4.3 ERMUSR 03-13-2017Elk 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:
March 13, 2017
4.3
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.
The scope of work for the governance policy project was split into two phases. Phase 1 focuses
on the core governance policies and the by-laws. With the exception of the by-laws and legal
counsel review, the work associated with Phase 1 has been completed. The policies included in
Phase 1 were adopted by the Commission during the February 2017 Commission meeting. The
by-laws and legal review have not yet been completed by ERMU legal counsel. These remaining
items of work product included with the Phase 1 scope of work are intended to be presented to
the Commission in April 2017.
DISCUSSION:
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. Originally the overall governance manual
project was split into two phases because the work would fall into two separate budget years and
so the Commission would have an opportunity to assess the work product and progress of Phase
1 before making a commitment on Phase 2.
The leadership team has evaluated the work associated with Phase 2 and has determined that this
is not something that can be completed "in house." First, there has been great value realized by
have a third party's perspective throughout the Phase I process. That added insight into industry
standards and best practice, have helped to create a better product. Second, with a current
vacancy on the leadership team and the forecasted work load and large number of highly
significant projects, the leadership team does not have the labor resources to complete this
project within the desired timeline at the desired quality.
Page 1 of 3 I V/� A UR E
El.
Pcv:=xeo To SE,o
84
Collaboration Unlimited has provided a scope of work for Phase 2 along with a quote and
schedule for completion. The remaining policies to be developed and included in the quote are:
Delegation to Management Policies
DM - 1 Corporate Limitations
DM - 1.1 Succession of Leadership
DM - 1.2 Information and Support to the Commission
DM- 1.3 Strategic and Business Planning
DM - 1.4 Customer Interests
DM - 1.5 Core Customer Services
DM - 1.7 Employee Interests
DM - 1.8 Organization & Staffing
DM - 1.9 Financial Planning and Budgeting
DM - 1.10 Financial Condition and Transactions
DM- 1.10.1 Investments
DM - 1.10.2 Reserve Funds
DM- 1.10.3 Debt Issuance and Payment
DM- 1.10.4 Procurement
DM- 1.11 Cost Allocation and Recovery
DM- 1.11.1 Rates & Charges for Electric Services
DM - 1. 11.2 Rates & Charges for Water Services
DM- 1.12 Joint -Action Agency Relationship, Representation and Governance
DM - 1.13 Protection of Assets (physical property, information, cash, investments)
DM - 1.14 Corporate Risk Management
DM- 1.15 Legal & Regulatory Compliance
DM- 1.16 Environmental Stewardship
DM- 1.17 External Communications (public, legislative, allied organizations)
DM - 1.18 Community Involvement
Other potential policies not included in the quote:
DM - 1.5.1
Electric Services
DM - 1.5.2
Water Services
DM - 1.6
Other Customer Services (Services for the City)
DM - 1.11.3
Rates & Charges for Other Services (Services for the City)
The quote is for an additional fixed fee of $14,500 for a similar development and modification
process as Phase 1 without a formal questionnaire process. The schedule would be to complete
two to three policies every month which would bring the governance project to completion in
approximately one year.
This fee would be subject to an 80/20 split between the electric and water funds resulting in an
electric expense of $11,600 and a water expense of $2,900. The electric budget has $20,000
allocated in the approved budget for consulting fees which would be used for Phase 2 of this
project. The water budget did not have addition unallocated money budgeted for consulting fees.
However, the water budget does include a total of $20,000 which is allocated for two other
consulting projects: field service building expansion and physical/cyber security. It is likely that
WE
Page 2 of 3
N URE
►
P c w e n e o T o S e e v c
85
there could be $2,900 remaining from these projects to cover the costs associated with Phase 2 of
the governance manual project.
ACTION REQUESTED:
Approved contracting with Collaboration Unlimited to complete Phase 2 of the governance
manual for a fixed fee of $14,500.
M.
Reliable PLUic
Power Provider
PBNEABI
Page 3 of 3 N""'T'EB
POW E R E O T O S ERV E
86