5.07 EMRUSR 11-12-2024�i
Elk River --�-
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Mark Hanson - General Manager
MEETING DATE:
AGENDA ITEM NUMBER:
November 12, 2024
5.07
SUBJECT:
Wage & Benefits Committee Proposed 2025 Adjustments
ACTION REQUESTED:
Approve the 2025 Wage and Benefits Adjustments, effective January 1, 2025.
• Set a 2025 wage adjustment
• Set the 2025 UPMIC scorecard criteria and goals
• Rescind the Purchased Vacation Time policy
BACKGROUND:
Wage & Benefits Committee (WBC) meetings were held on September 23 and October 8, 2024,
to review possible wage and benefits adjustments for 2025. The September 23 agenda included
four items for discussion:
1. Annual Staff Presentation
2. Annual Wage Adjustment Process
3. Utilities Performance Metric Incentive Compensation (UPMIC) Policy
4. Review of Purchased Vacation (PVT) Time Policy
Staff representatives opened their September 23 remarks by expressing their appreciation for
the review and approval of the company -wide compensation study. They went on to make only
one request for 2025: an annual wage adjustment for all employees equal to the average
lineworker adjustment within the seven "metro average" utilities (Anoka, Chaska, Great River
Energy, North St. Paul, Shakopee, Wright Hennepin Electric, and Connexus).
At the October 8 meeting, General Manager Mark Hanson presented a revised organizational
chart reflecting the addition of a water operator position and the conversion of an existing
water operator to a lead water operator.
DISCUSSION:
2025 Wage Adjustment (motion/direction required): At the October 8 meeting, the average
adjustment for the seven metro average utilities was computed as 3.85% with a "best guess"
adjustment used for one of the seven utilities. The Committee supported bringing forward the
3.85% adjustment for commission consideration. Since the October 8 meeting, the adjustment
for the last utility has been vetted and confirmed. The average adjustment for the seven metro
utilities is now at 4.54%. As in years past, the metro average is presented as a data point for use
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by the Commission in setting the annual wage adjustment. The Commission retains the
flexibility to set the annual wage adjustment at any amount it deems appropriate.
Annual Wage Adjustment Process (information only): The Committee discussed the need for
ERMU to adopt a consistent, market -based practice for computing the annual wage
adjustment. Such a practice would keep our wages slightly above the market midpoint as was
desired by the Commission when discussing the recently approved compensation study. The
Committee discussed applying the lineworker metro average adjustment to all employees since
it was a local area average that was specific to the utility industry. It was discussed that some
years the metro average would lag other market indicators such as the Consumer Price Index or
the cost of inflation, while other years it would be higher. Overall, history has demonstrated
that the metro average and the market indices tend to balance out over time. The Committee
was split, some members felt the applicability of the metro average made it the ideal choice for
a consistent practice while others felt locking into a consistent practice was too limiting. The
consensus was the metro average was a reasonable starting point, but definitive use should not
be assumed as extenuating circumstances may require adjustments.
UPMIC Policy and Scorecard Updates (motion/direction required): Over the course of the two
WBC meetings, several updates to the UPMIC were discussed to ensure the UPMIC measures
are reasonable and achievable. The proposed scorecard (attached) includes the recommended
adjustments. These updates include:
• Implementation of a two-tier system, with standard goals awarded at 2% and stretch
goals awarded at 3%
• Introduction of more challenging goals for two electric criteria (SAIDI and SAIFI) and the
inventory accuracy criteria
• Addition of a Strategic Planning (Dashboard Progress) criteria
• Addition of a Conservation Improvement Program (CIP) criteria
• Removal of the Financial Reserves criteria
Review of Purchased Vacation (PVT) Time Policy (motion/direction needed): The Committee
discussed rescinding the PVT Policy. The PVT policy and its record -keeping can be confusing and
recent changes in the accrual of vacation hours have offset the need for it. The Committee
determined the policy should be rescinded.
Revised organizational chart (information only): The Committee reviewed a revised
organizational chart reflecting an additional water operator position and the conversion of an
existing water operator position to a lead water operator. The changes are needed in
anticipation of drilling two new water wells in 2025 that would be followed by up to two new
water treatment plants. The Committee supported the recommended updates to the
organizational chart.
ATTACHMENTS:
• 2025 Proposed UPMIC Scorecard
• 2024 ERMU Organizational Chart
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