4.1. ERMUSR 02-12-2013 - Laserfiche WebLink

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II Elk River ; Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager John Dietz—Chair Daryl Thompson— Vice Chair Al Nadeau—Trustee MEETING DATE: AGENDA ITEM NUMBER: February 12, 2013 4.1 SUBJECT: Longevity Pay BACKGROUND: In 2012, the Wage and Benefits Committee considered the idea of longevity pay. The Committee submitted this idea to the Commission for discussion at the December Utilities Commission meeting. The topic was then discussed at the January Utilities Commission meeting. Direction was given to staff to bring back a longevity pay plan for further discussion in February with an analysis on implementing longevity pay for lineworkers only. Specifically, the direction given was to analyze the impact to the pay plan if longevity pay were to be implemented for the lineworker positions only. DISCUSSION: The longevity pay discussion at the January Commission meeting focused on starting the longevity pay steps at 5 years at 0.5% with a 0.5% increase every five years. For simplicity, this analysis looked at only 1%, 2%, and 3% longevity steps. This simplified analysis does not impact the results of the analysis, but rather makes for a cleaner presentation. Also, this analysis considered "lineworkers" to be those lineworkers whose position includes participation in the on- call rotation: Lineworker, Lead Lineworker, and Foreman. The paygrades for these three lineworker positions have enough wage separation that longevity pay could be implemented without a lower paygrade position with up to 3% longevity pay not exceeding the base pay for the next higher lineworker position. There are concerns with this approach. First, all three of these positions are non-exempt and subject to overtime. Although these three positions have occasional overtime associated with outages and projects, it is not routine. However, when considering the overtime and on-call stipend, there becomes an issue when compared to the Electric Superintendent position, which is an exempt position. With the equivalent of approximately 80 hours of overtime (time and a half) and 3% longevity pay, a Foreman would be making the same as the Electric Superintendent. This creates a situation where it is unlikely that an internal candidate would be interested in a �3 Page 1 of 2 NATURE Reliable Public Power Provider P D W E P E D T o S Eeve