5.3 ERMUSR 07-10-2018 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
ERMU Commission Wage & Benefits Committee
MEETING DATE: AGENDA ITEM NUMBER:
July 10, 2018 5.3
SUBJECT:
Wage &Benefits Committee Update
ACTION REQUESTED:
Per the recommendation of the Wage & Benefits Committee, approve the following:
• Policy language change for 457 deferred compensation manager contributions to be a
match
• Employer contribution to 457 deferred compensation for all employees to be made each
payroll rather than May 31st
• Award of annual personal leave day to January 1 rather than June 1
BACKGROUND:
Per the Governance Policy G.2g1 Wage & Benefits Committee Charter and consistent with
Governance Policy G.2g Commission Committees, the committee shall meet on a quarterly
basis. The committee met on May 30 and had a follow up meeting on June 27.
DISCUSSION:
The primary focus for this meeting was to update on items from the May meeting regarding
staffing levels, organizational growth, and succession planning. Additionally, the committee
reviewed proposed policy language changes needed to comply with state statute for the 457
deferred compensation plan for the manager group.
An update by staff was provided for the committee regarding work in progress related to staffing
levels,organizational growth,and succession planning implemented in May. The analyses for the
vacant specialist positions are nearly complete as well as the evaluation of the essential job duties for
the other three specialist positions. The city and utilities are finalizing language for a memorandum of
understanding(MOU)for IT services. This MOU was needed to complete the job description for the
Operational Technology Manager position. The analysis for the Executive Administrative Assistant
was completed. The Field Crew Foreperson job description was completed and posted with a closing
date of Friday,July 6. This work in progress will be reviewed by the committee on August 8 with
recommendations coming to the commission on August 14.
A new discussion item for this meeting was the topic of the previously passed policy change to
include an employer contribution of 2.5%to the 457 plan for managers. This was passed last year to
help address the salary compression that exists in our current pay structure between management and
they staff they supervise. There is a state statute that limits an employer contribution to be a matched
contribution since we are a public entity participating in PERA,and this statute was provided for
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review. After discussing with our attorneys,a proposed language modification was suggested as
follows: "Employees in the Management Group are eligible for an additional employer matching
contribution up to 2.5%of the manger's annual base salary,conditioned on the individual providing
the Utilities with authorization for the necessary payroll deduction." This policy language change was
agreed upon by the committee,however,needs formal approval by the commission.
Additionally,a house keeping item was discussed. The employer matched contributions have been
funded May 31st since inception. After discussion with staff, it was proposed to change this to a
calendar year contribution that could be made with each payroll funding,just like PERA is handled
currently.This eliminates additional tracking and year-end audit accruals,as well as the challenge of
funding terminated employees still eligible for the pro-rated match when they close their account
before the contribution is made. Consensus was to make a policy change to eliminate the May 31st
funding language,effective as soon as administratively feasible,and needs formal approval by the
commission.
One final housekeeping item,the annual personal leave day that is awarded to staff is also on a similar
timeline and is currently awarded June 1,expiring the following May 31 if not used. As this would be
the only mid-year item remaining, staff proposed having this awarded January 1 with a December 31
expiration if not used,effective January 1,2019.
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