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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

benefits of public power
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
benefits of public power continued
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
maximizing the benefits of the public utilities in your community
Maximizing the Benefits of the Public Utilities in your community
  • Governance
  • Financial Management
  • Work Force Planning
governance types of cities by government structure
GovernanceTypes 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
governance the city charter types of cities by government structure
Governance – The 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.
governance bylaws commission and city council members managers and superintendents
Governance - BylawsCommission 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
governance bylaws continued
GovernanceBylaws 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
governance council and or commission policy
GovernanceCouncil and/or Commission Policy
  • Ends
  • Council and/or Commission – Administrator, General Manager or Superintendent Linkage
  • Administrator, General Manager or Superintendent Limitations
  • Governance Process
governance policy
  • Ends
    • Mission Statement
    • Vision Statement
    • Core Values
governance policy11
  • Council and/or Commission – Administrator, General Manager or Superintendent Linkage
    • Global Governance – Management Connection
    • Unity of Control
    • Accountability
    • Delegation
    • Monitoring Performance
    • Annual Evaluation
governance policy12
  • 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
governance policy13
  • Administrator, General Manager or Superintendent Limitations - Continued
    • Value-added Products and Services
    • Pricing of Products and Services
    • Community Development
governance policy14
  • Governance Process
    • Global Governance Commitment
    • Governing Style
    • Agenda Planning
    • Policy Makers Job Description
    • Role of the Chair
    • Code of Conduct
    • Cost of Governance
financial management
Financial Management
  • 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
financial management16
Financial Management
  • Monthly Financial Reports
    • Balance Sheet
    • Sales Report
    • Statement of Revenues and Expenses
    • Statement of Cash Flows
  • Annual Report - Audit
work force planning
Work Force Planning
  • 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
work force planning18
Work Force Planning
  • Recruiting and Training
  • Competitive Salaries
  • Benefits
work force planning19
Work Force Planning
  • If 20 to 25 percent of your workforce do not have tattoos or body piercings you are not keeping up with change
sources of information21
Sources of Information
  • Other APPA publications
  • Minnesota Municipal Utilities Newsletters and other information
  • Minnesota Municipal Utilities Association – Meetings and Workshops
  • American Public Power Association – Meetings and Workshops