Observations in Utility Governance
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Observations in Utility Governance By Don Habicht – Worthington Public Utilities General Manager Retired Minnesota Municipal Utilities Summer Meeting Tuesday, August 15, 2006. Benefits of Public Power. Equal or greater reliability

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Observations in Utility Governance

By Don Habicht – Worthington Public Utilities General Manager Retired

Minnesota Municipal Utilities Summer Meeting

Tuesday, August 15, 2006


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Benefits of Public Power

  • Equal or greater reliability

  • Efficient service – lowest cost consistent with reliability, community goals and sound business practices

  • Lower electricity rates

  • Responsiveness to customer concerns – every citizen is an owner with a direct say in policies

  • Not-for-profit status – lower costs and no split allegiance between customers and stockholders


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Benefits of Public Power Continued

  • Greater portion of revenues stay in community

  • Tax payments, payments-in-lieu-of-taxes and / or transfers to the community’s general fund

  • Local control over the electric distribution system aesthetics and design

  • Primary mission of providing least-cost, reliable service over maximizing profit


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Maximizing the Benefits of the Public Utilities in your community

  • Governance

  • Financial Management

  • Work Force Planning


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Governance communityTypes of Cities by Government Structure

  • Statutory cities

    • Operate under Chapter 412 of the Minnesota Statutes

    • 747 Statutory cities in Minnesota

  • Home rule charter cities

    • State law allows any city to adopt charter or local constitution

    • 107 cities have adopted home rule charters in Minnesota


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Governance – communityThe City CharterTypes of Cities by Government Structure

  • Both statutory and home rule charter cities can establish a public utilities commission with the power and duties established for such bodies by law.

  • 47 percent of the Minnesota Municipal Utilities Association member cities electric utility operations are governed by a public utilities commission.


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Governance - communityBylawsCommission and City Council Members, Managers and Superintendents

  • Membership – eligibility, vacancies, voting and attendance

  • Meetings – notices, quorum and open meeting law

  • Agenda/Minutes

  • Officers

  • Organization of the Public Utilities – departments, policy, management and employees


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Governance communityBylaws continued

  • Power and Duties of the Commission – real estate and contracts, extension of services, joint operations with others, use of thoroughfares for utility installations, rates, authority for expenditures, bond issues, public information expenditures and accounting and budget reports

  • General Provisions – amendment of bylaws and severability of bylaws


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Governance communityCouncil and/or Commission Policy

  • Ends

  • Council and/or Commission – Administrator, General Manager or Superintendent Linkage

  • Administrator, General Manager or Superintendent Limitations

  • Governance Process


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Governance communityPolicy

  • Ends

    • Mission Statement

    • Vision Statement

    • Core Values


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Governance communityPolicy

  • Council and/or Commission – Administrator, General Manager or Superintendent Linkage

    • Global Governance – Management Connection

    • Unity of Control

    • Accountability

    • Delegation

    • Monitoring Performance

    • Annual Evaluation


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Governance communityPolicy

  • Administrator, General Manager or Superintendent Limitations

    • Emergency Succession

    • Treatment of Staff

    • Asset Protection

    • Compensation and Benefits

    • Financial Planning and Budgeting

    • Financial Condition and Activities

    • Communication and Support to Policy Makers

    • Treatment of Consumers


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Governance communityPolicy

  • Administrator, General Manager or Superintendent Limitations - Continued

    • Value-added Products and Services

    • Pricing of Products and Services

    • Community Development


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Governance communityPolicy

  • Governance Process

    • Global Governance Commitment

    • Governing Style

    • Agenda Planning

    • Policy Makers Job Description

    • Role of the Chair

    • Code of Conduct

    • Cost of Governance


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Financial Management community

  • Strategic Financial Plan

    • Annual Budget

    • Five Year Operation and Maintenance Summary

    • Capital Improvement Program

    • Equipment and Vehicle Revolving Schedule

    • Five Year Flow of Funds Summaries

    • Reserve Account Policy


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Financial Management community

  • Monthly Financial Reports

    • Balance Sheet

    • Sales Report

    • Statement of Revenues and Expenses

    • Statement of Cash Flows

  • Annual Report - Audit


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Work Force Planning community

  • A significant portion of the public power work force will be eligible to retire during the next five to seven years.

  • The positions that will experience the most retirements may also be the most difficult to replace; first line supervisors, senior managers, and general managers

  • The loss of critical knowledge and the inability to find replacements with utility specific skills are two of the biggest challenges that public utilities face as a result of the aging work force

  • Public utilities need to do more to plan for their future work force needs


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Work Force Planning community

  • Recruiting and Training

  • Competitive Salaries

  • Benefits


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Work Force Planning community

  • If 20 to 25 percent of your workforce do not have tattoos or body piercings you are not keeping up with change



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Sources of Information community

  • Other APPA publications

  • Minnesota Municipal Utilities Newsletters and other information

  • Minnesota Municipal Utilities Association – Meetings and Workshops

  • American Public Power Association – Meetings and Workshops


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