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4.2 ERMUSR 07-12-2022��i Elk River � Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: ERMU Commission Theresa Slominski — General Manager MEETING DATE: AGENDA ITEM NUMBER: July 12, 2022 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 2022 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 2022 Governance Agenda adopted by the Commission in December 2021, 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. Per the policy, 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 the organization and develop the plan to get there. A good strategic planning process incorporates Page 1 of 4 57 assessing risks and developing contingency plans based on risk mitigation in the journey toward the long-term direction and goals. The leadership team underwent a different strategic process this year, focusing on outcomes to identify the direction of our organization. The outcome of "What do we want ERMU to look like and be in the future?" was discussed and then four specific focus areas for our organization were identified: 1) Employees, 2) Technology, 3) Reliability, Rates and Environmental Stewardship, and 4) Safety. We created statements of focus from these four areas, and they are as follows: • We will promote a culture of continuous improvement that employees feel valued and have growth opportunities and are engaged in and feel a part of ERMU's success and remain with us. • We will capitalize on existing and future technologies to achieve timely and useful information to enhance employee's and customer's experiences. • We will provide the best value to our community with service rates, reliability, and environmental stewardship. • We will continuously improve our safety culture to make sure everyone can work with pride and goes home safe. From there a roadmap and prioritization of initiatives will be developed for consideration in the annual business plan/budgeting process. A high-level roadmap was started that identifies the desire to provide employee development opportunities, continue Advanced Metering Infrastructure (AMI) deployment and mapping efforts, evaluate rates and reliability levels, and promote a culture of safety. Some of these involve minimal or no budgetary impact, and some will have significant budgetary impact (like AMI). A three-year plan was started and from there we need to develop the initiatives that are on the dashboard you are so used to seeing. A complete new list of 2023 initiatives and dashboard will follow at a future commission meeting. All policies, decisions, initiatives, and tasks by ERMU on behalf of our consumer owners should be in direct line with 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 2021-2022 initiatives that were completed. They were under Theme 4: Technology, and Theme 5: Growth. Staff is looking for the Commission to discuss high-level strategic themes and initiatives as discussed above with the focus statements. Staff is looking for the Commission to have consensus on these themes leading into the budgeting process. Staff is looking for commission discussion on the focus areas and how these priorities align with the Commission's intended strategic direction for the organization. Page 2 of 4 m Review of the Strate�ic Plan Theme 1: Communication — Improve the effectiveness of our communications inside the organization, with our customers, and with the community. Theme 2: Personnel and Governance — Develop our most valuable and vulnerable assets...our commissioners, employees, leaders, and future leaders. Theme 3: Strate�ic Thinkin� — Create a culture of strategic thinking and ensure line of sight from mission to vision. Theme 4: Technolo�y — Implement the prudent use of technology to improve efficiency and increase customer choice, communication, and value. • Outage Management and Communications—This initiative is a collaboration of field staff and office staff to work together to provide timely and accurate information to our customers in outage situations. Guidelines were established for communication from the field to the office and then out to customers via the website and social media as timely as practicable. Vault Retention — This new initiative was established to efficiently utilize the "Document Vault" storage functionality in NISC. A retention schedule and policies were created for the financial documents and then properly set up in Document Vault for timely retention and removal of data. This process will be replicated in other modules within NISC now. • Cyber & Physical Security—This is a carryover initiative, in conjunction with the City IT staff and the joint committee created to evaluate cyber and physical security for ERMU and the City. The policies have been created and now need to be reviewed and updated annually. Theme 5: Growth —Assess the growth curve to make decisions regarding organizational change. Highway 10 Rebuild — This initiative was to coordinate electric and water infrastructure changes to accommodate the improvements of the Highway 10 rebuild. Trail lights were installed along Highway 10, and water main placement at Upland Avenue and Proctor Road was completed. • Backflow Prevention Program —This is a carryover initiative for protection of our water resources and systems essential to the health of our customers. The initiative was to develop a policy and implement plans for tracking and testing of backflow prevention devices (RPZs and PVBs). Key to this is the testing of all devices attached to our distribution system to ensure contamination does not occur. Policies were updated, we have been working with HydroCorp for tracking tests and sending notices to residents, and staff has been testing devices. Page 3 of 4 59 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. Summary Staff is looking for Commission discussion on the strategic plan and direction. In February 2022 when the Commission reviewed the results of the 2021 annual business plan and the strategic plan, the Commission had no requested changes or additions. Are there other changes in strategy or direction that should be discussed? ATTAC H M E NTS: • ERMU Mission/Vision/Fundamentals/Values/Themes Page 4 of 4 .1 OUR MISSION To provide our customers vciith safe, reliable, cost-effective and quality long-term electric and vciater utility services. To communicate and educate our customers in the use of utility services, programs, policies and future plans. These products and services vciill be provided in an environmentally and financially responsible manner. OUR VISION Provide exceptional services and value to those We serve. OUR FUNDAMENTALS Safety, Reliability and Quality of Utility Services. Customer Service and Employee Development. Competitive Rates, and Financial and Organizational Health. OUR VALUES � � u Q � r� INTEGRITY Honest, accountable and united in all that vcie do. QUALITY Services that reflect excellence, dependability and expertise. COMMUNICATION Respectful and engaged interactions that are timely and clear. SAFETY A culture that protects our customers, employees, and assets. COMPETITIVE Provide the best value for the services vcie deliver. OUR PLANNING THEMES THEME 1 I COMMUNICATION Improve the effectiveness of our communications inside the organization, vciith our customers and with the community. THEME2 I PERSONNELANDGOVERNANCE Develop our most valuable and vulnerable assets - our commissioners, employees, leaders, and future leaders. THEME 3 I STRATEGIC THINKING Create a culture of strategic thinking and ensure line of sight from mission to vision. THEME 4 I TECHNOLOGY Implement the prudent use of technology to improve efficiency and increase customer choice, communication and value. THEME 5 I GROWTH Assess the grovcith curve to make decisions regarding organizational change. THEME 6 � PROCE55, MEASUREMENTAND FINANCIAL HEALTH Improve processes and measurement to better determine and report efficiency and effectiveness of organization and to ensure financial and organizational health.