2.2 EMRUSR 07-09-2024 - Laserfiche WebLink

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Ms. Towne then presented a proposed pay plan that would place ERMU at the market midpoint (average). The pay plan includes the following characteristics which will result in compensation uniformity and fairness: • A nine step plan, up from the current five step plan • 20 position grade assignments, which include all ERMU positions • Plans are aligned to 100% market at midpoint (step 4), this will bring compensation up from the current status of below market value to market midpoint (average) • Provide consistent and predictable percentages between steps Commissioner Bell expressed concern about how the pay plan would be implemented. Mr. Hanson asked that commissioners focus on the pay plan itself and after approving an appropriate plan let management work with Baker Tilly on the implementation details as it is a very complex process. Commissioner Bell noted that the slide related to position grade assignments was missing a grade three. Ms. Towne explained that grade three is not actually missing but rather ERMU does not have a current position ranked at that grade. She also stated that having open grades allows for growth and development as current positions evolve or new positions are added. Chair Dietz asked if cost -of -living adjustments will be added to the dollar amount of each step year after year. Ms. Towne confirmed that it is common practice with organizations to adjust their pay structure each year to keep pace with market averages. Commissioner Stewart asked Ms. Towne to give insight on trends based on her extensive experience with other companies and the Minnesota market. Ms. Towne replied that many organizations are keeping step plans and there is no movement to an open range structure. She continued that both employees and administration tend to like the step plan structure, explaining that they are easy to budget for and understand year over year. Ms. Towne also noted that most organizations in ERMU's market space have between seven and nine steps and that is what is currently trending right now. Mr. Hanson clarified that he asked for nine steps in the proposed plans for two reasons. One was that it would be cost effective to transition to a new pay structure while staying market competitive with nine steps. The other was to foster employee longevity by offering more consistent and desirable wage increases with each step along with cost -of -living adjustments. Commissioner Bell expressed concern for how an approved plan would be funded. Mr. Hanson clarified that the cost of adopting, for example, the proposed plan 1b with an implementation date of August 1, 2024, would be covered by the amount requested by the Commission to be included in the 2024 budget for the compensation study. After additional discussion of the information presented, Ms. Towne presented Baker Tilly's recommendations. Elk River Municipal Utilities Commission Meeting Minutes June 4, 2024 Page 4 34