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5.2 Wage & Benefits Committee Update At the November 13 Commission meeting,the Commission directed the Wage & Benefits Committee (W&BC)to benchmark the management pay group and report back to the Commission at the December meeting. The W&BC met just prior to the Commission meeting to review the benchmarking data. Mr. Adams shared that after review of the data,the W&BC is recommending contracting with a third party to do a pay plan evaluation with a concentration on the management pay group. Chair Dietz elaborated on the benefits of hiring a third party to evaluate these positions; preferably somebody that is familiar with the utility industry. He recommended that staff bring back three to four proposals for consideration at the January Commission meeting. Moved by Commissioner Nadeau and seconded by Commissioner Stewart directing staff to solicit proposals for a pay plan evaluation. Motion carried 5-0. 5.3 2019 Annual Business Plan In November, the preliminary 2019 Annual Business Plan was presented to the Commission. Mr. Adams shared that there have been several changes due to the finalizing of projects and expenses, and the most significant change is due to the implementation of electric rate reductions at the direction of the Commission. As outlined in his memo, Mr. Adams presented the proposed electric rates and explained that the reset of rates will affect consumers differently depending on usage. He shared that a typical residential customer should experience an approximate 5%reduction in electric costs, and commercial customers should experience between a 4%to 5%reduction. Mr. Adams noted that staff is also proposing the implementation of a Large Demand Electric Service Rate which is reflected in the budget. Mr. Adams presented the proposed residential water rates which reflected a projected 1.72% annual water cost increase for a typical residential customer; this is equivalent to less than a $5.00 increase for the year. Commercial customers will experience a blended rate increase of 2% or less depending on usage. Commissioner Stewart had a question on power cost adjustment credits (PCAs) and wanted to know if we have given them back or if they were still on the books. Staff responded that with the change in whole power providers, the intent was to pass along the accumulated PCA credits in their entirety to our customers in 2018. Commissioner Stewart expressed her concerns about doing a 5%rate reduction and asked if staff had done a multi-year rate projection. Mr. Adams responded. Commissioner Stewart also had some questions and concerns about the HWY 169 project and how that may affect future rates. There was discussion on the infrastructure in that area, and the impact of it not being fully depreciated. Commissioner Westgaard stated that it may be Page 4 Regular Meeting of the Elk River Municipal Utilities Commission December 11,2018