Policy Reference: G.1 g Purpose: Providing transparency and clear connect between the organizational mission and vision to initiative and task is an important leadership guide to making sure resources are contributing towards meaningful work. Line of sight between mission and task also helps to create a positive work environment where employees can identify the value of their efforts in achieving the organizational goals. Planning themes are used to prioritize initiatives, schedule and budget required resources, and create a clear line of sight between mission and task. With this policy the Commission acknowledges importance of planning in a manner consistent with the organizational mission and vision such that the organizations resources are being used responsibly for meaningful work. Policy: The Commission adopts and commits to govern in a manner consistent with the following planning themes: Theme 1: Communication— Improve the effectiveness of our communications inside the organization, with our customers, and with the community. Theme 2: Personnel and Governance—Develop our most valuable and vulnerable assets....our commissioners, employees, leaders, and future leaders. Theme 3: Strategic Thinking— Create a culture of strategic thinking and ensure line of sight from mission to vision. Theme 4: Technology— Implement the prudent use of technology to improve efficiency and increase customer choice, communication, and value. Theme 5: Growth—Assess the growth curve to make decisions regarding organizational change. Theme 6: Process, Measurement, and Financial Health— Improve processes and measurement to better determine and report efficiency and effectiveness of organization and to ensure financial and organizational health. tElk River Municipal Utilities 89 DRAFT POLICY (2.14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: COMMISSION PURPOSE G2 Date of Adoption: Policy Reference: G.2 Purpose: With this policy, the Commission commits that it will govern as a body that understands its corporate obligations to the owners and other stakeholders of the ERMU electric and water utility enterprises. Policy: The Commission's principal purpose is to ensure that ERMU achieves appropriate results (See Results Policies) for its owners, customers, employees, and other stakeholders at an appropriate cost, while avoiding unacceptable actions and situations. Elk River Municipal Utilities 90 DRAFT POLICY (02-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE G2 Title: COMMISSION-CITY COUNCIL RELATIONSHIP AND ROLES Page 1 of 2 Date of Adoption: Policy Reference: G.2a Purpose: With this policy, the Commission describes its role in relation to the Elk River City Council and the way in which it desires to interact with the City Council. Legal Authority: As established by Minnesota Statutes Chapter 412, the Commission has complete and sole control, authority and jurisdiction over ERMU except that the City Council appoints each member of the Commission and has its own designated representation on the Commission per: resolution dated July 11, 1947; resolution 16-83 dated December 5, 2016, approving the laws of Minnesota 2016, Chapter 97 — House File Number 2718; and ordinance16.27 amending city code regarding membership of the Public Utilities Commission of the City of Elk River, Minnesota. Policy: The Commission and the City Council share the responsibility for ensuring effective governance of ERMU for the benefit of the City, its citizens, and ERMU's utility customers. The Commission desires to maintain a working relationship with the City Council that will enable both bodies to coordinate and carry out their separate responsibilities so that ERMU is governed with excellence. Although governed autonomously by the Commission, ERMU is part of the City of Elk River's City government. The intent and purpose of separate governance, as authorized by state statute, is to enable the operation of the City's utility enterprises in a business environment rather than in the environment of general city government. This creates opportunities for bringing greater value to the stakeholders of both the City and ERMU through a hybrid of private and public governance and management practices. It is the intent of both the Commission and the City Council to align their respective governance structures and processes in ways that will realize these opportunities for greater value. Consistent with the preceding, the Commission will not fail to: Elk River Municipal Utilities 91 DRAFT POLICY (02-14-17) 1. Routinely monitor, evaluate, and strive to improve its performance, keeping the City Council informed in a thorough and timely manner about the effectiveness of the Commission's governance with respect to the following: a. Compliance with legal and fiduciary responsibilities; b. Compliance with Commission-established Governance policies that are periodically reviewed and updated, and that set expectations for ERMU's strategic and business results, governance, and management; and c. The employment, working relationship with, and performance of a qualified and competent General Manager who is expected to manage ERMU in compliance with applicable Commission policies. 2. Support ERMU's active participation in the City's Economic Development Authority (EDA), representing the interests of ERMU's stakeholders and working to develop common goals for economic development. 3. Provide an opportunity for the City Council to meet jointly with the Commission no more often than annually but at least once every three (3) years. The meeting will be held in the second quarter of the year following completion of the annual independent financial audit. The focus of this joint meeting will be a report by the Commission to the Council of ERMU's financial and operating results for the preceding fiscal year, along with an opportunity for the Council to provide input to the Commission on matters related to planning and budgeting for the next fiscal year. The Commission may request or recommend additional joint meetings for other specific purposes. 4. Develop, update as necessary, and provide to the Mayor and City Council documentation that is intended to ensure the appointment of qualified and committed ERMU Commissioners. Such documentation will include relevant knowledge and experience, core competencies, and character traits that are consistent with the Commission's requirements and commitments to effective governance. The Commission's expectation is that the City Council will use this information to appoint persons who are appropriately qualified and well- informed about the expectations for service as a Commissioner. 5. At least annually at the time of budgeting for the next fiscal year, consider ERMU's financial condition with respect to voluntary payments in lieu of taxes (PILOT) and other donations of services from the ERMU utility enterprises to the City that are likely to have material financial consequences for both entities. The Commission will inform the City Council promptly of any material changes in the PILOT and other donations. Further, the Commission will use a process for determining PILOT and other financial donations to the City that is transparent, consistent with state and national benchmarking comparisons, forecasted and budgeted, and with a mutually understood methodology. In approving or allowing other donations such as labor, street lighting, and water for fire suppression, the Commission will subscribe to the philosophy that it is providing value to the community and not just shifting costs from one entity to the other. Elk Rive* Municipal Utilities 92 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: COMMISSION AUTHORITIES AND G2 REPSONSIBILITIES Date of Adoption: Policy Reference: G.2b Purpose: With this policy, the Commission acknowledges that its authorities and responsibilities derive from State of Minnesota Statutes Chapter 412 with respect to incorporation, Commission structure and composition, and exercise of corporate powers by the Commission in the operation of ERMU's electric and water utilities. Policy: The Commission will govern ERMU for the purposes enumerated in its enabling legislation and policies, exercising its authorities within the limits established by law. The Commission will review from time to time and, if necessary, revise its governance policies and By-laws to be consistent with each other, with any applicable changes in the law, and with current accepted municipal utility enterprise and business practices. Elk River Municipal Utilities 93 DRAFT POLICY (2-2-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: GOVERNING STYLE G2 Date of Adoption: Policy Reference: G.2c Purpose: With this policy, the Commission intends to establish and articulate an institutional philosophy and approach that will enable it to govern with excellence. Policy: Commission Members, individually and collectively, will act in ways that visibly demonstrate the ERMU style of governance. Commission members will lead proactively and the Commission will enforce upon itself the discipline needed to govern effectively and consistently. Consistent with the preceding general statements: 1. The Commission will guide and inspire Management and staff employees toward a strategic vision through the thoughtful and proactive development of written policies that express clear expectations and shared accountability for results. 2. The Commission's policies will reflect its role as trustee, effectively meeting its fiduciary responsibilities while representing and balancing the sometimes competing interests of customers, the ERMU utility business enterprises, the City of Elk River, ERMU employees, and others who may be affected, either directly or indirectly, by ERMU's decisions and actions. 3. The Commission will govern ERMU as the significant business enterprise that it is, enabling ERMU to provide quality services to its customers and prudent financial contributions to the City, while responsibly managing and sustaining its physical assets and financial resources. 4. The Commission, with support from the General Manager, will set its own agenda for governance and, to the greatest extent practical, will initiate its own policies. The Commission will consider and adopt policies in accordance with its stated "Principles for Policy Development." The Commission will routinely review, evaluate and update its policies, as necessary. 5. By adopting and enacting its policies, the Commission will create and sustain a governance structure and processes in which the respective roles and accountabilities of Elk River Municipal Utilities 94 DRAFT POLICY (2-2-17) the Commission and Management are clearly delineated, understood, and mutually supported. 6. The Commission will promote a sense of partnership, trust, and mutual respect among its individual members, with ERMU Management and staff employees, and with customers, City, and community interests to provide value to all stakeholders. 7. The Commission will establish and use a variety of methods to promote two-way communications and dialogue about ERMU's future direction, accomplishments, and major challenges among its stakeholders. 8. The Commission will support the development of a values-based organization with high standards of professional conduct, interpersonal behaviors, and self-accountability for results. 9. The Commission will encourage mutual respect, open dialogue and expression of diverse viewpoints among Commission members and Management; the Commission will acknowledge and effectively handle disagreements, working toward consensus in its deliberations and decisions. 10.The Commission will support the hiring and retention of a capable General Manager, who will be responsible to the Commission for the management and operation of ERMU's utility businesses. The Commission will also support the General Manager in creating an organization which attracts and retains capable management and staff employees, and develops leaders. 11.Commission members will devote appropriate attention, time and energy to govern effectively. They will understand their responsibilities and take advantage of opportunities for continuing education and development that improve their governance capabilities. 12.The Commission will seek to create a reputation that attracts qualified and dedicated persons to become Commission members. It will do this by building public understanding of its governance role, as well as the commitments and contributions of its individual members. 13.The Commission will periodically evaluate and discuss its policies and the performance of the ERMU organization in relation to those policies, with particular attention to the needs and expectations of its various stakeholders. Elk River Municipal Utilities 95 DRAFT POLICY (02-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: AGENDA PLANNING G2 Date of Adoption: Policy Reference: G.2d Purpose: With this policy, the Commission establishes its expectations for a proactive governance process, expressed in terms of a forward-looking two year agenda of recurring governance functions. The Commission also establishes the process for determining the agenda for each regularly scheduled Commission meeting. Policy: The Commission, with support from the General Manager, will prepare, distribute, and follow a governance agenda that spans two successive fiscal years. The Commission will update this agenda annually during the fourth quarter of each fiscal year by removing the current year, updating the next year, and adding the following year. The Commission will review the agenda as a part of each regular Commission meeting. The Commission's governance agenda will include a schedule of its recurring governance functions by month to facilitate the preparation of meeting agendas and the conduct of regular and special Commission meetings. Recurring governance functions include but are not limited to the following: consideration of stakeholder interests, policy review and development, strategic planning, approval of financial and business plans including budgets, organizational performance monitoring, internal and external audit reviews, General Manager performance planning and evaluation, governance evaluation and development, Commission Officer election, and committee appointments. The Commission will keep its two-year governance agenda up-to-date and available to all Commission members, the Commission's Legal Counsel, and the General Manager. The General Manager, with direction from the Commission, will also prepare and distribute, in a timely manner, a detailed agenda that provides for open communications and the orderly and efficient conduct of each regular Commission meeting, special Commission meeting and Commission work session. Agendas for regular Commission meetings will address items from the two-year governance agenda, Commission actions required by law, and other appropriate business matters. Agendas for special Commission meetings and Commission work sessions will typically focus on a limited number of specific items that are best handled in those types of meetings. Elk River ...... Municipal Utilities 96 DRAFT POLICY (02.14-17) ERMU Commission Policy No. G-2d Agenda Planning Page 2 of 3 Consistent with the preceding: 1. During the first quarter of each fiscal year (January- March): 1.1.The Commission will elect officers at its March meeting, following the appointment of Commissioners by the City Council. 1.2.The Commission and Management will review ERMU's current Strategic Plan along with the results of the Annual Business Plan for the preceding fiscal year. 2. During the second quarter of each fiscal year (April-June): 2.1.The Commission will consider and approve the external audit report as specified in the Governance Calendar. 2.2.The Commission and Management will evaluate the Performance Matrix for the preceding fiscal year. 2.3.The Commission will formally evaluate the performance of the General Manager. 2.4.The Commission and Management will begin its annual update of the Strategic Plan and Financial Plan for the succeeding five-year period. 3. During the third quarter of each fiscal year (July-September): 3.1.The Commission will formally evaluate its own performance. Following this evaluation, the Commission, with the support from the General Manager, will arrange for governance education for the next fiscal year, including education related to the determination of desired results. 4. During the fourth quarter of each fiscal year (October- December): 4.1.The Commission will review and approve Management's proposed five-year Capital Improvement Plan as well as its proposed Annual Business Plan with budget and rates for the next fiscal year. 4.2.The Commission, in conjunction with Management, will determine the stakeholder communications plan and schedule for the next fiscal year. 5. The Commission will direct the General Manager to prepare and distribute the agenda for each regularly scheduled meeting as follows: 5.1.The Commission Chair and the General Manager will discuss, at least monthly, approximately seven (7) days in advance of each regularly scheduled Commission meeting to develop a tentative agenda, including any items to be discussed in closed session. 5.2.The tentative agenda and meeting packet of supporting materials will be distributed to Commission members and others approximately three (3) days in advance of the Commission meeting. Presentations and supplemental information items may be provided at the Commission meeting, Elk River .Y. Municipal Utilities 97 DRAFT POLICY(02-14-17) 5.3.The General Manager will ensure the posting of a meeting notice, along with the tentative agenda, in compliance with applicable law. 5.4.Any Commission member or the General Manager may request additions, deletions or other changes to the agenda at the beginning of a regular meeting when the Commission Chair requests approval of the tentative agenda. Items requiring research or other advance preparation should be suggested for future meeting agendas. No items may be added to the agenda of special meetings and work sessions. 5.5.Agendas for regular Commission meetings will be prepared in a consistent format as shown in the most current version of the Commission's "Model Agenda". Agenda items will be categorized by their nature, specifically identifying in order items that are presented (a) for Commission action at the present meeting; (b) for Commission action at a future meeting; (c) as information for monitoring policy compliance; (d) for policy review and development; (e) as information for monitoring performance; and (f) as general information for business context, management updates, or education. Each agenda also includes an item category designated as "Other Business" to provide additional flexibility for discussion of matters not specifically contemplated in advance or for agenda items that do not require Commission action and do not conform to any of the predetermined categories. Each agenda also includes an open forum time for public participation. 5.6. Items for Commission action at a regularly scheduled meeting may be identified as "consent action" or "discussion and action". "Consent action" items are presented for Commission action all together and without discussion. A Commission member may request before the motion to approve the "consent action" items that any item(s) placed as "consent action" be changed to "discussion and action". 5.7.Commission members are expected to ask questions and make suggestions about an agenda item by communicating with the General Manager as soon as practical after receiving the tentative agenda. The agenda for each regularly scheduled meeting will include an item titled "Future Planning" during which time any Commission member or the General Manager may discuss and suggest items for placement on future meeting agendas. 5.8.The Commission prefers to introduce important decision items on the agenda at least one meeting before the meeting at which a decision is required. This is a preference but not a requirement. 5.9.The Commission will include monitoring of the General Manager on a meeting agenda if monitoring reports show policy violations, or if policy criteria are to be debated. Elk River Municipal Utilities 98 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: COMMISSION MEMBER ROLE, G RESPONSIBILITIES, AND ORIENTATION Page 1 of 2 Date of Adoption: Policy Reference: G.2e Purpose: With this policy, the Commission describes the role and responsibilities of ERMU Commission members when acting in their capacity as a Commission in accordance with applicable law. The Commission also establishes its expectations for the orientation of new Commission members. Policy: The Commissioners of ERMU are trustees, acting in the interests of customers, employees and other stakeholders. ERMU stakeholders expect the Commission to make policy decisions that ensure appropriate organizational performance as set forth in the Commission's adopted Vision, Core Purpose, Mission, and Core Values. Consistent with this general statement: 1. The Commission will continuously create and enhance connections between ERMU and its stakeholders. 2. The Commission will produce, maintain and use written governing policies that, at the broadest levels, address each of the following categories of deliberation and decision-making. Authority and Purpose: Policies that recognize the Utilities' and Commission's right to exist, and authorities and policies to define organizational core purpose. Governance: Policies that specify how the Commission conceives, carries out and monitors its own tasks. Commission-Management Connection: How organizational authority is delegated, its proper use is monitored, and the General Manager is accountable for ERMU's performance. Delegation to Management: Limitations on executive authority that establish the prudence and ethics boundaries within which all executive activity and decisions must take place. Results: ERMU's outcomes, impacts and benefits. 3. The Commission will measure and evaluate the General Manager's performance against its Results and Delegation to Management policies. Elk River Municipal Utilities 99 DRAFT POLICY (2-14-17) ERMU Commission Policy No. G.2e Commission Member Role Page 2 of 2 4. Commission members will perform their fiduciary responsibilities to protect and enhance the value of ERMU, exercising due diligence and using sound business judgment consistent with ERMU's enabling legislation and other applicable laws. 5. The ERMU Commission of Directors is committed to excellent governance. This requires that individual Directors be well-informed about ERMU, its customers and stakeholders, the utility business, prudent financial management, and the Commission's own governance structure and processes. Consistent with this commitment and Commission policies, the ERMU Commission will develop, implement and maintain current a formal orientation program for new Commission members. Elk River M Municipal Utilities 100 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: COMMISSION MEMBER CONDUCT G2 Date of Adoption: Policy Reference: G.2f Purpose: With this policy, the Commission establishes its expectations for the ethical conduct and performance of ERMU Commission members. Policy: The ERMU Commission commits itself to ethical, diligent, businesslike, and lawful conduct, including proper use of authority, performance of responsibilities, and appropriate good behavior. Consistent with this general statement: 1. Commission members are expected to be present at all regular and specially called meetings of the Commission and any Commission committees to which they are assigned. 2. Commission members will properly prepare themselves to perform their assigned duties as Commission officers and members, and for effective Commission deliberation, decision-making, and representation in advance of all assigned meetings and other Commission-approved and Commission-related activities. 3. Commission members must, at all times, represent the interests of ERMU and its stakeholders. This accountability supersedes any conflicting loyalty such as elected office, advocacy to a personal cause or interest groups, and membership on other Commissions or employment in other organizations. 4. Commission members may not attempt to exercise individual authority over the organization except as explicitly set forth in Commission policies. A. A Commission member's interactions with the General Manager or with staff must reflect that there is no authority vested in individual Commission members except when explicitly authorized by the Commission. B. A Commission member's interactions with public, media or other entities must reflect the preceding limitation and the inability of any Commission member to speak for the Commission except to repeat explicitly stated Commission decisions or actions already taken. Elk River Municipal Utilities 101 DRAFT POLICY (2-14-17) ERMU Commission Policy No. G.2f Commission Member Conduct Page 2 of 3 C. Commission members will not make individual judgments of the General Manager or staff performance, except through the process established by the Commission's policy on Annual Evaluation of the General Manager. 3. Individual Commission members will never lead the public, media or staff to have the belief that the General Manager or any staff member is out of compliance with Delegation to Management Policies unless the Commission has made a formal determination of non-compliance. 4. Commission members will respect the confidentiality that is appropriate to issues and information of a sensitive nature. 5. Commission members will avoid any situation in which they stand to benefit individually through financial gain or influence. If such situations cannot be avoided, Commission members will disclose any known or potential conflicts, excuse themselves from any meeting during those times when the matter causing the conflict or potential conflict is under consideration, and abstain from any voting on the matter. 6. Depending on the circumstances, a Commission member may disclose any known or potential conflict to the Commission Chair, the General Manager, or ERMU's Legal Counsel. Legal Counsel will be available to advise the Commission, individually or collectively, about potential conflicts. Generally, an individual Commission member will first approach the Commission Chair or the General Manager about a potential conflict. Legal Counsel is also available to advise individual Commissioners in confidence about potential conflicts. 7. In support of ERMU's standards of high ethical conduct, Commission members WILL NOT: A. Deceive, defraud, or mislead other ERMU Commission members, management, or staff members or those with whom ERMU has business or other relationships. B. Misrepresent ERMU in any negotiations, dealings, contracts, or agreements. C. Divulge or release any information of a confidential or proprietary nature relating to ERMU's purpose, mission, plans, business strategies, or operational databases D. Use ERMU property, financial resources, or services of ERMU personnel for personal benefit. E. Obtain a personal advantage or benefit through the use of ERMU's name, either directly or through relationships established by the General Manager, another Commission member, or any staff member. F. Accept individual gifts of any kind in connection with the Commission member's relationship with ERMU. Elk River Municipal Utilities 102 DRAFT POLICY (2-14-17) ERMU Commission Policy No. G.2f Commission Member Conduct Page 3 of 3 G. Withhold their best efforts to perform their duties to acceptable standards. H. Engage in unethical business practices of any type. I. Violate any applicable laws or ordinances. Elk River Municipal Utilities 103 DRAFT POLICY (02-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: COMMISSION OFFICER ROLES, G2 RESPONSIBILITIES & SUCCESSION Page 1 of 3 Date of Adoption: Policy Reference: G.2g Purpose: With this policy, the Commission communicates the functions for which ERMU's officers are accountable and the limits of authority that the Commission delegates to its officers. Policy: The offices of the ERMU Commission include a Chair, a Vice-Chair, and a Secretary. The Commission elects the Chair and Vice Chair to one-year terms each year during its regular meeting in the month of March. An officer's term begins that day and expires without action of the Commission upon resignation or death of the officer or upon failure of the officer to comply with the criteria necessary to hold the office. An officer's term is extended without action of the Commission until a successor is duly elected. Any Commission member is eligible for office at any time; however, a Commission member nominated for the position of Chair will normally have served at least one term as Vice-Chair. The office of Secretary is held by the General Manager; however, the General Manager may appoint another employee as Secretary, with the concurrence of the Commission. Chair The Chair is accountable to the Commission for the integrity of the Commission's governance process. The Commission authorizes the Chair to call and schedule special meetings, set its meeting agendas, preside over its meetings and, with limitations, represent the Commission to outside parties. The Commission expects the Chair to set and maintain a friendly and productive tone for all meetings, encouraging full participation of all Commission members, effective deliberation and decision-making, and constructive resolution of disagreements. More specifically: 1. The expected result of the Chair's function is that the Commission behaves in a manner that is consistent with its own policies and in full compliance with those obligations that others, with legitimate authority, impose on it from outside the organization. The Chair, by planning the Commission's governance and meeting agendas will ensure that the Commission addresses those matters which, according to Commission policy, clearly belong to the Commission to determine, not to the General Manager. The Chair, by presiding over Commission meetings, will ensure that deliberation and decision-making at Commission meetings will be fair, open, and thorough, but also timely, orderly, and to the point. Elk River Municipal Utilities 104 DRAFT POLICY (02-14-17) ERMU Commission Policy No. G.2g Commission Officer Roles Page 2 of 3 2. The authority of the Chair is limited to Commission decision-making that falls within areas covered by Commission policies on Governance and Commission-Management Connection, except where the Commission specifically delegates portions of this same authority to others. The Commission authorizes the Chair to use any reasonable interpretation of the provisions in these policies in the discharge of duties. A. The Commission empowers the Chair to call and schedule all special meetings, set all meeting agendas, and preside over all Commission meetings with all of the commonly accepted power of that position (e.g., Ruling, recognizing, handling disagreements and unacceptable behaviors, etc.). B. The Commission empowers the Chair, exercising reasonable discretion, to control the conduct of all meetings. This includes, but is not limited to, determining the time to be devoted to any particular matter before the Commission, whether any person in attendance may address the Commission on any subject and the order or duration of any presentations or comments permitted, closure of discussion on any matter before the Commission, and expulsion of any person whose conduct is disruptive. The Commission may, by a motion and majority vote of the Commissioners present, overrule the Chair on decisions related to the conduct of meetings. C. For purposes of meeting management, the Commission adopts the Rules contained in the current edition of Robert's Rules of Order Newly Revised for all situations to which they are applicable and in which they are not inconsistent with ERMU's bylaws, policies and any special rules of order that the Commission may adopt. D. The Commission authorizes the Chair to execute official documents on its behalf. E. The Commission empowers the Chair to organize the work of the Commission, and to assign specific tasks to Commission members and to Committees established by the Commission. Specifically, the Commission empowers the Chair to schedule and coordinate the annual process for performance planning and evaluation of the General Manager. F. The Chair has no authority to make decisions about policies created by the Commission within the Results and Delegations to Management policy areas. As a result, the Chair has no authority to supervise or direct the General Manager. G. The Chair may represent the Commission to outside parties in announcing Commission- stated positions and in stating decisions and interpretations of Commission policy within the areas delegated by the Commission. The Chair will report to the Commission, as soon as practical, any communications made on behalf of the Commission. Representation of the Commission to outside parties is subject to the following limitations: (1) Communications must be consistent with ERMU's core purpose, core values, and mission, and with the role and authority of the Commission as set forth by Commission policies. Elk Rive* Municipal Utilities 105 DRAFT POLICY (02-14-17) ERMU Commission Policy No. G.2g Commission Officer Roles Page 3 of 3 (2) Communications must, as far as practical, represent the collective wisdom or position of the Commission. (3) Communications must be limited to deliberations already conducted, actions taken, or decisions made. Communications must not be speculative in nature. H. The Chair may delegate the authority granted in this policy to others (e.g. Vice-Chair), but remains accountable for its use. Vice-Chair The principal function of the Commission Vice-Chair is to prepare for the office of Chair and to take over the functions of the Chair when the Chair is unavailable, or otherwise at the request of the Chair. Secretary The principal function of the Commission Secretary is to ensure that (1) notices of Commission meetings, meeting agendas, and supporting materials are prepared and distributed as required by Policy; (2) appropriate written records of Commission meetings are prepared and distributed to all Commission members and the General Manager within three (3) days of each Commission meeting; (3) resolutions and other official actions of the Commission are prepared and executed in proper form; and (3) written records of Commission meetings, including resolutions and other official actions are archived in secure location(s) and disposed of in compliance with applicable laws and regulations. Elk River ----, Municipal Utilities 10b- DRAFT POLICY (02-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: COMMISSION COMMITTEES G2 Date of Adoption: Policy Reference: G.2H Purpose: With this policy, the Commission establishes and communicates its purposes and the means by which it creates and empowers committees to assist the Commission in its work. This policy applies to any group formed by Commission action, whether or not it is called a committee and whether or not the group includes Commission members. It does not apply to committees formed under the authority of the General Manager. Policy: Commission committees, when created, will be used to reinforce the wholeness of the Commission and never to interfere with the delegation of authority from the Commission to the General Manager or to any officer of the Commission. Commission committees will not have direct involvement with current management and staff employee functions. Consistent with this general statement: 1. The Commission will use committees sparingly and only for as long as required to accomplish its purposes. Committees may be appropriate in circumstances where the Commission recognizes the need for more in-depth review of information and issues, and where a committee is the best way to make effective and efficient use of available Commission member expertise and time. Committees may also be appropriate where it is necessary or desirable for the Commission to visibly demonstrate regulatory compliance or accountability to its stakeholders (e.g. Audit Committee). 2. Committees ordinarily will assist the Commission in the following specific ways: (1) by monitoring organization performance metrics and related information; (2) by preparing policy alternatives and their implications for Commission deliberation and action; (3) by determining the level of compliance with existing Commission policies and evaluating the results of policy compliance or non-compliance. 3. When the Commission creates a committee, it will develop and approve by resolution a written committee charter that sets forth the purposes, duration, expected outcomes, leadership, membership, delegated authority, available resources, and other information needed for the committee to function successfully. The General Manager will designate management/staff committee members if so requested. The Commission, by majority vote, will appoint Commission members to committees and remove or replace them, as appropriate. The Commission, by majority vote, will also appoint, remove, and replace a Committee Chair, Vice-Chair and any other positions of leadership that the Commission determines appropriate. Elk River Munici al Utilities 107 DRAFT POLICY(02-02-17) ERMU Commission Policy No. G.2h Commission Committees Page 2 of 2 4. The Commission recognizes that appointments to a Committee provide opportunities for learning and Governance development. Accordingly, the Commission endeavors to appoint Commission members to committee leadership positions who do not already hold a Commission office. 5. The Commission will review the committee charter and performance of any standing committee at least annually to determine if changes are required or if the committee is still required. 6. Commission committees may not convene a meeting that includes a quorum of the Commission. 7. Commission committees may not speak or act for the Commission except when formally given such authority for specific and time-limited purposes. Expectations and authorities will be carefully stated in order not to conflict with authority delegated to the General Manager or Commission Chair. 8. Commission committees may not exercise authority over management and staff employees. The General Manager is accountable to the whole Commission and is not required to obtain approval of any Commission committee before taking an executive action. 9. Commission committees will avoid relating to or identifying with discrete parts of the organization rather than the whole. A Commission committee that has helped the Commission create policy on a particular subject will not be used to monitor organizational performance on that same subject, except with specific Commission approval. Elk River Municipal Utilities 108 DRAFT POLICY (2.14-17) ELK RIVER MUNICIPAL UTILITIES COMMISSION POLICY Category: GOVERNANCE Title: WAGE & BENEFITS COMMITTEE CHARTER G2 Page 1 of 2 Date of Adoption: Policy Reference: G.2h.1 Purpose: The Wage and Benefits Committee exists to help the Commission develop and maintain a pay plan structure and benefits package that are market competitive, help promote employee retention, and to help the Commission make informed decisions which provide value to the customers through fair labor expenses. This Committee also exists to help the Commission with succession planning and review pay equity compliance. Membership: The Committee shall be comprised of two Commission delegated representatives, the General Manager, an administrative manager, and a field service superintendent. At no time shall there be a quorum of the Commission on the Committee. The Commission shall appoint Committee members annually following the Commission election of officers during the March Regular Commission meeting. The Commission shall also make an annual appoint the Committee Chair at that time. Role of the Committee Chair: The primary role of the Committee Chair is to run the Committee meetings. The Committee will adhere to the Current edition of Robert's Rules of Order Newly Revised for all situations to which they are applicable and are not inconsistent with ERMU's bylaws, policies, and any special rules of order that the Commission may adopt. The Committee meetings may be open or closed to employees at the discretion of the Committee Chair. Authority: Except as established in this Committee Charter, the authority of the Committee is limited to purpose of research and recommendation to the Commission. The Committee, at the discretion and through formal action of the Commission, may be empowered beyond the role of research and recommendation such that it is consistent with the Organizational Core Purpose policies and the Commission Committees policy. Elk River Municipal Utilities 109 DRAFT POLICY (2-14-17) ERMU Commission Policy No. G.2h.1 Wage & Benefits Committee Charter Page 2 of 2 Specific duties: 1. At the request of the Commission, research and analyze topics related to employee compensation and benefits. 2. Annually perform market benchmarking and evaluate wages. The Committee shall present options and make recommendations regarding cost of living adjustments and pay plan structure modifications to the Commission for their consideration. 3. Review insurance policies and evaluate policy renewals. The Committee shall present options and make recommendations regarding insurance policies to the Commission for their consideration. 4. Evaluate wage and benefit requests from employees. Present and make recommendations to the Commission as appropriate. 5. Review submittal information pertaining to pay equity compliance requirements and present options and make recommendations to the Commission as appropriate. 6. Record minutes of Committee meetings. Committee meeting minutes shall be subject to applicable data retention law and policies. Schedule: At a minimum, the Committee shall meet on a quarterly basis. Termination: The Committee shall exist until at such time formal action of the Commission is taken to dissolve the Committee. Elk River ,_,.. Municipal Utilities 110 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: FINANCIAL RESERVES & INVESTMENT G2 COMMITTEE CHARTER Page 1 of 2 Date of Adoption: Policy Reference: G.2h.2 Purpose: The Financial Reserves & Investment Committee exists to help the Commission develop and maintain industry appropriate financial reserves and investment policies. Membership: The Committee shall be comprised of two Commission delegated representatives, the General Manager, and the Finance & Office Manager. At no time shall there be a quorum of the Commission on the Committee. The Commission shall appoint Committee members annually following the Commission election of officers during the March Regular Commission meeting. The Commission shall also make an annual appoint the Committee Chair at that time. Role of the Committee Chair: The primary role of the Committee Chair is to run the Committee meetings. The Committee will adhere to the Current edition of Robert's Rules of Order Newly Revised for all situations to which they are applicable and are not inconsistent with ERMU's bylaws, policies, and any special rules of order that the Commission may adopt. The Committee meetings may be open or closed to employees at the discretion of the Committee Chair. Authority: Except as established in this Committee Charter, the authority of the Committee is limited to purpose of research and recommendation to the Commission. The Committee, at the discretion and through formal action of the Commission, may be empowered beyond the role of research and recommendation such that it is consistent with the Organizational Core Purpose policies and the Commission Committees policy. Specific duties: 1. At the request of the Commission, research and analyze topics related to financial reserves and investments. Elk River Municipal Utilities 111 DRAFT POLICY(2-14-17) ERMU Commission Policy No. G.2h.2 Financial Reserves & Investment Committee Charter Page 2 of 2 2. On a periodic basis, the Committee will review the investment balances and the various investment instruments for return, liquidity, and diversification. The Committee may present options and make recommendations to the Commission for their consideration. 3. Annually, when the Commission designates the official depository for the year, it should provide for the Finance & Office Manager to recommend that additional depositories be designated for the purpose of investing funds. 4. On behalf of the Commission and Committee, new Investments will be authorized by the Finance & Office Manager, with the funds actually being transferred via a check produced by the NP Specialist, and recorded in the check register detail presented at the regular Commission meetings. Investments that mature shall be reinvested by the Finance Director. All investing will be transacted working with the investment firm(s) or bank(s) for the best rate of return within the constraints of the ERMU Investment Policy. In the event that the Finance & Office Manager is unable to conduct above the investment responsibilities, the General Manager has the authority to act in his/her absence. 5. On a periodic basis, the Committee will review the Financial Reserves Policy and reserves balances. The Committee may present options and make recommendations regarding modification of the Financial Reserves Policy to the Commission for their consideration. Schedule: At a minimum, the Committee shall meet on a annual basis. Termination: The Committee shall exist until at such time formal action of the Commission is taken to dissolve the Committee. Elk River Municipal Utilities 112 DRAFT POLICY (01-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: GOVERNANCE Title: INDEPENDENT ADVISORS TO THE G2 COMMISSION Page 1 of 2 Date of Adoption: Policy Reference: G.2i Purpose: The Commission expects to engage the services of independent advisors in order to effectively perform its functions. With this policy, the Commission establishes and communicates the purposes for which it may engage independent advisors and the process by which it engages those advisors. Policy: Independent advisors are engaged to assist the Commission in its governance of ERMU. The Commission will engage independent advisors in the same manner that it expects management to engage independent professional service providers for other purposes. Only decisions of the Commission acting as a legally authorized decision-making body are binding on the independent advisors. Independent advisors; however, are expected to interact with the General Manager, management, and staff employees in the course of their work, and may have accountability to the General Manager. Consistent with this general statement: 1. The Commission may request and receive recommendations from the General Manager; however, the Commission will select its independent advisors and the independent advisors will have a direct reporting relationship and accountability to the Commission. 2. When engaging the services of any independent advisor, the Commission will comply with all applicable legal requirements, appropriate policies and procedures for requesting, receiving and evaluating proposals, and for contracting with professional service providers. Fees for the Commission's independent advisors will be paid from the Commission's budget account for Governance. 3. The Commission will engage the services of General Counsel to provide required or appropriate legal advice and assistance on all corporate matters related to the functions and responsibilities of the Commission (individually and collectively) and with respect to actions taken or contemplated by the Commission. General Counsel will also be available to the General Manager for legal advice and assistance to management. 4. The Commission will engage the services of a recognized certified public accountant to conduct required independent financial audits of records and accounts and to provide required or appropriate financial and accounting advice and assistance with respect to specific actions taken or contemplated by the Commission. Elk River Municipal Utilities 113 DRAFT POLICY (01-14-17) ERMU Commission Policy No. G.2i Commission Advisors Page 2 of 2 5. The Commission may engage the services of other independent advisors as may be required or appropriate to the effective discharge of its responsibilities. These other independent advisors may include: A. Financial advisors to provide required or appropriate financial advice and assistance related to financial planning, issuance of debt, cost recovery, and other specific actions taken or contemplated by the Commission. B. Special legal counsel to provide required or appropriate legal advice and assistance with respect to specific actions taken or contemplated by the Commission. C. Consulting engineers to provide required or appropriate engineering and technical advice and assistance with respect to specific actions taken or contemplated by the Commission. Elk River ..�. Municipal Utilities 11( DRAFT POLICY (02.14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: COMMISSION - Title: COMMISSION - MANAGEMENT ROLES G3 MANAGEMENT CONNECTION Date of Adoption: Policy Reference: G.3 Purpose: With this policy, the Commission 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 Commission will work with the General Manager as a leadership team. The Commission's principal role is to: • Hire a competent General Manager and support the General Manager by routinely engaging in collaborative performance planning and evaluation. • Develop and adopt policies for the governance of ERMU that set forth the results ERMU is to achieve and place limits on the authority of the General Manager to determine how those results are achieved. • Review and approve major plans, programs and budgets proposed by the General Manager(as required by the Commission's Delegation to Management Policies). • Routinely monitor organizational performance and accept accountability for that performance. The General Manager's principal role, with the support of management and staff employees, is to: • Support the Commission in its development of policies. • Carry out the Commission's policies. • Keep the Commission fully informed about compliance with the Commission's policies and the outcomes of those policies, including the achievement of results and the use of resources. • Manage and operate ERMU, accepting accountability for the performance of the organization in relation to the Commission's policies. Elk River Municipal Utilities 115 DRAFT POLICY (02-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: COMMISSION - Title: CONTROLLING AUTHORITY G3 MANAGEMENT CONNECTION Date of Adoption: Policy Reference: G.3a Purpose: With this policy, the Commission affirms that its authority to direct the General Manager resides only in an official action supported by the affirmative vote of a majority of a quorum of the Commission members during either a regular or a called special meeting of the Commission. Policy: Only decisions of the Commission acting as a legally authorized decision-making body are binding. Consistent with this general statement: 1. An individual Commission member or Commission committee cannot make decisions or recommendations, nor issue directives that are binding except in unusual instances when the Commission has acted to specifically authorize an individual Commission member or Commission committee to exercise such authority. This applies both during and outside of called meetings of the Commission. 2. When individual Commission members or Commission committees request information or assistance from management without first obtaining Commission authorization to do so, the General Manager may: a. Respond as requested, notifying all other Commission members of the request and the response provided. The General Manager may, at his or her sole discretion, provide copies to all other Commission members of any documents provided in the response. (Note: Other Commission members may request copies of any documents provided in the response and the General Manager is expected to provide them promptly). b. Refer the request to the Commission for consideration and direction before taking any action. The General Manager is not required to explain the basis for referring a request, but such basis could include a determination that the request may be sensitive or disruptive, or that it would require the expenditure of a material amount of staff time or funds that were not previously budgeted and scheduled for that purpose. (Note: the Commission member making a request for information may also refer it to the Commission for consideration and direction, if the General Manager did not respond to the satisfaction of the Commission member.) Elk River - Municipal Utilities 116 DRAFT POLICY (02-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: COMMISSION - Title: DELEGATION OF AUTHORITY TO THE G3 MANAGEMENT GENERAL MANAGER CONNECTION Page 1 of 2 Date of Adoption: Policy Reference: G.3b Purpose: With this policy, the Commission describes the manner in which it delegates authority to the General Manager. Policy: The Commission will provide direction to management only through the General Manager or through a temporary successor authorized by the General Manager or the Commission for a specific length of time. Except in unusual circumstances, the Commission will give direction by means of Commission action recorded in meeting minutes, by resolution, or by written policy that prescribes the results to be achieved as well as the actions and consequences to be avoided. The Commission will allow the General Manager to use any reasonable interpretation of its recorded actions, resolutions, or written policies. Consistent with this general statement: 1. The Commission will develop Authority and Purpose Policies, and Results Policies outlining high level priorities and instructing the General Manager to achieve certain results using the resources of ERMU that are made available through the approved Annual Business Plan with budget. 2. The Commission will develop Commission-Management Connections Policies that establish the respective roles and responsibilities of the Commission and the General Manager. 3. The Commission will develop Delegation to Management Policies that limit the methods the General Manager (and, by further delegation, management) may employ to achieve the results required by the Commission. 4. The Commission will develop its Results Policies and Delegation to Management Policies methodically and by subject area, beginning with the broadest level and moving to more focused levels, at the Commission's discretion. The Commission will determine the level of policy definition and specification so that, once approved, Commission members are comfortable allowing the General Manager to interpret each policy without the Commission's involvement (unless the General Manager requests Commission involvement). Elk River Municipal Utilities 117 DRAFT POLICY (02.02-17) ERMU Commission Policy No. G.3b Delegation of Authority Page 2 of 2 5. As long as the General Manager uses a reasonable interpretation of the Commission's Authority and Purpose Policies, Results Policies, and Delegation to Management Policies, the General Manager is authorized to establish all other management policies, make all decisions, develop all processes and procedures, take all actions, and establish all practices. 6. The Commission may, from time to time, change its Results Policies and Delegation to Management Policies, to allow the General Manager more or less latitude with respect to policy interpretation, decisions and actions. The Commission; however, will not use policy in this manner to reduce the latitude allowed a General Manager in situations where the person in that position is new or performing at an unacceptable level. As long as any particular policy is in place, the Commission will respect and support the General Manager's reasonable interpretations, decisions and actions. Elk Rive* Municipal Utilities 118 DRAFT POLICY (02-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: COMMISSION - Title: GENERAL MANAGER ACCOUNTABILITY G3 MANAGEMENT CONNECTION Date of Adoption: Policy Reference: G.3c Purpose: With this policy, the Commission affirms that the General Manager is the only person directly accountable to the Commission. Policy: The General Manager is the Commission's only formal connection to the ERMU organization and is the only person directly accountable to the Commission for operating results and operational conduct. Additionally, the General Manager is accountable only to the Commission. From the Commission's perspective, the authority and accountability of ERMU management and staff employees is inseparable from the authority and accountability of the General Manager. Consistent with this general statement: 1. The Commission as a body and the Commission members individually will never give instructions (direct or implied) to anyone other than the General Manager. 2. The Commission as a body and the Commission members individually will refrain from evaluating, either formally or informally, the job performance of any employee other than the General Manager. Elk River Municipal Utilities 119 DRAFT POLICY (02.14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category:: COMMISSION - Title: MONITORING PERFORMANCE OF THE 9 G3 MANAGEMENT GENERAL MANAGER CONNECTION Date of Adoption: Policy Reference: G.3d Purpose & Summary: With this policy, the Commission describes the manner in which it will routinely monitor the performance of the General Manager. Policy: The Commission will ensure that it routinely and thoroughly monitors the General Manager's job performance. The performance of the General Manager will be measured by comparing ERMU's accomplishments with the Commission's Results Policies and by comparing ERMU's operational conduct with the specific delegations and limits established by the Commission's Delegation to Management Policies, and consistent with Authority and Purpose Policies. Consistent with this general statement: 1. Monitoring is the periodic review of objective, relevant, timely and accurate information that allows the Commission to determine the extent to which Commission policies are being carried out. Information that does not do this is not considered monitoring information and should not be a focus of the Commission. 2. The Commission will acquire the monitoring information it needs by either or both of the following methods: 2.1. By internal report, in which the General Manager provides compliance information directly to the Commission. 2.2. By external report, in which an objective external party, selected by the Commission, gathers information for the Commission. At the Commission's discretion, the external party may also evaluate compliance with Commission policies and report this information to the Commission. 3. Regardless of the method(s) employed, the standard for compliance with any policy shall be whether or not the General Manager made a reasonable interpretation of the Commission policy being monitored following its adoption. Elk River �. Municipal Utilities 120 DRAFT POLICY (02-14-17) ERMU Policy G.3d Monitoring Performance of the General Manager Page 2 of 2 4. The Commission will regularly monitor compliance with Results Policies and Delegation to Management Policies according to the schedule approved by the Commission in its biennial Governance Agenda. The General Manager will recommend a schedule using monitoring methods and frequencies. The Commission may monitor a policy at any time by any method. Elk River Municipal Utilities 121 DRAFT POLICY (02-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: COMMISSION - Title: GENERAL MANAGER PERFORMANCE G3 MANAGEMENT PLANNING AND EVALUATION CONNECTION Date of Adoption: Policy Reference: G.3e Purpose: With this policy, the Commission describes the manner in which it will routinely establish performance expectations for and evaluate the performance of the General Manager. Policy: During the second quarter of each fiscal year, the Commission will evaluate the General Manager's performance for the preceding fiscal year and establish performance expectations for the next fiscal year. The General Manager's performance will be evaluated by comparing the organization's results and methods, as well as the General Manager's personal performance and conduct in relation to Commission policies and other expectations, as established and communicated by the Commission for the time period that coincides with the immediately preceding fiscal year. The Commission will conduct its evaluation within the boundaries of the Commission's policies and its Employment Agreement with the General Manager. The Commission is responsible for the performance of the General Manager and may evaluate the General Manager's performance at any time the Commission determines that it is in the best interests of ERMU to do so. The evaluation of the General Manager will be based on: 1. ERMU's operational performance and conduct in comparison to the Commission's Results Policies and Delegation to Management Policies, and consistent with Authority and Purpose Policies. 2. ERMU's operational and fiscal performance and conduct in comparison to the ERMU Strategic Plan, Annual Business Plan (with budget), Financial Plan, and any other critical success factors established for the organization. The General Manager shall propose with each Annual Business Plan the specific performance criteria that represent his/her reasonable interpretation of the Commission's performance expectations for the following fiscal year (Performance Matrix). The Commission and General Manager will discuss and agree in advance on the criteria to be used. 3. The General Manager's personal performance and conduct in interactions with the Commission, the Commission's independent advisors, customers, elected officials, employees, regulators, and representatives of other allied organizations or any other area deemed appropriate by the Commission and communicated to the General Manager. Elk River Municipal Utilities 122 DRAFT POLICY (2-14-17) ELK RIVER MUNICIPAL UTILITIES - COMMISSION POLICY Category: RESULTS Title: GOALS AND RESULTS G5 Date of Adoption: Policy Reference: G.5 Purpose: Well defined organizational core purpose policies are essential to establish goals, set criteria for organizational benchmarking and measurement, and ultimately produce desirable results. Policy: The Commission will annually establish goals for the organization that are consistent with the strategic plan, annual business plan (with budget) and financial plan. The Commission will annually review the results. Elk River Municipal Utilities 123