5.2 ERMUSR 11-12-2019 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
ERMU Commission Wage & Benefits Committee
MEETING DATE: AGENDA ITEM NUMBER:
November 12, 2019 5.2
SUBJECT:
Wage & Benefits Committee Update
ACTION REQUESTED:
Approve all action items as outlined below to be effective January 1, 2020.
DISCUSSION:
On October 8, the Wage & Benefits Committee (W&BC) held an open meeting for employees to
submit wage and benefit suggestions for consideration by the Committee.The Committee met
on October 28 to review and research topics from the open meeting.The Committee also
performed market analysis in preparation for making a cost of living adjustment (COLA)
recommendation to the Commission.The Committee also followed up on other miscellaneous
outstanding issues. The Committee submits the following for Commission consideration:
Employee Requests
A number of requests were submitted to the Committee by employees.The following items
were requested by field staff: "metro average" benchmarking for lineworker position and to
create a "comp" time off policy. And the following items were requested by office staff: paid
time off for volunteerism. Additionally, there had been a request by field staff to evaluate
having a second option for a higher deductible with lower premium health insurance plan.
1. Metro Average -The metro average cost of living adjustment used for benchmarking
lineworker market pay compares the base compensation of four metro municipals and
three metro cooperatives with ERMU. The comparison utilities are:The City of Anoka,
The City of Chaska,The City of North St. Paul, Shakopee Public Utilities, Connexus
Energy, Great River Energy, and Wright-Hennepin Cooperative Electric Association.
The projected 2020 metro average for base compensation would result in a 4.2%
adjustment (COLA plus market adjustment) for the ERMU lineworker pay group.This
benchmarking system for this group has improved stability in ERMU's market
competitiveness for this pay group. The Committee recommends awarding the metro
average increase for the lineworker pay group as requested.
2. Compensatory time off policy- Similar to when this was reviewed last year, the
Committee reviewed the request for a "comp"time-off policy.The Committee discussed
benefits and disadvantages of implementing a similar policy.
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First, it was noted that a compensatory time policy would not benefit all employees as
not every position has equal opportunity to work overtime to earn comp time.
Second, implementation of a compensatory time policy would be complicated in our
payroll system. Staff discussed the issue with our payroll software provider and there is
not currently a function built into our software.The tracking would not be automated
and required some manual processes.
Third, a comp time policy works well to help balance peaks in work flow allowing
employees to earn comp time when it is busy and then allowing the employees to use
comp time when work flow is slower. At ERMU there is not a slow time in work flow,
especially for those positions which would have the greatest opportunity to work
overtime to earn comp time. And for the foreseeable future, ERMU will be very busy
with electric service territory transfer rebuild and new construction. Because of the
workload, the implementation of a comp time policy would likely result in additional
overtime to offset loss of productivity due to comp time.
Because of these three reasons, the committee does not recommend the adoption of a
compensatory time off policy.
3. Volunteerism Paid Time Off—The Committee reviewed the request and comparable
utilities' policies for paid time off to volunteer. After discussion, it was determined that
supporting employees'volunteerism reinforces values consistent with those adopted by
the Commission as part of our mission, vision, and values governance policies. The
Committee concluded that a policy supporting volunteerism could ultimately improve
delivered value to our community. The Committee recommends that the Commission
approve up to four hours paid time off annually for employees for volunteerism, subject
to approval by their manager. If approved by the Commission, language would be
drafted and incorporated into the employee handbook. Also, the policy would be
evaluated for employee use and effectiveness after the first year.
4. Second Health Insurance Option —Some field staff employees had requested a second
option for health insurance, a higher deductible plan with lower premiums.The request
did not allow for adequate time to research and make a recommendation to the
Commission with time to implement for 2020.The Committee and staff intend to
research options and provide an update and/or recommendation to the Commission in
2020 with sufficient time to implement for 2021 if approved.
Cost of Living Adjustment (COLA)
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As previously noted, the Committee recommends increasing the lineworker pay group to be
consistent with the metro average. For the field, office, and management pay groups,the
Committee recommends a COLA of 3%for 2020.
Health Care Accounts Employer Contributions
As previously communicated to the Commission,the 2020 renewal for our health insurance
policy was 7.5%;this was the lowest increase possible through our insurance pool.The
Committee recommends keeping the employer contribution to the employee's health care
accounts (HSAs) at the same levels as 2019. These funding levels were $650 for single and
$1985 for single plus one and family.
Employee Handbook Annual Legal Review and Update
In addition to the annual legal review, the Committee discussed a few other changes needed
for the handbook. There are numerous position title changes that will need to be made as a
result of the organizational structure updates approved by the Commission in August. Some of
the other items that will be updated for future commission approval with the handbook:
1. Paid Leave Donation—This policy was created to allow employees to donate paid time
off to a co-worker "who is experiencing a medical emergency in the form of a major or
catastrophic life event necessitating time off from work for which the receiving
employee has insufficient paid time off available."The Committee discussed expanding
the policy beyond "medical emergency" to include loss of a family member or other
manager-approved circumstance.The Committee gave staff direction to develop
language for commission consideration with the handbook update at a future meeting.
2. Governor's Salary Cap—Minnesota state law limits the compensation for government
employees based on the governor's salary. For government employees where market
competitiveness creates a business justification to exceed that limit, there are options
to apply for a waiver.There is also the option to use deferred paid time off for
compensation over the limit.These approaches are both commonly used by larger
Minnesota municipal utilities. The Committee discussed the need to proactively include
language in the handbook to address the law and ensure compliance for future years.
Staff will bring back language addressing these legal requirements with the employee
handbook update for commission consideration at a future meeting.
3. Water Superintendent On-Call /Vacation—Due to salary compression issues, the
Commission had previously approved providing annually an additional 40 hours of
vacation to the Electric Superintendent and the Assistant Electric Superintendent to
compensate these exempt manager position for their required on-call supervisory
responsibilities that come with having employees that are on-call.The Committee
discussed this benefit and concluded that it should be extended to the Water
Superintendent as well due to the similar responsibilities.The revised language will be
included in the employee handbook update for consideration by the Commission at a
future meeting.
Human Resources Manager
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In August,the Commission approved updates to the organizational chart and company
structure. At that time, management indicated to the Commission that a Human Resources
Manager position addition would be included in the 2020 budget.The Committee discussed the
position addition and management's suggestion to delay the addition until 2021.This position
has been removed from the 2020 budget.
ACTION REQUESTED:
The Committee recommends the Commission take the following actions:
• Approve 3.0%COLA for the Office, Field, and Management pay groups.
• Approve 4.2%adjustment (COLA plus market adjustment) for the Lineworker pay group.
• Approve annual HSA employer contribution levels of$650 for single, and $1985 for
single plus one and family.
• Approve offering four hours of paid time off annually, per employee, for approved
volunteerism.
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