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HANDOUT AT MEETING - 2024-7 - 5.1 <br />Elk River <br />Municipal Utilities UTILITIES COMMISSION MEETING <br />TO: <br />FROM: <br />ERMU Commission <br />Mark Hanson — General Manager <br />MEETING DATE: <br />AGENDA ITEM NUMBER: <br />July 9, 2024 <br />5.1 <br />SUBJECT: <br />2024 Compensation Study Update <br />ACTION REQUESTED: <br />Approve a Revised Pay Plan, Implementation Method, and Implementation Date <br />I:TeT�I.(h:Z�1�1► GJEi <br />At the June 2024 commission meeting, the Commission received Baker Tilly's 2024 <br />Compensation Study, including a proposed pay plan. Sarah Towne, Baker Tilly's consulting <br />manager, reviewed the process used to identify the market pay averages and develop a <br />proposed pay plan. She stated on average, ERMU is 4.4% below market at the minimum, 9.5% <br />below market at the midpoint, and 12.8% below market at the maximum. This under -market <br />positioning likely impacts ERMU's ability to attract and retain talent. <br />Ms. Towne then reviewed the differences between ERMU's existing pay plans and Baker Tilly's <br />proposed plan. Most notably, the proposed plan is a single plan across all the pay categories. <br />ERMU currently maintains four separate pay plans: managers, office, field, and lineworkers. By <br />consolidating all positions into a single plan, job evaluation driven grade assignments are more <br />consistent and equitable. The second significant difference is the proposed plan is a 9-step plan <br />instead of the existing five -step plans. Lastly, Ms. Towne presented four possible <br />implementation scenarios for how to transition staff from ERMU's existing pay plans to the <br />proposed plan. <br />After discussing the proposed pay plan and implementation scenarios, the Commission <br />generally agreed a 9-step plan was too long. Additionally, commission members generally <br />agreed it was in ERMU's best interest to strive for slightly market leading maximums. <br />In closing, the Commission directed staff to work with Baker Tilly to develop a revised 7-step <br />plan with the same maximums as the 9-step plan. Commission members also asked staff to <br />provide examples of how staff would transition from ERMU's current plan to the proposed plan, <br />and to determine whether the surveyed comparable peers offered incentive pay programs. <br />DISCUSSION: <br />Baker Tilly's Sarah Towne will present two options for a 7-step pay plan. A 7-step plan offers a <br />balanced approach by providing more frequent salary adjustments than the existing 5-step <br />Page 1 of 3 <br />