5.3 ERMU 12-12-2023Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Mark Hanson — General Manager
MEETING DATE:
AGENDA ITEM NUMBER:
December 12, 2023
5.3
SUBJECT:
Compensation Study Update
ACTION REQUESTED:
Approve Compensation Study Professional Services Agreement with Baker Tilley
BACKGROUND:
At the October 2023 commission meeting, staff presented an in-house, utility -wide
compensation study as part of the Wage & Benefit Committee update. After discussion and
clarifying questions, the Commission directed staff to identify a third -party consultant to
conduct a compensation study with all ERMU positions reviewed. For 2024 budget planning,
staff were also directed to include $30-$40K for consultant fees and $133K for possible salary
adjustments (pending study results).
DISCUSSION:
HR Generalist Megan Zachman and General Manager Mark Hanson met with, and received
proposals from, three industry leading public sector compensation consultants: DDA Consulting,
Gallagher Consulting, and Baker Tilley. Consultants were interviewed to provide additional
insight into their process, timeline, and experience. The interviews also focused on their
approach to resolving differences with potential comparable utilities regarding geographic
location, utility size/type, and competing labor markets. The table below summarizes the
proposed fees, as well as the identified pros and cons, for each of the three consultants.
Name
Fee
Pros
Cons
DDA
$19,475
Price; local
Least adaptable process to
manager/analyst; shortest
account for unique positions,
timeline
geographic challenges, and
local market conditions
Baker
$25,100
Experience; adaptability;
Manager is not local (but
Tilley
semi -local; moderate fee
analyst is)
Gallagher
$35,500
Utility -arena experience;
Price; national firm with non -
adaptability
local analysts/managers;
longest timeline
Page Iof2
151
The information gathered was then reviewed to identify the consultant that offered ERMU the
best overall value. Baker Tilley stood out for their combination of experience, price, timeline,
and approach. We believe they offer ERMU the best overall value.
Since the compensation study will be based on duties and responsibilities found in our job
descriptions, managers have been tasked with reviewing and updating job descriptions for all
positions in each of their respective work groups.
NEXT STEPS:
Staff recommends approval of a professional services agreement with Baker Tilly for $25,100 to
complete a utility -wide compensation study. The project is expected to kick-off in early January
and be complete by the end of April. Staff anticipates providing a formal update at the February
commission meeting to review recommended comparable utilities. A final presentation of
results will be provided at either the April or May commission meeting.
ATTACHMENTS:
Baker Tilley Professional Services Agreement for Compensation Study
Page 2of2
152