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4.2 ERMUSR 06-03-2025______________________________________________________________________________ Page 1 of 1 UTILITIES COMMISSION MEETING TO: ERMU Commission FROM: Mark Hanson – General Manager MEETING DATE: June 3, 2025 AGENDA ITEM NUMBER: 4.2 SUBJECT: Annual Commission Performance Evaluation ACTION REQUESTED: None BACKGROUND/ DISCUSSION: Per the Governance Policy G.2c Agenda Planning and consistent with the 2025 Governance Agenda, the Commission conducts a formal evaluation of its own performance annually. The intention of the Commission holding themselves accountable through an evaluation process is to develop a culture of excellent governance. Following evaluation, the Commission works with the general manager to address specific needs or gaps identified. These may include or be related to governance, legal requirements, or specific knowledge and skills required for decision-making related to upcoming initiatives and/or results-oriented goals. Following the Commission’s recommendation in July of 2023, the evaluation was changed from a self-evaluation to a 360-degree review by incorporating manager input. The 2025 Annual Commission Performance Evaluation Results are attached for review and discussion. ATTACHMENTS: • 2025 Annual Commission Performance Evaluation Results 50 2025 Commission Performance Evaluation ERMUMN.COM | 763.441.2020 | 13069 ORONO PARKWAY | PO BOX 430 | ELK RIVER, MN 55330-0430 51 COMMISSION PERFORMANCE EVALUATION 2025 Comments: Commissioner 5.00 Commissioner 5.00 Commissioner 4.00 Commissioner 4.00 Commissioner 5.00 Average 4.60 Manager 4.00 Manager 5.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Average 4.13 Overall Average 4.31 • The commissioners may not always agree on how to get to the outcome but after discussion the group unanimously agrees on the best way to handle the issue. • Integrating the governance policy review into the commission meetings has been helpful in aligning commissions decisions with ERMU’s purpose, mission, vision, and values. Question 2: The Commission partners with the City on opportunities to bring greater value to the community, while maintaining its responsibility to ERMU customers as well as its governance and conduct policies. Commissioner 5.00 Commissioner 4.00 Commissioner 5.00 Commissioner 4.00 Commissioner 4.00 Average 4.40 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Average 4.00 Overall Average 4.15 Comments • Both commercial and residential developments • Good balance is maintained between ERMU Customer responsibilities and City opportunities. That is appreciated. • I think we benefit from having council members on our commission, but it was nice to see that there was enough trust in the partnership that the council was ok with not filling commissioner Bell’s spot with another council member. Question 1: The Commission makes decisions in accordance with ERMU’s purpose, mission, vision, and values to achieve desired results and collectively supports those decisions. 5 - Strongly Agree 4 - Agree 3 - Neither Agree nor Disagree 2 - Disagree 1 - Strongly Disagree 52 COMMISSION PERFORMANCE EVALUATION 2025 Comments: Commissioner 5.00 Commissioner 5.00 Commissioner 4.00 Commissioner 5.00 Commissioner 5.00 Average 4.80 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 5.00 Manager 4.00 Manager 4.00 Manager 5.00 Average 4.25 Overall Average 4.46 • There has been more opportunities for the commissioners to go to different events and it allows a broader training and learning experience of how utilities operate across the country. • They put time and thought into decisions without making rash or rushed decisions. They are open to extra opportunities and open to staff attending extra education and industry training. • We’ve had some lengthy meetings and difficult conservations recently with the water service lines but the commission seemed well prepared and up to the task! • I’ve noticed that the commissioners really took last year’s feedback to heart and made a strong effort to be present and engaged during meetings—even when they’ve run longer than expected. Question 4: The Commission as a body and its individual members never provide direction or job performance evaluation, either formal or informal, to any employee other than the general manager. Commissioner 4.00 Commissioner 4.00 Commissioner 4.00 Commissioner 4.00 Commissioner 4.00 Average 4.00 Manager 4.00 Manager 5.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 5.00 Average 4.25 Overall Average 4.15 Comments • I assume this to be true! • Follow chain of command correctly with all I have witnessed • I think this has gotten better as the relationship between Mark and the commission has grown. Question 3: Commission members are present and engaged during official meetings, prepared to perform their assigned duties, participate in discussion, and make decisions. Members also take advantage of opportunities for continuing education, development, and industry networking. 5 - Strongly Agree 4 - Agree 3 - Neither Agree nor Disagree 2 - Disagree 1 - Strongly Disagree 53 COMMISSION PERFORMANCE EVALUATION 2025 Comments: Commissioner 4.00 Commissioner 4.00 Commissioner 4.00 Commissioner 5.00 Commissioner 4.00 Average 4.20 Manager 4.00 Manager 5.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 5.00 Manager 4.00 Manager 4.00 Average 4.25 Overall Average 4.23 • I think the commission has a good set of metrics monitoring performance • I think they ask good questions during meetings and will ask for additional information to be provided in subsequent meetings/discussions when they feel it’s necessary. Question 6: The Commission demonstrates the ability, through governance and oversight, to plan for immediate and future needs by effective budgeting and planning consistent with policy. Commissioner 4.00 Commissioner 4.00 Commissioner 5.00 Commissioner 4.00 Commissioner 5.00 Average 4.40 Manager 4.00 Manager 5.00 Manager 4.00 Manager 4.00 Manager 5.00 Manager 5.00 Manager 4.00 Manager 4.00 Average 4.38 Overall Average 4.39 Comments • No commissioner comments • They take approving budget seriously, and strive to keep the company in a healthy position • Similar to the last question, I think they ask good questions and aren’t afraid to postpone decisions when necessary so staff can provide additional information at future meetings. The trust between the commission and staff is evident and appreciated. Question 5: The Commission effectively monitors organizational performance utilizing either internal or external methods, measuring performance against expected outcomes and clearly defined goals. 5 - Strongly Agree 4 - Agree 3 - Neither Agree nor Disagree 2 - Disagree 1 - Strongly Disagree 54 COMMISSION PERFORMANCE EVALUATION 2025 Comments: Commissioner 4.00 Commissioner 5.00 Commissioner 5.00 Commissioner 4.00 Commissioner 4.00 Average 4.40 Manager 4.00 Manager 5.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Manager 4.00 Average 4.13 Overall Average 4.23 • No commissioner comments • They will ask Jared directly for legal opinions during meetings and/or task staff to further research legal implications. Question 7: The Commission ensures the protection of assets, the mitigation of risks, and legal compliance through governance and oversight. Commissioner 4.43 Commissioner 4.43 Commissioner 4.43 Commissioner 4.29 Commissioner 4.43 Average 4.40 Manager 4.00 Manager 4.71 Manager 4.00 Manager 4.00 Manager 4.29 Manager 4.29 Manager 4.00 Manager 4.29 Average 4.20 Overall Average 4.30 Respondent Overall Average 5 - Strongly Agree 4 - Agree 3 - Neither Agree nor Disagree 2 - Disagree 1 - Strongly Disagree 55 COMMISSION PERFORMANCE EVALUATION 2025 5 - Strongly Agree 4 - Agree 3 - Neither Agree nor Disagree 2 - Disagree 1 - Strongly Disagree Commissioners 2024 Commissioners 2025 Managers 2024 Managers 2025 Mission Focused Partners with City Commission Evaluation Comparison Prepared to Perform Directs GM Protects Assets Plans for the future Monitors Performance 56 COMMISSION PERFORMANCE EVALUATION 2025 Question 8: With respect to the Commission’s performance, what has been done well? • Used different opinions on issues to come up with the best solutions. • The freedom to express a different opinion on topics without feeling pressured by the other commissioners. • Discussion and compromise has helped to achieve unanimous decisions. • The Commission has done a good job working with Mark to closely control expenses and operate within our budget. The Commission also updated the competitiveness of ERMU pay and benefits by working through and implementing the comp worth study. • The commissioners have engaged in meaningful discussions over the past year, leading to outcomes where every commissioner had a chance to be heard. • Conversation’s Items have been talked through. Everyone is able to give their opinion. No rushed discussion or vote taken. • Commissioners consistently attend and participate in meetings. • Commission members consistently demonstrate active engagement during meetings by participating in discussions and asking questions of staff and each other. • They have ERMU as a company in their best interests They listen to the company personnel first and respond second Treat Company employees well They devote time to the Commissioner role • The relationship and trust with staff are very strong, making it a great place to work. The commission does not shy away from asking for additional information when needed yet still trusts staff’s opinion and recommendations as subject matter experts. • This year, the Commission addressed several significant issues with both financial and morale implications. They took the time to fully understand the impact of their decisions, which was greatly appreciated. • Effective discussions pertaining to some difficult issues. 57 COMMISSION PERFORMANCE EVALUATION 2025 Question 9: With respect to the Commission’s performance, what should be done differently? • Can’t think of anything. Think we have an outstanding commission • Nothing. • Continued education on industry trends to make informed decisions. • I think the Commission is operating really well right now. I would note that the committee structure could probably be utilized more to facilitate more in depth discussions before the issues are brought to the full commission. • This year has been good, if anything maybe have more interaction with staff. What I mean by that is. Maybe just stop in and say hi. Show you care, have simply conversation on how things are going. Donuts go along way here. :) • Not sure if it’s different, but effort to onboarding and bringing the next Commissioner up to speed is appreciated • Nothing comes to mind, it will be interesting to see what, if anything, changes with a new commissioner. • While Mark is currently your only employee, it’s important to ensure that all managers are given the same level of respect and time when presenting. There have been times when certain managers were cut short while answering, or when the same question was directed to another manager. This can give the impression that there’s a lack of confidence in the original response. • Caution must be used when making decisions that contradict existing policy or practices of the utility. Bear in mind that these types of decisions may have adverse repercussions in the future. 58 COMMISSION PERFORMANCE EVALUATION 2025 Question 10: With respect to ERMU governance, what additional comments do you have? • We govern well. The toughest issue is employee wages and benefits. I feel like the five of us are on an island when it comes to that topic. • I really appreciate seeing, and being a part of, an organization with such a high degree of mutual respect between staff and management and between staff and the commission. • Continue to ask thoughtful questions, seek deeper understanding, and approach discussions with curiosity—this helps foster informed decisions and strong collaboration. • The commission has become a very cohesive group with each commissioner having a diverse background of experience that makes them together a well-rounded team. 59