5.1. ERMUSR 11-16-2010 - Laserfiche WebLink

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/i Elk River --~ Municipal Utilities 7 3069 Orono Parkway • P.O. Box 430 Blk Rivex, MN 55330-0430 UTILITIES COMMISSION MEETING Phone: 763.441.2020 Pax: 763.441.8099 TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. - Director of Operations John Dietz, Chair Jerry Gumphrey, Vice Chair Dar 1 Thom son, Trustee MEETING DATE: AGENDA ITEM NUMBER: November 16, 20]0 5.1 SUBJECT: 2011 Wage Proposal BACKGROUND: The process for annual wage increase proposals is handled over two separate commission meetings. During the first meeting, management provides industry comparisons, economic trends, and financial impact to the Utilities. Included is a metro average survey of seven predetermined peer utilities. Also, the Consumer Price Index (CPI) is provided. At the request of the commission, additional information maybe provided for the second meeting. The employees are provided the opportunity to bring suggestions and requests to management. This information will be reviewed and considered by management and then may be included in the presentation to the commission. At the discretion of the commission, employees will be afforded the opportunity to address the commission during this first meeting. These statements from employees may be taken into consideration by the commission during their decision making process. After the commission has collected the information needed for their decision, the topic will be tabled until the following utility commission meeting at which the commission will make their decision. DISCUSSION: For the past 2 decades, ERMU has used a survey of neighboring utilities to gauge the industry for purposes of compensation comparison. For ease of comparing, the lineperson position has typically been used as the benchmark because job duties and position requirements are very consistent from one utility to another. The utilities used in this survey had been agreed upon because of their proximity to ERMU. Also, these are the utilities which ERMU is in direct labor competition with. This process of using the average benchmarked wages from the identified utilities also provides some mitigation to market labor cost volatility. This metro average wage had been used to determine ERMU wages until 2009. Because of the economic downturn and because of public perception, in 2009 the Utilities had a 0% wage increase. In 2010, the Utilities again chose to not award the 2.73% metro average because of the economy and awarded a 1.5% increase. This has set the Utilities behind in competitive wages. The metro average survey is a i