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5.3. ERMUSR 09-09-2008~/ Elk River Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 September 3, 2008 To: Elk River Municipal Utilities Commission Jerry Takle John Dietz Jerry Gumphrey From: Bryan Adams Subject: Policy Amendments Phone: 763.441.2020 Fax: 763.441.8099 At the August 12th Elk River Municipal Utilities Commission meeting, staff was directed to draft a number of personnel policies per the attached motion. As you recall these proposed policies are a result of fraud allegations that were found to be without merit. Staff has started this process. On September 8th, Steve McDonald of Abdo Eick & Meyers will start the process of looking into our Work Order System and Inventory and Internal Control System. Attached are three proposed policies for discussion. They are Employee Theft, Sale and Trade of Unwanted Supplies and Equipment, and Employees Use of Supplies and Equipment. These policies were drafted with the help of a committee of staff members. Staff requests that we have access to the auditor's report so we can more efficiently address the appropriate issues in these policies. In the process of drafting these policies, staff is guessing or trying to anticipate the actual issue we are trying to solve. The first issue is Employee Theft which is addressed as dishonesty or stealing in the current policy. Staff thinks this commission may be looking at a Business Conduct type policy, which is common in many employee handbooks. Attached is a couple of versions for your comments. Current Elk River Municipal Utilities policies and policies from other organizations for Sale and Trade of Supplies and Equipment and Elk River Municipal Utilities Employee Use of Supplies and Equipment are included for your comments. ce.i~ ~~~-- 9i3~-933 I move that policies addressing the following be drafted and brought back to the ERMU Commission for approval no later than December 31, 2008: Sales and Trades of ERMU Vehicle and Equipment; Employee Theft; Use of ERMU Supplies and Equipment; Work Order System; Inventory and Internal Control Systems; Segregation of Duties; Performance Reviews; Job Posting Procedures; Cell Phone and Internet Use; Employee Theft 1 further move that in the interim, until the policies above are approved by the Commission, no employee or elected official may purchase any ERMU equipment, vehicles, or supplies under any circumstances; no employee shall be allowed to purchase supplies through any vendor using EItMU's account; employees shall reimburse ERMU for all personal use of ERMU cell phases and long distance service; personal use of internet service during work hours is prohibited; no employee may take or use any ERMU equipment or vehicles for personal use. Violation of any of these will be grounds for immediate terniination. The above policies should include the following: • All used equipment not traded will be sold at public auction. • ERMU employees involved in negotiating trade values of property are banned from purchasing that property from the vendor post trade. • ERMU employees are banned from purchasing goods either from or through the Utilities, unless these goods are made equally available to ordinary citizens for the same price. • Specific work orders be created for linemen to log theu~tim~ on each maintenance job that is expected to take more than eight ]lours. This will allow for better tracking of the productivity of linemen and give management better tools to analyze each project. • Create a perfornrance review process to insure that all employees are reviewed by their supervisors annually. • A no tolerance fraud policy be implemented that all employees read and sign, acknowledging their understanding of said policy. • ERMU should review our scrap metal policy and come up with alternatives to insure that we are receiving proper value for that scrap inventory. Proper segregation of duties should be involved in this process. • ERMU hire Abdo, Eick and Meyers to completely evaluate our inventory system and recommend new procedures and policies. • The policy of allowing ERMU employees to purchase inventory or scrap items be discontinued. Question of Employee Theft Current Policy: 22. DISMISSAL OR LAY OFF All new employees shall be on probation for a period of one hundred eighty (180) days. Continued employment during this period shall rest solely with the discretion of the Utilities Commission. Subsequent to that period, the employee shall attain regular status subject to the following: Employees on regular status may be dismissed only for cause, which may include, but is not limited to, the following: Improper conduct or language, insubordination, failure to do the work assigned, dishonesty or stealing, sale, transfer of, or possession of, or being under the influence of intoxicating beverages or controlled or mood altering substances while on the job. The Utilities Commission reserves the right to eliminate positions or reduce the hours associated with a position. City of Elk River's version of this polio The City retains the right to take any disciplinary action it believes appropriate. The type of discipline imposed will be based upon the nature and severity of the infraction and the conditions surrounding the incident. The City retains the sole discretion to determine what behavior warrants disciplinary action and what type of disciplinary action will be imposed. Examples of disciplinary actions include, but are not limited to: Oral reprimand; and/or Written reprimand; and/or Suspension; and/or Demotion; and/or Termination Disciplinary actions can be taken in any order. In some cases, one or more disciplinary actions will be taken before termination; in other cases, termination will be immediate. The circumstances surrounding the reason for disciplinary action will be reviewed on a case-by- case basis to determine the appropriate level of disciplinary action, if any. While the City strives for consistency, the level of discipline taken in any given case does not establish a precedent for future similar circumstances. This policy does not change the fact that employment with the city is at-will, meaning that an employee has the right to terminate it, at any time and for any reason, with or without cause or notice, and that the City has that same right. Question of Sale and Trade of Unwanted Supplies and Equipment Current Policy: No written policy. By practice, all used equipment of any value is either traded in when it is replaced, sold using public advertising and sealed bid, or public auction in cooperation with either the City of Elk River or Elk River School District. Recyclable items or items of questionable value are placed in the dumpster or recycling bins. Items of some value that cost money to dispose of (old poles, cross arms, wood chips, wood cable reels) are given to the general public if they ask or employees may take them. City of Elk River's Policy Modified to Elk River Municipal Utilities Application: From time to time, Elk River Municipal Utilities property becomes obsolete, damaged, or is not needed. Such equipment will be disposed of by the Elk River Municipal Utilities through salvage, trade, public auction, bid, or other means. If it is determined that a sale or auction is the best way to dispose of property, a notice must be advertised in the official newspaper and will be posted at Elk River Municipal Utilities office and other locations as deemed appropriate. The appropriate department head will determine the minimum price for each item to be sold. ~ In no instance will anything of value be given away free, except promotional items, to anyone including employees; • An employee may purchase no more than one motor vehicle from the Elk River Municipal Utilities or another political subdivision in any 12 month period; • Employees involved in the auction or process pertaining to the administration and collection of sealed bids are prohibited from purchasing Elk River Municipal Utilities property. In the case of used and unwanted utility poles, cross arms, wood chips, wood cable reels where there is a disposal cost, Elk River Municipal Utilities employee or general public may take these items at no cost. Unauthorized removal of Elk River Municipal Utilities property or its conversion to personal use may result in discipline up to and including termination. Question of Elk River Municipal Utilities Employees Use of Supplies and Equipment Current Policy: No Written Policy. By practice, employees on occasion use Elk River Municipal Utilities supplies and equipment for personal use. This includes welding equipment and supplies, vehicle wash bay, scaffolding, tree saws, etc. Personal use of vehicles or heavy equipment is prohibited. Any equipment damage is repaired or replaced by employee. This work practice has worked well with no abuses. Also copying equipment, fax and postage machines are being used, with postage money being paid by employees. Also in the past, employees have purchased items thru the company, taking advantage of the company discount, but always reimbursing the company for the price of the item. I stopped this policy approximately nine months ago when I discovered it was happening. City of Elk River's Policy Modified to Elk River Municipal Utilities Application: All Elk River Municipal Utilities property and equipment is publicly owned. Elk River Municipal Utilities owned equipment and facilities of significant value are not available for personal use by employees. Personal use of all Elk River Municipal Utilities vehicles, machinery, tools, and other equipment of significant value is strictly prohibited. Copy and fax machines are allowed to be used for personal use but usage should be kept to a minimum. Use of i~~~ the postage machine is allowed if postage money is repaid. Great River Energ_y's PolicXModified to Elk River Municipal Utilities Application: Ells River Municipal Utilities provides each employee with the facilities, equipment, and related training needed to perform his or her job effectively. In return, each employee is expected to treat all provided items with care and respect. This means that these materials are to be used solely to conduct Elk River Municipal Utilities business. Copy and fax machines are allowed to be used for personal use but usage should be kept to a minimum. In addition, you should report to your supervisor any damage or need for maintenance on equipment. Safety comes first at Elk River Municipal Utilities. Remember to review instructions and procedures and to receive the proper training before using company equipment. If you have questions about the safety of any job duty or piece of equipment, ask your supervisor for help before beginning the assignment. Commentary: Many of our employees feel strong in preserving the current policy for they view it as a negotiated benefit. Many companies offer employee discounts to their employees. Specialized hand tools or equipment is often made available to employees as long as they are trained to use it safely and are responsible to repair or replace. On the other hand, being a governmental entity is different than private enterprise. Question of Business Conduct Current Policy: None Great River Energy's Policy Modified to Elk River Municipal Utilities Application: In accepting employment with the Elk River Municipal Utilities, employees become representatives of Elk River Municipal Utilities and are responsible for assisting and serving the customers for whom they work. An employee's primary responsibility is to serve the customers of Elk River Municipal Utilities. The values of Elk River Municipal Utilities -ethics, open and honest communication, maintaining a positive workplace for employees, and serving customers -must guide our daily business activities. We strive for and take individual responsibility for ethical behavior -not only because it is the right thing to do, but also because it is fundamental value in public services. We expect every employee to practice ethical behavior in all dealings and relationships with customers, suppliers, community members, and co-workers. In addition, courtesy and professionalism are expected from everyone at Elk River Municipal Utilities. Unacceptable conduct consists of any action or omission that, in the business judgment of Elk River Municipal Utilities, significantly departs from expected standards of behavior affecting the workplace. Some examples of unacceptable conduct include but are not limited to: 1. Unauthorized possession of company property. 2. Falsifying timekeeping records or any other company records. 3. Violating the company's work rules regarding alcohol and illegal drugs. 4. Fighting or threatening violence in the workplace. 5. Negligence or improper conduct leading to damage of employer-owned or customer- owned property. 6. Insubordination or other disrespectful conduct, including failing to respond to warnings or directives to improve conduct or performance. 7. Violation of safety or health rules. 8. Sexual or other unlawful or unwelcome harassment. 9. Unauthorized possession of firearms or any object that could be considered a dangerous weapon. 10. Excessive absenteeism or any absence without reasonable notice. 11. Unauthorized disclosure of business secrets or confidential information. 12. Misuse of company resources. 13. Any other behavior constituting unacceptable conduct. All employees have a personal responsibility to report any behaviors or practices that may risk our future success. If you have any concerns or questions, discuss them with your supervisor or any member of management. These concerns will be treated confidentially (to the extent possible) and with high priority. Violation of this policy may be grounds for discipline, up to and including termination. City of Elk Rivers' Policy which is addressed in a couple of areas of their manual but can be summarized as follows with the wording changed to reflect Elk River Municipal Utilities application. In accepting employment with the Elk River Municipal Utilities, employees become representatives of Elk River Municipal Utilities and are responsible for assisting and serving the citizens for whom they work. An employee's primary responsibility is to serve the customers of Elk River Municipal Utilities. Employees should exhibit conduct that is ethical, professional, responsive, and of standards becoming of an Elk River Municipal Utilities employee. To achieve this goal, employees must adhere to established policies, rules, and procedures and follow the instructions of their supervisors. The following are job requirements for every position of the Elk River Municipal Utilities. All employees are expected to: • Perform assigned duties to the best of their abilities at all times. • Render prompt and courteous service to the public at all times. • Read, understand, and comply with the rules and regulations as set forth in these Personnel Policies as well as those of their departments. • Conduct themselves with decorum toward both customers and staff and respond to inquiries and information requests with patience and courtesy. • Report any and all unsafe conditions to the immediate supervisor. • Maintain good attendance. • Employees shall not use their official position for personal gain, engage in any business or transaction or have a financial interest, direct or indirect, which is in conflict with the proper performance of their official duties. • Employees shall not accept, either directly or indirectly, any money, property, gift, gratuity, reward, loan, fee, discount, or special consideration or special accommodation arising from or offered because of their employment or any activity connected with their employment with the Elk River Municipal Utilities. • No employee shall, in any manner or form, endorse, recommend, or advertise a product or service by using the Elk River Municipal Utilities name or the employee's name and/or title. • Thus, Elk River Municipal Utilities officials and employees must scrupulously avoid any activities that suggest a conflict of interest between their private interests and Elk River Municipal Utilities responsibilities. • Follow Elk River Municipal Utilities harassment policy. • Follow Elk River Municipal Utilities drug and alcohol policy. • Avoid violence or the threat of violence against another person. • Avoid possession, use or threat of use of an object that could be considered a dangerous weapon.