5.3. ERMUSR 07-17-2012 - Laserfiche WebLink

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• New Commissioner orientation and information packets including the fiduciary responsibilities and existing policies. • Requirement for Commissioners to attend annual industry training, seminars, or conferences. • Commissioner job descriptions outlining responsibilities and expectations. • Policy defining scope of work and relationship with management. • Annual Commission effectiveness evaluations and/or reviews. Financial Oversight and Budgeting—The complexity to public utilities' finances are increasing with the changes in the world we live in. The shift to a global economy,the changes in power generation and transmission markets,the increase in Federal and State regulations and unfunded mandates,the responsibilities to our local government, the perception of our community; these are all important dimensions that need balance for a utility to have long term financial strength. Public power has an added dimension the balance between being built like a business and being run by government. If any of these components are weighted too heavily, a utility can suffer over the long term. There is public pressure to minimize rates yet maintain a fiscally healthy utility while providing safe and reliable utility services. The following are some topics for consideration and discussion: • Set multiple key annual financial targets including debt coverage ratio, cash reserves policies minimum and maximum, target operating income, and age of assets calculation. • Budgeting practices and schedule. • Rate design criteria and goals including consideration for cost of service and rate of return. Employee Recruitment, Retention, and Development—Workforce development is one of the four categories used in the APPA RP3 evaluation. Although ERMU has been recognized nationally as one of the very few with the RP3 designation, we scored lower in the workforce development section. In the short term, ERMU is still able to meet the operational goals. But in the long term, ERMU is in a compromised position if we are not able to develop and retain employees. All positions are important, but the discussions at the conference really focused on the exposure that public utilities have with losing upper management and critical skill positions. The following are some topics for consideration and discussion: • Develop policies for employee development and training. • Establish succession planning for critical positions. • Develop policies on long term compensation positioning in industry market. • Develop a practice or procedure for recruitment. ACTION REQUESTED: Staff requests Commission direction on these five topics to develop policies or procedures for future Commission consideration. l� P0 / EREO 01 R fr3 Page 3 of 3 NATURE Reliable Public P o w c a r n T o S r a v r Power Provider