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requiring a rate increase specifically due to this matter. This is also due to spreading costs <br />over multiple years and a partial first year of implementation. <br />Mr. Hanson explained that staff is looking for Commission approval on one of the <br />payment plans, an implementation scenario, and the effective date. <br />Chair Dietz distributed and presented his proposal titled New ERMU Compensation Plan <br />712124, which was added to the packet after the meeting. There was discussion. <br />Regarding Chair Dietz's proposal there was concern that limiting performance <br />compensation to employees who had been in their last step for one calendar year would <br />affect benefits for newer employees and impact the environment of shared goals across <br />all staff that the program is intended to create. Commissioners also felt employing the <br />half step increases could confuse the issue and would create an eighth step when the <br />Commission requested a seven -step plan at the June meeting. <br />Mr. Hanson shared that under Chair Dietz's proposed plan some employees will have a <br />pay decrease in total compensation, in particular for those who have a smaller pay <br />increase due to their role being appropriately compensated currently. <br />Commissioner Westgaard shared his perspective that the pay plan selected should be <br />market leading and that the current step implementation made the most sense to him. He <br />added his stance that benefits such as the UPMIC should be calculated in an employee's <br />total compensation. He continued by stating his expectation that any plan would take <br />effect on approval without necessarily including back payment. <br />Commissioner Stewart shared her prepared comments stating that she was neutral to the <br />number of steps the plan consisted of, having gone from nine the previous month to <br />seven. In focusing on the UPMIC and Longevity pay bonus programs, Commissioner <br />Stewart restated the fact that six of the ten comparable utilities have performance <br />compensation plans with two researching the option. She highlighted the fact that UPMIC <br />is not guaranteed and can be withheld if certain budget thresholds are not met. She <br />explained that in human resources this is commonly classified as "at risk" pay which <br />cannot be counted on as income. Commissioner Stewart shared her belief that it is <br />important to keep the UPMIC and Longevity Pay programs, adding her perspective that <br />removing them to allow pay increase is a "shell game." She stated that the Commission <br />chose to do the study because ERMU is behind in pay, and that money had been reserved <br />to implement the plan which has been developed for a year and through significant <br />investment to have it done professionally. She stated that the proposed pay plans do not <br />make ERMU the gold standard in pay but bring the Utilities up to a market average. <br />Commissioner Stewart stated that she agreed with the current step implementation <br />scenario. Commissioner Stewart stated her appreciation for Chair Dietz sharing his ideas <br />on compensation study but shared that she was in favor of focusing on the <br />recommendations from the consultant. <br />Elk River Municipal Utilities Commission Meeting Minutes <br />July 9, 2024 <br />Page 5 <br />