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6.5. ERMUSR 03-10-2009~j Elk River -~= Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 March 4, 2009 To: Elk River Municipal Utilities Commission John Dietz Jerry Gumphrey Daryl Thompson From: Vance Zehringer Subject: Proposed Work Hour Reduction Study Phone: 763.441.2020 Fax: 763.441.8099 At the February 24th Utilities Commission meeting under Other Business, the Commission directed staff to prepare a work hour reduction study. The request was to research the impact of implementing a 36 hour work week for all employees. This reduction is a 10% reduction in work hours resulting in an approximate 10% reduction in employee wages. The question is would this be in the best interest of the Utilities. From a financial perspective, this proposed reduction in hours is not warranted. The number of customers is up, revenue is up, and the 2009 budget was based on 0% growth. In the previous six months, the Utilities have reduced the number of employees by two. The utilities promoted from within in lieu of hiring from the outside. The promotions from within have resulted in depleting the line crews by two. Even with the promotions and pending changes in salaries, this reduction in staff has resulted in savings of approximately $100,000. There are approximately 1800 summer help hours budgeted for 2009. Prior to reducing full time employee hours, these summer help hours should be cut. Many outsourced jobs have, recently been brought back in- house including: tree trimming, system preventive maintenance, bill processing, system mapping, anda portion of underground electrical distribution installation. There are some big ticket items still being outsourced. A study of bringing this workload back in-house should be considered before reducing full time employee hours. As publicly noted by Commissioner Dietz, this past year has been tumultuous for Llk River Municipal Utilities. Employee morale is at an all-time low and center around a lack of trust in the fellow employees, management, and the commission. Great effort has been made to unite the staff and move forward. The Utilities are headed in the right direction, but it will be a slow process. To reduce the employee's wages by approximately 10% would be detrimental to the efforts made in healing moral. The timing couldn't be worse. The Utilities may even lose employees as jobs become available elsewhere. To hire new always costs more than to retain. The retention of talent is a key factor in a company's success. Work Hour Reduction Study March 4, 2009 Page 2 The question remains, what is in the best interest of our customers? Does the perception created by cutting hours outweigh the negative impact it will have on customer service, safety, and reliability? I think not! We need to continue to be the best that we can be. To do so, we need all hands on deck. I cannot justify recommending a cut of any magnitude. While we would like to do our part, I believe we have already done so by cutting two positions -we've just not told anybody about it! There is a general consensus among department heads that there is already more work scheduled than labor hours available to complete the important tasks ahead of us. In support of this consensus, please find for your review, summaries from each of them outlining the impact a reduction in work hours will have on our ability to continue to excel. 36 hour workweek impact on Administration -March 2009 Over the past years we have added staff to take care of the customer base as it has grown. The staff we have are matched to take care of the customers we have. There has not been a reduction in the number of customers we are serving, nor the work related to those customers. If anything, we have seen an increase in the workload as we deal. with changing property owners related to foreclosures, and increased collections responsibilities as there are more customers making payment arrangements and needing additional assistance. There are approximately 10,000 bills that are sent out every month and each of those bills has services related to that bill. There are customer calls that come in, but there are also meters to be read, payments to process, collections to be made, move ins and move outs to process, as well as creating and mailing the bills. This all takes time and many of these tasks are very time critical in nature. If the staff is reduced in any capacity, the customer service will be compromised. One very big concern with a reduced work week is what hours we would have to close the offices and not be available to the public. It would be impractical to try and remain open forty hours for the public when the staff can only work 36. Staggering the work start and end times for staff will not work because the busiest customer activity on any given day is at the beginning and end of the day. We need to have as many staff as possible available at these times and we would be shorthanded if we had to stagger hours. In talking with staff at the office and trying to identify what would be able to change to accomplish the same amount of work in less time, we are ultimately going to have to work at a frantic pace on some things and that could lead to errors and inaccuracies. As issues come up with customers, there is usually some amount of "research" to be done -looking at and analyzing history, verifying meter numbers and setup, etc. These are the issues that would be compromised the most as staff would not have the time to fully research items and it would take much longer to get back to a customer that required any amount of research. Other items identified that would suffer would be timely deposit returns, collection efforts, website management and updates, review of customer budget accounts, and purchasing quotes for the best prices. Simply answering the phones and taking care of the walk in customers will prove challenging. There are times when all five front people are answering phones and assisting walk in customers and calls ring back to three other desks and those staff are needed to provide customer service. As everyone is busy trying to manage their workload, calls could continue to cycle through the office for several minutes before they are handled, which leads to very unhappy customers. The majority of customers won't associate a reduction in customer service with the utilities as the utilities "doing their part" in a struggling economy. They would like to see a reduction in their bill, but not in their service. Water Department's Reasons For Not Reducing Hours Last year the Water Department hired two summer help employees that cost roughly $10,000.00. This year there will be no summer help hired. Their primary responsibilities were flushing hydrants, working on valve boxes and valve maintenance. We have over one thousand of these valves on our water system. It has been our goal to maintain valves on a rotating schedule of approximately 300 per year. We also spent about $6000.00 on lawn mowing last year. I have permission from Gary Leirmoe from our Waste Water Department to use their mower for $1,500.00 to $2000.00. This would be a savings of from $4,500.00 to $5,000.00. Some job projections for this year are: We need to install a fence in front of the Foster Tower. The traffic around this tower has increased and it would be in our best interest to protect the area. The side of Well #3 is in need of a new paint job. The well house at the Jackson Street Well should be torn down. Our wellhead protection program has been neglected for about 6 to 7 years and the State of Minnesota is becoming more concerned with this agenda. We need to start the process of being sure our wellhead protection program is in full effect. This is something we should have been in compliance with all along. Here are some thins that need to be done: There are approximately twenty private wells that need to be checked and recorded because they are in the same aquifer as us, (Mt. Simon-Hinckley). There are also many private wells surrounding our wells that need to be monitored and verified that they have no standing water, they have correct slopes or abandonment procedures have been fully conducted. I am working closely with Roger from the DNR on this issue. Roger is also working on a program for our Water Department that must be implemented for us to be in compliance with these issues. Currently, I am working with Bruce Olson at the DNR on obtaining grant money for projects which will also include clean-up, well sealing, well abandonment and other compliance issues. Because of the time consuming nature of this work, I foresee these projects as being full time employment for at least one employee. Impact of Reduced Hours on Electric Department -March 2009 I would like to share with you several reasons of why we should stay at a 40 hour work week during this slow new construction time: During the winter months we tree trim out approximately 90 miles of overhead utility lines. We schedule to trim trees once every four years leaving us at about 20 miles per year. This work was previously contracted out by the utility but has been done in-house for the past two years. In 2008, Sherburne, Wright and Hennepin counties have adopted the State's traffic control rules. This means when our truck's stiff legs cross the white line we have to use flaggers which takes an additional two employees. We are required to do this every time we work on a county road right-of--way. Along with this, we need to fill out a permit in the County we are working in or the State when working on the highway right-of--way. We have also started doing our own infrared testing instead of contracting out to USG as in previous years. We try to test 20-25% of our 3-phase overhead and our 3-phase underground customers every year along with the substations. This process is a very good way to find problems before they get to the customers. We are also working on our fuse coordination and while doing this changing out our cutouts. We have had problems with the cutouts cracking and then either falling apart or starting the pole on fire. With this fuse coordination study, we have found that we have to change out approximately 54 of our fuse pads; this change out has not even begun. There are many other jobs we would like to finish before frost out that include: * switching out west bank 2 to fix the bypass fuse alignment *repair three different cap banks *change out three phase transformers at Barton's pit, Orono Commons and UHG *new 3 phase service for Aggregate Industries, they will be digging in the frost so their electricians and our crew can get started on March 4th There are many other small jobs we have to schedule in along with jobs that come in daily. Once the frost is out we have jobs to finish from last fall as well as temporary jobs on the ground from this winter. Not to mention a list of projects already in the works for this summer. Due to restructuring we have not hired additional staff leaving us two fewer linepersons than last year. There are people moving to different positions in the company that will need training and this will also take time. The linepersons also need time to train being we have lost two senior linepersons in the last six months. Impact of Reduced Hours March 4, 2009 Page 2 I feel there is more than enough workload for the current electric crew. SAFETY IS THE TOP PRIORITY of the company and its employees. We have a very good and reliable electrical system and very good people working here that offer excellent customer relations. Because of this we have been able to attract some very nice customers to Elk River. Please allow us to catch up on these jobs and projects by not cutting hours. Utility Commission Proposed Labor Reduction Study -March 2009 Impact on the Engineering Department of a 36 hour workweek Locating -Looking at 2008 and 2007 locate numbers, the months of April, May, June, and July make up for respectively 58% and 53% of the annual locate total. This does not give con- sideration to the extensive time that road projects add to the locating workload. Spring and early summer are the busiest time of the year for locating. For 2008 and 2007, the daily average during these busy months was approximately 25 per day. A locate ticket can take 30-60minutes or more. The same time is often needed to locate for installation of a realtor sign as that of a new utility service. By law, these locates need to be done within a set window of time. A reduction in hours may not always be possible because of the ticket load. In the times of the year when there are fewer locate tickets, the locators assist other departments. They assist with mapping, meter change out, tree trimming, and system analysis with the new thermal imaging camera. Mapping -System mapping is an important tool used to protect our facilities as well as assist in safe system maintenance. The workload is partially driven by new water and electric construction. The workload is also driven by all the projects the linepersons do day in and day out. Since taking the mapping back in-house, there has been a continuous process to increase the accuracy and readability standards making the mapping a more valuable tool. There are many mapping improvements in the queue to be implemented. Along with maintaining the mapping, cataloging as-builds and digitizing water tie cards requires ongoing attention. Updating the electrical specification book and assisting MMUA by updating their specification book are other current projects. A reduction in hours would impact maintenance and improvement progress on system mapping for water and electric. Metering -Many of the ongoing workload can not be cut regardless of hours worked including: weekly/monthly substation checks, substation maintenance, assistance with monthly generation and annual urge testing, assistance with generation facility maintenance, metering equipment installation, load control installation, assistance in system maintenance. Areas directly impacted by a reduction in hours would fall under customer service and would include: addressing off- peak issues, addressing billing/metering issues, addressing power quality issues, and implementing meter change out. Security -This department is unique because it's essentially a one man show. A reduction in hours would result in a proportional reduction in system sales and installation. This would in turn result in a proportional reduction in new monthly monitoring fee revenue. This would also impact the departments ability to provide maintenance and customer service. Currently this department's growth is limited by labor. Reducing labor would reduce growth. Labor Reduction. Study -Impact on Engineering Dept. March 4, 2009 Page 2 General Comments -For this department, as well as the rest of the Utilities, the busiest time of the year is approaching. A reduction in hours would push back maintenance compromising safety. A reduction in hours would limit the department's ability to provide the level of customer service which has previously been given. After many years of 10% system growth, this department and the Utilities are is a state of maintenance catch-up. Many projects directly affecting system reliability and safety still are in the process of implementation, for example the fuse coordination study recently completed. With the promotion of a new department supervisor, additional time will be needed for transition. The financial and public perception gain of reducing hours does not off set the reduction in customer service, safety, and system reliability.