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Elk River t <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager <br /> John Dietz—Chair <br /> Daryl Thompson—Vice Chair <br /> Al Nadeau—Trustee <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> January 8, 2013 5.1 <br /> SUBJECT: <br /> Longevity Pay <br /> BACKGROUND: <br /> The Wage and Benefits Committee considered the idea of longevity pay. The Committee <br /> submitted this idea to the Commission for discussion at the December Utilities Commission <br /> meeting. The Commission directed staff to bring back a longevity pay plan for consideration as <br /> soon as possible. <br /> DISCUSSION: <br /> The lack of comparable information for consideration at the time this topic was discussed by the <br /> Commission did not allow for specific direction. Staff has used best judgment to prepare the <br /> proposed longevity pay benefit that is comparable to other Minnesota municipal utilities yet <br /> meets the specific needs of ERMU. <br /> Staff utilized Minnesota Municipal Utilities Association(MMUA) to conduct a survey of <br /> Minnesota municipal utilities on longevity pay for lineworkers and other employees. This <br /> survey information is available upon request. Of those responding to the survey, 24%offered <br /> longevity pay. With the exception of one, all of the utilities offering longevity pay extend the <br /> benefit to both lineworkers and non-lineworkers. There is also one utility that offers longevity <br /> pay to non-lineworkers, but not the lineworkers. <br /> Some of the utilities surveyed have their longevity pay calculated as a percentage basis and some <br /> have fix dollar amounts. Designing a longevity pay benefit calculated as a percentage allows the <br /> benefit to grow over time with the cost of living adjustments (COLA). By doing this, it is less <br /> likely the benefit would need to be revised in the future and would stand the test of time. <br /> After analyzing the data, 25% of those offering longevity pay begin the benefit at 5 years. The <br /> remaining utilities that provide this benefit start offering the longevity pay later than 5 years of <br /> service. Typically at 5 years of service a lineworker or water operator would have completed <br /> their apprentice program or passed an examination for Class B water operator certification. This <br /> Page 1 of 2 <br /> INATUR[1 <br /> Reliable Public <br /> Power Provider Powr,ro To SrPVr <br />