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2.6 ERMUSR 05-09-2017 Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: ERMU Commission Troy Adams, P.E. - General Manager MEETING DATE: AGENDA ITEM NUMBER: May 9, 2017 2.6 SUBJECT: Revised Governance Policies ACTION REQUESTED: Adopt the core governance policies as proposed. 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. The work was divided into two phases, the first being the core governance policies and the second addressing the development of delegation to management policies. On February 14, 2017, the Commission adopted the core governance polices contingent upon legal counsel review. DISCUSSION: Staff worked with ERMU's legal counsel to review the core governance policies adopted in February 2017. The results of that review are reflected in the attached proposed core policies. Additionally, Staff has revised Policy G.2c—Agenda Planning to reflect an equally effective yet more manageable Commission meeting agenda template. Staff began using the new agenda template in April. FINANCIAL IMPACT: None. ATTACHMENTS: • ERMU Policy Book Table of Contents • ERMU Policy—G.lb—Organizational Core Purpose • ERMU Policy—G.1 c—Mission Statement • ERMU Policy—G.1 d—Vision Statement • ERMU Policy—G.le— Organizational Values • ERMU Policy—G.l f—Organizational Fundamentals • ERMU Policy—G.1 g—Planning Themes Page 1 of 2 4n • ERMU Policy—G.2—Commission Purpose • ERMU Policy—G.2a— Commission—City Council Relationship and Roles • ERMU Policy—G.2b—Commission Authorities and Responsibilities -Remove • ERMU Policy—G.2b—Governing Style • ERMU Policy—G.2c—Agenda Planning • ERMU Policy—G.2d - Commission Member Role, Responsibilities and Orientation • ERMU Policy—G.2e—Commission Member Conduct • ERMU Policy—G.2f—Commission Officer Roles, Responsibilities and Succession • ERMU Policy—G.2g—Commission Committees • ERMU Policy—G.2g.1 —Wage& Benefits Committee Charter • ERMU Policy—G.2g.2—Financial Reserves and Investment Committee Charter • ERMU Policy—G.2h—Independent Advisors to the Commission • ERMU Policy—G.3 —Commission - Management Roles • ERMU Policy—G.3a— Controlling Authority • ERMU Policy—G.3b—Delegation of Authority to the General Manager • ERMU Policy—G.3c— General Manager Accountability • ERMU Policy—G.3d—Monitoring Performance of the General Manager • ERMU Policy—G.3e— General Manager Performance Planning and Evaluation • ERMU Policy—G5 —Goals and Results Page 2 of 2 41 Elk River Municipal Utilities COMMISSION POLICY MANUAL TABLE OF CONTENTS GOVERNANCE Authority and Purpose Policies G.1 a By-Laws G.lb Organizational Core Purpose G.1 c Mission Statement G.ld Vision Statement G.le Organizational Values G.1 f Organizational Fundamentals G.1 g Planning Themes Governance Policies G.2 Commission Purpose G.2a Commission—City Council Relationship and Roles G.2b Commission Authorities and Responsibilities G.2be Governing Style G.2cd Agenda Planning G.2de Commission Member Role, Responsibilities and Orientation G.2ef Commission Member Conduct G.2fg Commission Officer Roles, Responsibilities and Succession G.2gh Commission Committees G.2ghl Wage & Benefits Committee Charter G.2gh2 Financial Reserves and Investment Committee Charter G.2h} 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 G.4 To be Developed Results Policies G.5 Goals and Results Page 1 of 4 42 ERMU Commission Policy Manual Table of Contents 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 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 Page 2 of 4 43 ERMU Commission Policy Manual Table of Contents 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 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) Page 3 of 4 44 ERMU Commission Policy Manual Table of Contents 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 Page 4 of 4 45 Elk River . Municipal Utilities COMMISSION POLICY Section: Category: Governance Authority and Purpose Policies Policy Reference: Policy Title: G.lb Organizational Core Purpose 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 its 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 the 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 ant-lie ongoing review process offor the organizations core purpos;to maintain organizational effectiveness and sustainable success. POLICY: The Commission will adopt and maintain relevant and sustainable organization core purpose I documents including a mission statement, a 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, Tthe 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. POLICY HISTORY: Page 1 of 2 48 ERMU Commission Policy—G.lb Organizational Core Purpose I Adopted May 9, 2017February H, 2017 Page 2 of 2 47 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Authority and Purpose Policies Policy Reference: Policy Title: G.1 c Mission Statement 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 I organization's existence. The mission statement then plays an important role in the 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. POLICY HISTORY: I Adopted May 9, 2017February 14, 2017 Page 1of1 48 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Authority and Purpose Policies Policy Reference: Policy Title: G.ld Vision Statement PURPOSE: I Similarly to an organizational mission statement, Aa 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. POLICY HISTORY: I Adopted May 9, 2017February 11, 2017 Page 1 of 1 4g Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Authority and Purpose Policies Policy Reference: Policy Title: G.le Organizational Values PURPOSE: I Governance and leadership style set the 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, e tab1i ed 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. POLICY HISTORY: I Adopted May 9, 2017February 14, 2017 Page 1 of 1 50 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Authority and Purpose Policies Policy Reference: Policy Title: G.lf Organizational Fundamentals 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. POLICY HISTORY: I Adopted May 9, 2017February 11, 2017 Page 1 of 1 51 .,/ Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Authority and Purpose Policies Policy Reference: Policy Title: G.lg Planning Themes PURPOSE: Providing transparency and a clear connection between the organizational mission and vision to initiative and task,is an important leadership guide to makeifrg sure resources are contributeding 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 the 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. Page 1 of 2 52 ERMU Commission Policy— G.1 g Planning Themes 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. POLICY HISTORY: I Adopted May 9, 2017February 1'I, 2017 Page 2 of 2 Elk River .= Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2Commission Purpose PURPOSE: With this policy, the Commission commits that it will govern as a body that understands its I 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. POLICY HISTORY: I Adopted May 9, 2017February 14, 2017 Page 1 of 1 54 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2a Commission — City Council Relationship and Roles 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. LECAL AUTHORITY: As established by Minnesota Statutes Chapter 412,the Commission has complete and sole 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 Commision 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. -- - -• . :. :. - . .. . - - .. . ' : : - . . -, 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 municipal utilitiespr4vete and citypublie governance, . It is the intent of both the Commission and the City Council to align itsthcir respective governance structures and processes with the city in ways that will realize these opportunities for greater value. Page 1 of 3 55 ERMU Commission Policy—G.2a Commission—City Council Relationship and Roles Consistent with the preceding,the Commission will not fail to: 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 managementanil Formatted:Numbered+Level:1+ 6 _.. • . Numbering tyle:a,b,c,...t+Start at:I1+nt - ; ' - Alignment:Left+Aligned a: 0.25"+Indent .- -- _--- . • - " - •- • - • - at 0.5" • =• Formatted:Indent:Left: 0.5", No bullets or numbering 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 at least once every three(3)years.The meeting will be held int-the 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 Page 2 of 3 56 ERMU Commission Policy—G.2a Commission—City Council Relationship and Roles 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. POLICY HISTORY: I Adopted May 9,2017February 11,2017 Page 3 of 3 57 REMOVE—G2b Commission Authorities and Responsibilities Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2b Commission Authorities and Responsibilities 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. POLICY HISTORY: Adopted February 14, 2017 Page 1 of 1 58 ,/i Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2be Governing Style 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 statuary authorityrolc 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 Page 1 of 2 59 ERMU Commission Policy—G.2be Governing Style 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 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. POLICY HISTORY: I Adopted May 9, 2017February 11I, 2017 Page 2 of 2 An Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2cd Agenda Planning 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 Page 1 of 4 Al ERMU Commission Policy— G.2cd Agenda Planning typically focus on a limited number of specific items that are best handled in those types of meetings. Consistent with the preceding: 1. During the first quarter of each fiscal year (January - March): a. The Commission will elect officers at its March meeting, following the appointment of Commissioners by the City Council. b. 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): a. The Commission will consider and approve the external audit report as specified in the Governance Calendar. b. The Commission and Management will evaluate the Performance Matrix for the preceding fiscal year. c. The Commission will formally evaluate the performance of the General Manager. d. 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): a. 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): a. 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. b. 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: a. The Commission Chair and the General Manager will discuss, at least monthly, approximately seven (7) days in advance of each regularly scheduled Commission Page 2 of 4 ERMU Commission Policy—G.2c4 Agenda Planning meeting to develop a tentative agenda, including any items to be discussed in closed session. b. 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, b. The General Manager will ensure the posting of a meeting notice, along with the tentative agenda, in compliance with applicable law. c. 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. d. 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: i. For Commission action at the present meeting; ii. For Commission action at a future meeting; iii. As information for monitoring policy compliance; iv. For policy review and development; v. As information for monitoring performance; vi. And 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. vii. Each agenda also includes an open forum time for public participation. i. Governance—Includes agenda items: call meeting to order, pledge of allegiance., consider agenda, resolutions, and similar actions of governance. ii. Consent—Includes items that are considered routine. There may be questions asked for clarification, but typically these items have no discussion. The items on consent are presented for Commission consideration all together and by one motion. A Commission member may request before the motion to approve the "Consent" items that any item(s) be moved from "Consent"to "Business Action." iii. Open Forum—This is an opportunities for public participation. Speakers will be required to state their name and address for public record. Items will be heard at the discretion of the Commission Chair. Items will be for discussion only; no action can be taken on the topic during that meeting. iv. Business Action—Current business action requests and performance monitoring reports. Page 3 of 4 63 ERMU Commission Policy—G.2cd Agenda Planning v. Business Discussion—This includes strategic planning, general updates, and informational reports. Topics may be table for future Business Action consideration. Will include an agenda item title `'Future Planning" during which time any Commissioner or the General Manager may discuss and suggest items for placement on future meeting agendas. This agenda category will also include the item"Other Business"to provide additional flexibility for discussion of matters not specifically contemplated in advance or for agenda items that do not required Commission action and do not conform to any of the predetermined categories. c. 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". f. 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. ge.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. f. 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. POLICY HISTORY: I Adopted May 9. 2017February 1/, 2017 Page 4 of 4 A4 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2de Commission Member Role, Responsibilities, and Orientation 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 act 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. a. Authority and Purpose: Policies that recognize the Utilities' and Commission's right to exist, and authorities and policies to define organizational core purpose. b. Governance: Policies that specify how the Commission conceives, carries out and monitors its own tasks. c. Commission-Management Connection: How organizational authority is delegated, its proper use is monitored, and the General Manager is accountable for ERMU's performance. Page 1 of 2 A5 ERMU Commission Policy—G.2de Commission Member Role, Responsibilities, and Orientation d. Delegation to Management: Limitations on executive authority that establish the prudence and ethics boundaries within which all executive activity and decisions must take place. e. 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. 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 Commissioners 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. POLICY HISTORY: I Adopted May 9, 2017February 11, 2017 Page 2 of 2 AR -i, Elk River L Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2ef Commission Member Conduct 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, in person or electronically, 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. Page 1 of 3 A7 ERMU Commission Policy—G.2ef Commission Member Conduct 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. 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. 5. 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. 6. Commission members will respect the confidentiality that is appropriate to issues and information of a sensitive nature. 677. Commission members are bound by, and will comply with, all State Statutes regarding conflicts of interest and Elk River City Code sections 2-131 —2-135. q,8. In addition, 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. I 8,9. 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. I 9,-10. 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. Page 2 of 3 AR ERMU Commission Policy— G.2ef Commission Member Conduct 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. 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. POLICY HISTORY: I Adopted May 9, 2017February 11, 2017 Page 3 of 3 RP Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2fg Commission Officer Roles, Responsibilities, and Succession 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 Page 1 of 3 7n ERMU Commission Policy—G.2 fg Commission Officer Roles, Responsibilities, and Succession 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. 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 Page 2 of 3 71 ERMU Commission Policy—G.2fg Commission Officer Roles, Responsibilities, and Succession soon as practical, any communications made on behalf of the Commission. Representation of the Commission to outside parties is subject to the following limitations: i. 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. ii. Communications must, as far as practical, represent the collective wisdom or position of the Commission. iii. 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 three (3) days prior to the next Commission meeting; 3. Resolutions and other official actions of the Commission are prepared and executed in proper form; and 4. 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. POLICY HISTORY: I Adopted May 9, 2017February 111, 2017 Page 3 of 3 72 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2gh Commission Committees 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. Financial Reserves and Investments Committee). 2. Committees ordinarily will assist the Commission in the following specific ways by: a. Monitoring organization performance metrics and related information; b. Preparing policy alternatives and their implications for Commission deliberation and action; Page 1 of 2 73 ERMU Commission Policy—G.2gh Commission Committees c. 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. 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. POLICY HISTORY: I Adopted May 9. 2017February 14. 2017 Page 2 of 2 74 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2ghl Wage & Benefits Committee Charter 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 Commissionersdelegated 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: I Except as established in this Committee Charter, the authority of the Committee is limited to the 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 Page 1 of 2 75 ERMU Commission Policy—G.2ghl Wage & Benefits Committee Charter 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 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 related to employee benefit insurances. The Committee shall present options and make recommendations regarding these 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. POLICY HISTORY: Adopted May 9, 2017February 14, 2017 Page 2 of 2 7A Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2gh2 Financial Reserves & Investment Committee Charter PURPOSE: The Financial Reserves & Investment Committee exists to help the Commission develop and maintain industry appropriate financial reserves and investment policies. MEMBERSHIP: I The Committee shall be comprised of two Commissioners 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: I Except as established in this Committee Charter, the authority of the Committee is limited to the 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. Page 1 of 2 77 ERMU Commission Policy—G.2gh2 Financial Reserves & Investment Committee Charter SPECIFIC DUTIES: 1. At the request of the Commission, research and analyze topics related to financial reserves and investments. 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 A/P Specialist, and recorded in the check register detail presented at the regular Commission meetings. Investments that mature shall be reinvested by the Finance & Office ManagerDirector. 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 above 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 an annual basis. TERMINATION: The Committee shall exist until at such time formal action of the Commission is taken to dissolve the Committee. POLICY HISTORY: I Adopted May 9, 2017February 14, 2017 Page 2 of 2 78 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Governance Policies Policy Reference: Policy Title: G.2h4 Independent Advisors to the Commission 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 Page 1 of 2 7A ERMU Commission Policy—G.214 Independent Advisors to the Commission 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. 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. POLICY HISTORY: I Adopted May 9, 2017February 14, 2017 Page 2 of 2 Rn �� II Elk River -�- Municipal Utilities COMMISSION POLICY Section: Category: Governance Commission—Management Connection Policies Policy Reference: Policy Title: G.3 Commission — Management Roles 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: 1. Hire a competent General Manager and support the General Manager by routinely engaging in collaborative performance planning and evaluation. 2. 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. 3. Review and approve major plans, programs and budgets proposed by the General Manager (as required by the Commission's Delegation to Management policies). 4. 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: 1. Support the Commission in its development of policies. 2. Carry out the Commission's policies. Page 1 of 2 81 ERMU Commission Policy— G.3 Commission—Management Roles 3. 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. 4. Manage and operate ERMU, accepting accountability for the performance of the organization in relation to the Commission's policies. POLICY HISTORY: I Adopted May 9, 2017February 1'I, 2017 Page 2 of 2 82 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Commission—Management Connection Policies Policy Reference: Policy Title: G.3a Controlling Authority 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 Page 1 of 2 ERMU Commission Policy—G.3a Controlling Authority 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.) POLICY HISTORY: I Adopted May 9, 2017February 11, 2017 Page 2 of 2 84 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Commission—Management Connection Policies Policy Reference: Policy Title: G.3b Delegation of Authority to the General Manager 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 Page 1 of 2 ERMU Commission Policy—G.3b Delegation of Authority to the General Manager 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). 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. POLICY HISTORY: Adopted May 9, 2017February H, 2017 Page 2 of 2 RR Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Commission—Management Connection Policies Policy Reference: Policy Title: G.3c General Manager Accountability 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. POLICY HISTORY: I Adopted May 9, 2017February 14, 2017 Page 1 of 1 R7 Elk River Municipal Utilities COMMISSION POLICY Section: Category: Governance Commission—Management Connection Policies Policy Reference: Policy Title: G.3d Monitoring Performance of the General Manager PURPOSE: 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: a. By internal report, in which the General Manager provides compliance information directly to the Commission. b. 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. Page 1 of 2 88 ERMU Commission Policy—G.3d Monitoring Performance of the General Manager 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. 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. POLICY HISTORY: I Adopted May 9, 2017February H, 2017 Page 2 of 2 R9 ERMU Commission Policy—G.3e General Manager Performance Planning and Evaluation 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. POLICY HISTORY: I Adopted May 9, 2017February H, 2017 Page 2 of 2 q1 Elk River . Municipal Utilities COMMISSION POLICY Section: Category: Governance Results Policies Policy Reference: Policy Title: G.5 Goals and Results 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. POLICY HISTORY: I Adopted Mav 9, 2017February 14, 2017 Page 1 of 1 P9