5.5. ERMUSR 04-14-2009~i
Elk River -^~
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
Apri16, 2009
To: Elk River Municipal Utilities Commission
John Dietz
Jerry Gumphrey
Daryl Thompson
From: Troy Adams
Subj: Company Vehicle Take-Home Practice
55
Phone: 763.441.2020
Fax: 763.441.8099
Currently Elk River Municipal Utilities has a number of company vehicles that are taken home
by the employees. Per commissioner request, the following information is submitted for
commission review on the details and justification for the current practice.
In general, the reason for all of these take-home vehicles is that they are part of the Utilities' on-
call emergency preparedness to protect the safety of the public and quick restoration to disrupted
utilities. There are six vehicles that have previously been approved to be taken home by staff.
These vehicles are for the General Manager (now the Director of Operations), Water
Superintendent, Electric Superintendent, Security Technician, an Electric Department On-Call
employee, and a Water Department On-Call employee. There is one additional employee whose
situation warrants consideration for taking a company vehicle home; this is for the newly created
position of Supervisor of Technical Services.
The Security Technician is on-ca1124/7. Over the past two years, there have been about 80 after-
hours calls taken. In that same time period the Security Technician has needed to respond for an
emergency repair about 5 times. This ability to take care of customer emergencies is part of
providing excellent customer service.
The electric and water departments both have employees in on-call weekly rotations. These two
employees are first to respond to an emergency or outage call. Over the previous two years, the
electric on-call vehicle has been deployed approximately 198 times and the water on-call
approximately 155 times. These employees are required to carry an on-call phone/pager and
remain in town during their week of on-call and are compe-nsated for this responsibility (engaged
to wait).
Over the past two years, the Electric Superintendent had been called out approximately 10 times
and the Water Superintendent had also been called out approximately 10 times. The number of
times the General Manager had been called out over the last two years is undocumented.
However, by staff account the number would have been about half that of the Electric or Water
Superintendents. These management positions are not required to carry an on-call phone/pager
or remain in town 24/7 and salaried (waiting to engage). Many times these managers are called
when they are out of town or unavailable to respond.
Therefore there is some redundancy with the General Manager and the Superintendents. This
redundancy is even more critical because the Utilities are in a state of transition with the
restructuring implemented this month. For this reason, the new position of Supervisor of
Technical Services should be considered for inclusion in the take-home vehicle pool.
The estimated cost of $6,000 associated with these vehicles being driven home are broken down
in the attached spreadsheet. This makes up 0.0002% of the Utilities' 2009 budget that runs in
excess of $26,900,000.
The interpretation of relevant IRS documentation by staff had been that the benefit these
employees receive by driving a company vehicle home is not a taxable benefit as long as the use
is required to facilitate company work like emergency response. In other words, the benefit is
non-taxable as long as the vehicle is being driven home for the purpose of being available for use
in the event of an emergency. If the employee were to be using the vehicle for personal use as
well, this portion of use would be taxable. Staff is currently working to get confirmation on this
interpretation through the League of Minnesota Cities. An update of the status of this research
process will be provided at the Commission meeting.
The value to the company for this cost cannot be determined by the frequency of call outs. In
fact, the frequency of call outs is a somewhat irrelevant number. Ideally, the company would
have zero call outs. In the utility industry, employees are trained for emergency preparedness
and paid to be on-call. While it would be preferred that these employees would never have to be
deployed, there are a number of reasons that an employee may be called out, including car
accidents, equipment failures, water main breaks, storms, etc... By having the company vehicle
at home, these employees are able to respond directly to the scene, assess the situation, secure
the scene to protect the public, and deploy additional resources as needed. The goal is to protect
the public and restore utilities as quickly as possible.
To illustrate this point, consider the following. Shaving life saving minutes off the response time
by responding directly to the scene of an accident may make all the difference in the world in a
situation similar to a recent auto accident in Elk River. In this recent accident, a vehicle ran into
a 3-phase electrical distribution pole. The 3-phase feeder had fallen on top of the vehicle.
Responding directly to the scene may give the added time to secure the area and prevent a
fatality. Or consider an ice storm resulting in multiple overhead lines down. By having the
Electric Superintendent, Director of Operations, and potentially the Superintendent of Technical
Services respond directly to multiple locations, restoration to the power may be expedited
through simultaneous assessment and resource coordination, all while protecting the public.
There would be switching orders to write, Utility labor resources to coordinate, not to mention
coordination with government agencies and other utilities affected.
The value to the Utilities in the $6,000 is found in the intangibles, the Utilities' added ability to
better service their customers through emergency preparedness and quick response time.
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On -Call (Called out days) 2007
Days Days
Date Name Dept Called out Date Name Dept Called out
1/1/2007 Chad G Elect 3 1/1/2007 Dick W Water 2
1/6/2007 Shane D Elect 0 1/4/2007 Rich C Water 1
1/31/2007 Wade L Elect 0 1/20/2007 Steve Z Water 0
2/7/2007 Wade L Elect 0 1/25/2007 Rich C Water 1
1/13/2007 Lloyd L Elect 1 1/15/2007 Pete N Water 2
1/16/2007 Mark F Elect 2 2/4/2007 Dick W Water 2
2/19/2007 Scott T Elect 1 2/14/2007 Steve Z Water 4
2/14/2007 Art G Elect 0 2/9/2007 Pete N Water 1
3/1/2007 Troy 5 Elect 2 2/28/2007 Dick W Water 1
2/23/2007 Tom G Elect 3 2/22/2007 Rich C Water 1
3/13/2007 Chris S Elect 2 3/14/2007 Steve Z Water 1
3/16/2007 Jeff H Elect 2 3/10/2007 Pete N Water 0
3/25/2007 Chad G Elect 2 2/28/2007 Rich C Water 1
3/31/2007 Shane D Elect 1 3/4/2007 Rich C Water 1
3/11/2007 Lloyd L Elect 0 4/18/2007 Steve Z Water 1
3/13/2007 Mark F Elect 1 4/12/2007 Pete N Water 0
5/9/2007 Scott T Elect 2 4/19/2007 Steve Z Water 1
5/9/2007 Art G Elect 4 5/1/2007 Rich C Water 2
5/23/2007 Chad G Elect 1 5/16/2007 Steve Z Water 0
5/17/2007 Tom G Elect 3 5/7/2007 Pete N Water 2
6/2/2007 Chris S Elect 2 5/18/2007 Dick W Water 2
6/7/2007 Jeff H Elect 2 5/18/2007 Rich C Water 1
6/16/2007 Troy S Elect 3 6/1/2007 Pete N Water 2
6/21/2007 Shane D Elect 3 6/7/2007 Rich C Water 0
6/30/2007 Lloyd L Elect 1 6/21/2007 Steve Z Water 2
7/4/2007 Mark F Elect 4 6/19/2007 Dick W Water 1
7/19/Z007 Scott T Elect 2 7/9/2007 Steve Z Water 2
7/12/2007 Mike T Elect 4 7/10/2007 Pete N Water 3
8/6/2007 Wade L Elect 2 7/16/2007 Dick W Water 1
7/31/2007 Art G Elect 4 7/20/2007 Rich C Water 1
8/15/2007 Troy S Elect 3 8/3/2007 Steve Z Water 3
8/11/2007 Tom G Elect 3 7/31/2007 Pete N Water 3
8/25/2007 Chris S Elect 2 8/13/2007 Dick W Water 6
9/3/2007 Jeff H Elect 1 8/19/2007 Rich C Water 2
9/16/2007 Chad G Elect 3 8/29/2007 Steve Z Water 2
9/8/2007 Shane D Elect 4 8/23/2007 Pete N Water 0
9/24/2007 Tom G Elect 1 9/10/2007 Dick W Water 5
9/27/2007 Mark F Elect 2 9/16/2007 Rich C Water 2
10/4/2007 Mike T Elect 2 9/22/2007 Pete N Water 2
10/11/2007 Wade L Eled 0 9/27/2007 Rich C Water 0
10/18/2007 Scott T Elect 0 10/4/2007 Dick W Water 4
10/18/2007 Art G Elect 2 10/11/2007 Rich C Water 0
11/9/2007 Troy S Elect 2 10/18/2007 Pete N Water 1
11/5/2007 Lloyd L Elect 2 10/28/2007 Rich C Water 1
11/21/2007 Chris S Elect 0 11/7/2007 Dick W Water 4
11/16/2007 Jeff H Elect 2 11/5/2007 Rich C Water 0
12/3/2007 Chad G Elect 1 11/22/2007 Steve Z Water 2
12/16/2007 Lloyd L Elect 3 11/15/2007 Pete N Water 0
12/19/2007 Mark F Elect 4 11/29/2007 Dick W Water 4
12/7/2007 Shane D Elect 0 12/6/2007 Rich C Water 4
4/24/2007 Mike T Elect 1 12/14/2007 Pete N Water 1
4/27/2007 Wade L Elect 2 12/20/2007 Rich C Water 2
ELECTRIC TOTAL 97 WATER TOTAL 87
2007 GRAND TOTAL 184
On -Call (Called out days) 2008
Days Days
Date Name Dept Called out Date Name Dept Called out
1/1/2008 Scott T Elect 1 1/3/2008 Dick W Water 1
1/9/2008 Wade L Elect 0 1/5/2008 Rick C Water 2.
1/19/2008 Mike T Elect 1 1/18/2008 Steve Z Water 2
1/16/2008 Art G Elect 0 1/12/2008 Pete N Water 1
1/31/2008 Troy S Elect 2 2/1/2008 Dick W Water 0
1/30/2008 Tom G Elect 0 1/29/2008 Angela H Water 1
2/9/2008 Chris S Elect 1 2/13/2008 Pete N Water 2
2/17/2008 Jeff H Elect 1 2/9/2008 Rick C Water 2
3/2/2008 Chad G Elect 4 2/29/2008 Steve Z Water 1
2/23/2008 Shane D Elect 1 2/21/2008 Angela H Water 3
3/15/2008 Lloyd L Elect 2 3/6/2008 Dick W Water 2
3/12/2008 Mark F Elect 0 3/19/2008 Rick C Water 0
3/26/2008 Mike T Elect 3 3/26/2008 Steve Z Water 0
4/2/2008 Wade L Elect 2 3/20/2008 Pete N Water 0
4/10/2008 Scott T Elect 4 4/3/2008 Angela H Water 2
4/9/2008 Art G Elect 1 4/10/2008 Rich C Water 1
4/25/2008 Chris S Elect 3 4/23/2008 Dick W Water 0
4/22/2008 Tom G Elect 1 4/29/2008 Pete N Water 1
5/6/2008 Troy S Elect 5 5/1/2008 Angela H Water 0
5/8/2008 Jeff H Elect 4 5/7/2008 Rich C Water 0
5/15/2008 Chad G Elect 3 5/16/2008 Dick W Water S
5/25/2008 Shane D Elect 3 5/22/2008 Rich C Water 4
6/4/2008 Lloyd L Elect 3 6/4/2008 Steve Z Water 0
6/4/2008 Lex A Elect 3 6/2/2008 Pete N Water 1
6/19/2008 Mike T Elect 3 6/22/2008 Dick W Water 2
6/12/2008 Mark F Elect 1 6/12/2008 Angela H Water 1
6/28/2008 Wade L Elect 2 7/5/2008 Pete N Water 1
7/3/2008 Art G Elect 3 6/26/2008 Rich C Water 2
7/11/2008 Scott T Elect 3 7/10/2008 Steve Z Water 3
7/19/2008 Tom G Elect 3 7/18/2008 Dick W Water 2
7/30/2008 Chris S Elect 4 7/26/2008 Angela Water 1
7/24/2008 Troy S Elect 1 7/30/2008 Rich C Water 2
8/7/2008 Jeff H Elect 3 8/16/2008 Steve Z Water 2
8/18/2008 Chad G Elect 2 8/8/2008 Pete N Water 0
8/27/2008 Wade L Elect 2 8/29/2008 Dick W Water 4
8/22/2008 Shane D Elect 2 8/21/2008 Angela H Water 2
9/5/2008 Lloyd L Elect 3 9/13/2008 Pete N Water 2
9/13/2008 Mark F Elect 1 9/5/2008 Rich C Water 0
9/18/2008 Mike T Elect 3 9/20/2008 Steve Z Water 2
9/30/2008 Lex A Elect 1 9/26/2008 Pete N Water 0
10/9/2008 Chad G Elect 3 10/2/2008 Dick W Water 3
10/4/2008 Art G Elect 1 10/8/2008 Rich C Water 0
10/27/2008 Chris S Elect 1 10/16/2008 Steve Z Water 2
10/18/2008 Wade L Elect 1 10/22/2008 Angela H Water 0
11/5/2008 Troy S Elect 2 11/8/2008 Dick W Water 1
11/10/2008 Jeff H Elect 2 11/3/2008 Angela H Water 2
11/19/2008 Tom G Elect 0 11/22/2008 Pete N Water 2
11/19/2008 Shane D Elect 1 11/22/2008 ??????? Water 0
12/6/2008 Lloyd L Elect 2 11/27/2008 Steve Z Water 0
11/27/2008 Lex A Elect 1 12/3/2008 Angela H Water 0
12/19/2008 Mike T Elect 1 12/13/2008 Dick W Water 1
12/13/2008 Lex A Elect 1 12/19/2008 ??????? Water 0
ELECTRIC TOTAL 101 WATER TOTAL 68
2008 GRAND TOTAL 169
~~.~ s.~
ERMU Com an Picku s Driven Home at i h ~~~ ~~~-
p y p Ng t
~}-1 ~l -c~~ Ohl--~
(Assumptions: 48 weeks worked per year; $.40 per mile cost) M~
S
Troy Adams
Daily trip 34.24 miles
$3,287.04
Mark Fuchs
Daily trip 4.12 miles
$395.52
Wade Lovelette
Daily trip 7.04 miles
$675.84
Dave Berg
Daily trip 14.70 miles
$1,411.20
Rick Schaust
Daily trip 44.32 miles
$4,254.72
Total yearly cost to ERMU $10,043.32
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