5.4a ERMUSR 09-14-2021UTILITIES COMMISSION MEETING
TO:FROM:
ERMU Commission Theresa Slominski - GeneralManager
MEETING DATE: AGENDA ITEM NUMBER:
July 13, 2021 5.2
SUBJECT:
Wage & BenefitsCommitteeUpdate
ACTION REQUESTED:
Approve all action items as outlined below to be effective January 1, 2022.
DISCUSSION:
On October 13, 2020, the Wage & Benefits Committee (WBC) held an open meeting for
employees to submit wage and benefit suggestions for consideration by the Committee. A
representative group of employees presented several suggestions focused on the retention of
employees. Several items were implemented in 2021 and two were held over for discussion and
possible implementation in 2022: Longevity Pay, and additional Vacation Days. The Committee
met on May 26, 2021, to review the research from these two items. The Committee submits
the following for Commission consideration:
1. Longevity Pay – There were two ideas presented from the employees for
consideration of awarding Longevity Pay, based on percentages of pay, which ranged
from $1,000 at 5 years of service to $7,000 at 20 years of service. The Committee
reviewed these ideas and revieweda 2016 survey from Minnesota Municipal Utilities
Association (MMUA)regarding benefits among municipalutilities that had information
on peers’ implementation of Longevity Pay. The survey results were varied and seemed
to be less than either of the ideas presented. The Committee was favorable to
implementing Longevity Pay, howeveras additionalinformation was needed, the
Committee requested human resources staff to do some more research and provide an
update.
Through MMUA, 33 utilities were surveyed in the state of Minnesota and 9 respondents
currently offer a longevity pay incentive to employees who reach specified years-of-
service milestones at their organization. Some awarded incentives at 8 years, however
most started at 10 years and increased in increments of 5 years through 30 years of
service. The incentive varied in dollar amounts, some awarding a percentage of pay and
some flat dollar amounts. Depending on the rate of pay, the incentives ranged from
$500 to $1,000 at 8-10 years, with a maximum of approximately $2,500 to $5,000 at 20-
30 years. There was a single utility that awarded one longevity incentive of 1% at 20
years of service (so approximately $500 to $1,000 depending on rate of pay.)
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The Committee favored a longevity incentive that isthe samedollar amount awarded to
all employees, and not dependent on rate of pay. The Committee also considered that
we have current long-term employees that we did not want to be negatively affected in
implementing a plan now thatwould have no reward available for them. To minimize
this the Committee chose to extend the program beyond 25 years. We reviewed
multiple scenarios specific to our employee population and are recommending a
longevity plan starting at 8 years of service, increasing in four-year increments, through
32 years of service. The Committee is recommending one-time payments startingat
$1,200 with a gradual increase in dollar amounts as the tenure increases, with a
maximum of $4,000 at 32 years of service. The dollar amounts would be awarded
monthly by handing out a physical check to the employee at the Commission Meeting,
with the opportunity for Management and Commissioners to thank the employeefor
their service. The longevity plan proposed is below:
8 years $1,200
12 years $1,400
16 years $1,600
20 years $2,000
24 years $2,400
28 years $3,500
32 years $4,000
2. Vacation – Currently, the vacationmaximum is 25 days, which is reached after 19
years of service. It was requested to change the schedule so that staff earns 26 days in
year 20, 27 days in year 22, and 28 days in year 24 (increasing the maximum by 3 days).
The Committee reviewed data from the 33 utilities surveyed and was open to increasing
the vacation accrualas requested.
Additionally, the Committee discussed the recent change to the City of Elk River’s
vacation schedule to be more competitive in attracting and retaining talent. That change
was 15 days of vacation at the start of employment, through year 5. Utility employees
receive10 days in years 1-3, 12 days in year 4, 13 days in year five, and 15 daysin years
6-9. The Committee is proposing to start employees at 12days of vacation in years 1-4,
with years 5-9 remaining the sameaccrual(15 days). The vacation changes proposed are
below:
0-4 years 12 days
20-21 years 26 days
22-23 years 27 days
24+years 28 days
ACTION REQUESTED:
The Committeerecommends the Commissiontake the followingactions:
Approve Longevity Payperproposedscheduleandamounts.
Approve additional vacation accruals beyond 25 daysandchange the beginning accrual
as proposed.
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