4.3 EMRUSR 12-10-2024��i
Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Mark Hanson — General Manager
MEETING DATE:
AGENDA ITEM NUMBER:
December 10, 2024
4.3
SUBJECT:
2025 Performance Metrics and Incentive Compensation Policy
ACTION REQUESTED:
Approve the Performance Metrics and Incentive Compensation Policy and Scorecard for 2025
BACKGROUND:
The Commission adopted the Utilities Performance Metrics and Incentive Compensation
(UPMIC) Policy in December 2012 along with revisions in 2016, 2019, 2021, 2022, and 2023.
This is a company -wide performance -based program designed to incentivize employee
commitment towards the company's success.
DISCUSSION:
Per policy, the metrics for measurement of the designated year need to be determined before
the start of the designated year. This allows for timely communication of any changes before
performance measurement begins. As presented at the November 12 Commission meeting,
Staff recommends several changes to the scorecard for 2025:
• Reduction of the maximum percentage awarded from 3% down to 2%.
• Introduction of more challenging goals for two electric criteria (SAIDI and SAIFI) and the
inventory accuracy criteria.
• Addition of a Strategic Plan Category, including a Dashboard Progress Sub -Category.
• Addition of a Communication/Customer Service Category, including Clean Energy Choice
Program Participation and Conservation Improvement Program (CIP) Sub -Categories.
• Removal of the Financial Reserves criteria.
The proposed UPMIC scorecard for the 2025 measurement year is attached for approval.
FINANCIAL IMPACT:
No additional financial impact for the 2025 budget year. The potential 2.0% distribution is
budgeted for and accrued throughout the year for audit purposes. Any necessary adjustments
are made at year end. The actual distribution will be awarded after the 2024 audit is approved
in 2025.
ATTACHMENTS:
• ERMU Policy— G.4g1—Performance Metrics and Incentive Compensation Policy
• ERMU Policy— G.4g1a — 2025 Performance Metrics & Incentive Compensation Scorecard
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