4.2 ERMUSR 07-13-2021______________________________________________________________________________
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Theresa Slominski – General Manager
MEETING DATE:
July 13, 2021
AGENDA ITEM NUMBER:
4.2
SUBJECT:
Annual Strategic Plan Review
ACTION REQUESTED:
Consensus on high level strategic themes and annual business plan budgeting/rates direction.
BACKGROUND
In August 2017, the Commission adopted a comprehensive manual of governance policies
based on the Carver Model of governance. Included in those governance policies is Governance
Policy G.2c Agenda Planning. This policy notes that in the first quarter “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.” This annual review was confirmed and scheduled
through the Commission’s adoption of the 2021 Governance Agenda, which is included in the
monthly commission meeting materials, and is available to the public. This annual review was
conducted during the February commission meeting. Feedback from the commission was noted
by staff.
Per the Governance Policy G4.c Strategic and Business Planning and consistent with Policy G.2c
Agenda Planning and with the 2021 Governance Agenda adopted by the commission in 2018,
the Commission and management begin their annual update of the strategic plan and financial
plan for the succeeding five-year period during the July regular commission meeting.
The strategic plan shall provide “strategic direction for a period of not less than five (5) future
fiscal years in terms of high-level elements such as vision, core purpose, core values, mission,
key result areas and broadly stated strategic objectives that are intended to achieve the
organizational outcomes contained in the commission’s Authority and Purpose Policies.”
Included in the Commission’s Authority and Purpose Policies are the bylaws, organizational core
purpose, mission, vision, values, fundamentals, and planning themes. These policies are
summarized on the attached mission, vision, fundamentals, values, and planning themes
document.
DISCUSSION:
The purpose for the Strategic Plan is to establish long term direction and goals for an
organization and develop the plan to get there. A good strategic planning process incorporates
assessing risks and developing contingency plans based on risk mitigation in the journey toward
the long-term direction and goals.
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The leadership team underwent a process to identify new initiatives for go/no-go evaluation for
consideration in the annual business plan/budgeting process. These newly identified initiatives,
along with ongoing and incomplete initiatives, then undergo priority ranking.
All policies, decisions, initiatives, and tasks by ERMU on behalf of our consumer owners should
be in direct line to the ERMU mission, vision, and values. All planning is conducted through a
process which categorizes initiatives under commission-adopted planning themes aligned with
our mission, vision, fundamentals, and values. This framework clearly defines how ERMU is
expected to operate. This process is intentionally transparent to our consumer owners.
The following includes highlights from the 2021 initiatives and newly identified initiatives for
go/no-go evaluation. Staff is looking for the Commission to discuss high-level strategic themes
and initiatives. These high-level themes are categorized by the following six planning themes
which the commission adopted into policy. Staff is looking for the commission to have
consensus on these themes leading into the budgeting process. Additionally, the highlighted
initiatives identified below represent work in progress and/or forward-looking initiatives. These
initiatives have either already run through the budgeting process or are prioritized for inclusion
in future budgeting. Staff is looking for commission discussion on the initiatives and how these
priorities align with the commission’s intended strategic direction for the organization.
Review of the Strategic Plan
Theme 1: Communication – Improve the effectiveness of our communications inside the
organization, with our customers, and with the community.
• Live Chat System – Staff will explore the option of embedding a live chat system into our
website and or SmartHub to give customers the option to quickly get their question
answered without having to call us. Of course, for those who wish to call us, we will be
happy to talk with them.
• Disaster Recovery Plan – This is a continuing initiative staff started in 2019 to update our
disaster recovery plan and perform a disaster drill tabletop exercise. The work will be
coordinated with the City of Elk River Fire Chief. This plan, and its subsequent annual
review, is a requirement in the American Public Power Association’s (APPA) Reliable
Public Power Provider (RP3) designation. This initiative will continue through next year.
• Customer Satisfaction Feedback Tools – Staff will evaluate new customer satisfaction
feedback tools that are measurable and appropriately represent our customers. This
was an initiative started in 2019 and was put on hold in 2020 with the pandemic. As a
reminder, this was removed from the Utility Performance Metric Incentive
Compensation system (UPMIC) for the 2020 measurement period, however, could be
re-introduced when we have a viable measurement tool in place.
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• Jackson Street Water Tower – This is the remaining piece of the initiative from 2020; to
have a monument placed at the tower site acknowledging its historical significance.
• Display Options for Achievement Awards – This initiative is to research display options
for plaques, awards, etc. and additional branding signage for mission/vision items.
Theme 2: Personnel and Governance – Develop our most valuable and vulnerable assets…our
commissioners, employees, leaders, and future leaders.
• Develop Succession Plan for General Manager Retirement – With the upcoming
retirement of the General Manager staff would like to develop a succession plan
considering needs and internal staff options, planning for potential internal transitions
and external transitions.
• Develop Succession Planning Procedure – This is a carryover initiative to develop a
succession planning and staff addition procedure for use by the Wage & Benefits
Committee (W&BC). This was still identified as a need and should be completed before
the new GM is hired.
• Inventory Assistant – This position was identified as a potential future position in our
organizational chart. As we will have secure inventory storage at the Field Services
Building, this has been identified as a need in 2022.
• Governance & Management Policy Manuals – These are carryover initiatives from prior
years needing some additional work before being considered complete. The work
started in 2018 and completed in 2020 was the separation of the policies to the
appropriate category of Governance or Management. Many of the Governance Policies
were created as this was done and now there is mostly formatting, and some revision
left. There are a few Governance Policies to be developed (Third Party Attachment to
Assets, Margins, and Competitive Rates). The Management Policy Manual has a lot of
formatting and revision to undergo yet and is on hold until the Governance Policy
Manual is complete.
• Wellhead Protection Plan Amendment – This initiative is due to needing to submit our
plan amendment to the Minnesota Department of Health in 2023. There is review and
evaluation needed in preparation for this submittal which will take significant staff
resources.
Theme 3: Strategic Thinking – Create a culture of strategic thinking and ensure line of sight from
mission to vision.
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• Landfill Gas Plant (LGP) – This initiative is carried over as the current contract for the
LGP is through 2022. Staff is still evaluating the options related to the future of the LGP
past 2022.
• Volt/VAR Control – This is a carryover from previous planning sessions. This initiative is
about controlling our peak for better system management.
• Conservation Improvement Program (CIP) Redevelopment and Energy Policy – This
initiative is not new, but the focus has changed with the passage of the Energy
Conservation and Optimization (ECO) Act to develop programs in response to this
legislation.
• Load Management Programs – This initiative is dependent on an Advanced Metering
Infrastructure (AMI) vendor selection and implementation so is deferred until that is
complete in 2025.
• System Forecasting – Another carryover initiative, these forecast models will help us
plan for future growth and system needs to allocate capital resources appropriately.
Theme 4: Technology – Implement the prudent use of technology to improve efficiency and
increase customer choice, communication, and value.
• ESRI GIS Mapping – Staff continues to work on the implementation of the ESRI mapping
system including GPS data collection. While we have made great strides with this
initiative, there is still work to do. Staff is utilizing some of the mapping system now and
will transition over 100% upon final data updates.
• AMI and Smart Grid Analysis – This is another initiative that is a carryover from previous
years. Full AMI implementation is desired in 2025, and there are a series of steps that
must occur for this to be accomplished. This year the vendor selection needs to be
completed so that we can coordinate subsequent steps with our software provider.
• Meter Data Management System (MDMS) – This initiative is also part of AMI
implementation. Once a vendor is selected, the MDMS module needs to be scheduled
for implementation, which is a lengthy process, and thus its own separate initiative.
• Mosaic Utilization – Another carryover initiative, Mosaic is a National Information
Solutions Cooperative (NISC) product that was first introduced several years ago as a
very user-friendly application to create visually appealing graphics for better
understanding of the data. It was not as user-friendly as hoped and is an initiative to
research and explore its viability for our use.
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• Outage Management and Communications – This initiative is a collaboration of field
staff and office staff to work together to provide timely information to our customers in
outage situations. Until AMI is implemented, this is figuring out how to best capture and
disseminate helpful information to those experiencing an outage.
• Vault Retention – A new initiative to efficiently utilize the vault storage functionality in
NISC. A retention schedule and policies need to be created and then properly set up in
Document Vault for timely retention and removal of data.
• Cyber & Physical Security – Staff continues to work on this initiative, in conjunction with
the city IT staff and the joint committee created to evaluate cyber and physical security
for ERMU and the City.
• ERMU Fiber Backbone Buildout Plan – This was identified as a future initiative in
previous strategic planning sessions. A plan needs to be developed for how to build the
fiber network so that future budgeting needs can be incorporated.
• NISC Module Integration – Staff implemented Mobile WorkForce in 2019, one of the
first modules identified to take advantage of the efficiencies NISC provides. Now we
need to revisit the roadmap analysis of other modules to determine future
implementations.
• Battery Storage and Renewables – This is a new initiative to explore possibilities of
incorporating renewable energy generation and battery storage at an ERMU or City
building.
Theme 5: Growth – Assess the growth curve to make decisions regarding organizational change.
• Field Services Building Construction – The Field Services Building construction is
underway and will continue into 2022. This initiative focuses on the management of that
project with the construction manager and the architect for timely completion within
budget.
• Highway 10 Rebuild, Highway 169 Redefine – The impacts to our electric and water
infrastructure caused by the Highway 10 rebuild should be complete in 2021. The
improvements to Highway 169 are scheduled to begin in 2022 and continue through
2024, requiring electric and water system infrastructure changes.
• Backflow Prevention Program – This is a carryover initiative for protection of our water
resources and systems essential to the health of our customers. Key to this is backflow
testing of all devices attached to our distribution system to ensure contamination does
not occur. Staff has been working on a new process and related policies to be
implemented for noticing customers, providing our services, and tracking the testing
beginning in 2021.
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• New Substation Cargill – The capital budget identifies a Highway 10 Substation in 2022.
As the land for a substation on Cargill property has been identified, plans for the
construction need to be completed for the resources identified in the capital budget.
• Evaluate Water Model – We updated our water model in 2019 and 2020 but the
software system it is housed in is outdated and so we will be evaluating other options
for converting our current model to a modern system. This is a carryover initiative.
• New Substation Otsego – Long term this substation would provide strategically located
capacity to serve growth in this area of Elk River. The capital budget identifies an Otsego
Substation in 2025, and options for a substation location continue.
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.
• Organizational Effectiveness Survey – In 1Q 2019 a consultant was used to conduct an
organization effectiveness survey. The survey results identified themes and
opportunities for improvements. The leadership team has established action items
based on the survey results that will continue to be implemented in 2021. A repeat
survey will be conducted again in 2Q 2022.
• Schedule of Charges/Aid to Construction – This initiative is an internal evaluation of our
processes and charges for construction, to identify any discrepancies and establish
documentation of the process.
Summary
Staff is looking for commission discussion on the strategic plan and direction. In February 2021
when the commission reviewed the results of the 2020 annual business plan and the strategic
plan, the commission provided the following comments:
• A second request for including a Comparative Balance Sheet with the monthly income
statements financial presentation. This wasn’t completed with the first request due to a
programming backlog.
Are there other changes in strategy or direction that should be discussed?
ATTACHMENTS:
• ERMU Mission/Vision/Fundamentals/Values/Themes
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ERMUMN.COM | 763.441.2020 | 13069 ORONO PARKWAY | PO BOX 430 | ELK RIVER, MN 55330-0430
OUR
MISSION
OUR
VISION
OUR
VALUES
OUR
FUNDAMENTALS
To provide our customers with safe, reliable,
cost-effective and quality long-term electric
and water utility services. To communicate
and educate our customers in the use of
utility services, programs, policies and
future plans. These products and services
will be provided in an environmentally and
financially responsible manner.
Provide exceptional services and
value to those we serve.
Honest, accountable and
united in all that we do.
Services that reflect excellence,
dependability and expertise.
Respectful and engaged interactions
that are timely and clear.
A culture that protects our
customers, employees, and assets.
Provide the best value for the
services we deliver.
Safety, Reliability and Quality of Utility Services.
Customer Service and Employee Development.
Competitive Rates, and Financial and
Organizational Health.
INTEGRITY
QUALITY
COMMUNICATION
SAFETY
COMPETITIVE
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ERMUMN.COM | 763.441.2020 | 13069 ORONO PARKWAY | PO BOX 430 | ELK RIVER, MN 55330-0430
OUR
PLANNING THEMES
Improve the effectiveness of our communications inside the organization, with our customers
and with the community.
Develop our most valuable and vulnerable assets - our commissioners, employees, leaders,
and future leaders.
Create a culture of strategic thinking and ensure line of sight from mission to vision.
Implement the prudent use of technology to improve efficiency and increase customer choice,
communication and value.
Assess the growth curve to make decisions regarding organizational change.
Improve processes and measurement to better determine and report efficiency and effectiveness
of organization and to ensure financial and organizational health.
THEME 6 | PROCESS, MEASUREMENT AND FINANCIAL HEALTH
THEME 1 | COMMUNICATION
THEME 2 | PERSONNEL AND GOVERNANCE
THEME 3 | STRATEGIC THINKING
THEME 4 | TECHNOLOGY
THEME 5 | GROWTH
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