Riverside Public Utilities Succession Planning Recommendations Spring 2011
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1 Riverside Public Utilities Succession Planning Recommendations Spring 2011
2 RPU Fact Sheet Obligation to Serve & Local Control Annual budget - appx. half a billion dollars/yr $400 to $500 million 5 year CIP Total assets - $8 to $10 billion (FMV) 640 employees (9% vacant) Vertically integrated Utilities Provides and supports City services National and state regulatory impacts growing Facilities in multiple regions and states Riverside is an area of growth Regional economic driver
3 Succession Planning Goal Our Mission Statement Prepare for significant retirements in an era where replacement candidates are scarce Ensure that management transition over the next decade is smooth for the customers, City and employees Build a workforce that represents our community through proactive planning rather than marketplace supply Recommendation: Add 8 strategically placed managers and reclassify several positions for better leadership development
4 RPU - A Great Place to Work! Result of years of effort! Well Governed Council, Board and Community Recognition National Recognition Leader In Clean Energy & Conservation Water Independent Highly Qualified, Professional Staff Advancement Opportunities State of the Art Facilities and Equipment Healthy Budget, CIP and Growth Area
5 Succession Planning Concerns Recession & hiring freeze in late 80s/early 90s Appx. 1 out of 5 RPU employees is over 55 Appx. 1 out of 3 is over 50 Small candidate pool in mid-career range Power Resources - 3 Power Resource s positions filled by 9 people in less than 6 yrs. Upper management recruitments yield few, if any, qualified applicants SCPPA members poaching from each other California not attractive for relocation
6 Successful Efforts Succession planning in many areas has been a successful decade-long effort Most clerical type jobs are adequately structured and attract qualified candidates Field positions are recruited at entry level, trained through an RPU apprentice program, and appropriately structured for succession planning Most entry to mid-level professional positions aren t a recruiting challenge
7 Retention Challenges Retention less challenging than recruitment Limited areas with significant impacts Utility specific salaries and benefits need to be comparable to other Utilities Most salaries are set at competitive levels Resignations of several excellent staff due to salary differentials have occurred May need occasional promotional opportunities at times when positions are not available Some resignations are normal and expected A resignation should not create a major problem
8 Recruitment Challenges Mid-level professional positions and above Growing candidate shortage RPU college majors not a high student priority, nor is locating to Riverside Even a recessionary economy is not providing enough qualified candidates All Utilities hiring from a shrinking candidate pool Professional staff sought for RPU must often relocate Specifically Principal Engineers in Water and Energy Delivery Senior Engineer openings can experience candidate shortages Experienced Resources positions and Scheduler/Traders Water and Electric Superintendents Finance/Accounting staff with specific training in Utilities Marketing/Communications staff with training in Utilities
9 Overall Plan Short term: Identify and recruit critical staff for succession planning needs Many positions don t have a qualified internal candidate pool Effort requires several positions and reclassifications Double fill some positions where retirements are imminent Expanded economic development efforts benefit RPU Long Term: Encourage individuals with upward potential for a long-term career at RPU Competitively identify high potential candidates for promotion Add programs and training to facilitate their advancement Create a candidate pool of mid-level staff for promotion Counsel individuals without development potential
10 Five Current RPU Divisions Utilities General Secretary DGM Electric Delivery AGM Water AGM Resources AGM CFO - Administration AGM Marketing Cust. Rel. Existing Position Reclassification New Position
11 Water Division Develop candidates for AGM Water Need increased subordinate development Esp. managerial and administrative area Development of broad Utility perspective Provide time for development of strategic initiatives Principal Engineers Very flat organizational structure - 5 to 15 direct reports Significant time spent on detailed project level issues Superintendents (Field Management) Only management level in field organization Manage people, selected from crew supervisors Limited theory and supervisory experience Need management development time and support
12 Water Org Chart AGM Water Principal Engineer Principal Engineer Principal Engineer Principal Engineer Principal Engineer Principal Engineer Water Operations Water Superintendent Water Superintendent
13 Water Division Reclassify 2 Engineering s from existing Principal Engineer positions Engineering positions part of historic structure Remaining Principal Engineers report to new Engineering positions Add 2 Water Operations s Add 1 Superintendent
14 Water Recommended Org Chart AGM Water Engineering (Delivery) Engineering (Resources) Water Operations Water Operations Water Operations Principal Resource Analyst- Regulation 2 Principal Engineers 2 Principal Engineers Water Superintendent Water Superintendent Water Superintendent
15 Energy Delivery Eminent Retirement of AGM Existing structure does not develop a candidate pool Two external recruitments to develop candidates in 3 years One hired away by a SCPPA member, RPU hired from a SCPPA member Recruitments Taking 6-12 Months - Longer Engineering s, Principal Engineers and Senior Engineers all suffering the same challenge Recruitments not delivering candidates Need to reinstate Principal Electrical Engineer designation Recommendation Add one Engineering Add two Electric Superintendents
16 Energy Delivery Org Chart AGM Energy Delivery Engineering Electric Operations Electric Field Safety Project Assistant 4 Principal Superintendent 2 Superintendents Engineers IBEW Supervisors Outside Constr. Mgr. IBEW Supervisors
17 Energy Delivery Recommended Org Chart AGM Energy Delivery Engineering Engineering Electric Field/Operations Electric Field/Operations Safety Project Assistant 2 Principal E. Engineers 2 Principal E. Engineers 3 Superintendents 2 Superintendents Outside Constr. Mgr
18 Resources Annual power budget: ~ $170 million RPU is only muni: Participating Transmission Owner Located within CAISO Scheduling Coordinator Performs all wholesale power supply functions with own staff In CA, only Anaheim and Pasadena similar Some utilities outsource at a higher cost RPU provides its own services and for several other utilities Larger munis (IID, SMUD, LADWP) aren t in the ISO Can t recruit from them as no ISO training They look to RPU for candidates
19 Resources (cont) No direct degree programs - OJT and experience Source degrees of Business, Math, Engineering Aptitude for industry, theory and application Not all hired develop Experienced individuals sought after by others Upper level - national recruiter, salary increased by 25%, still only 2 qualified candidates over 12 mos Must develop own Resources employees as we can t find experienced outside candidates Succession planning mostly resolved in this division
20 Resources Org Chart - First Tier AGM Resources Power Resources (Scheduling) Power Resources (Marketing) Power Resources (Contracts/Proj.) Generation Real Property Agent
21 Resources - Recommendations No new positions, possible reclassifications Consideration of reclassifying Settlements series into Resource Analyst series Requires HR job description and duties review Create a lower entry level compensation range to develop candidates Minimum standards for recruitment still requires a good long term fit Add entry level staff if RPU s are recruited away
22 Finance FASB/GASB provided in college courses No FERC/MW/MMbtu accounting No energy risk or regulatory compliance management No utility ratemaking Multiple years and areas of focus to develop analytical ability Accountant doesn t equal a capable Analyst CPA type experience highly desirable Current structure not developing candidate pool Principal Analyst and Level Recruitment Challenges Small pool Promotional opportunities at other utilities Often just technical proficiency OR managerial development Need cross training
23 Finance Org Chart AGM Finance (CFO) Assistant CFO Finance/ Rates Business Systems Support IT Liason Utility Billing Supervisor Regulatory/ Energy Risk Utilities Principal Analyst (0.5) Utilities Pricing Analyst Utilities Principal Analyst (0.5) Utilities Senior Analyst Senior Accountant 2 Senior Accountants
24 Finance Recommendations Create Utilities Fiscal position Add one position Consider reclassifying 5 existing positions Need HR assistance One Utilities Fiscal Reclassify Pricing Analyst to Utilities Analyst Series Promote after training, if appropriate 3 Sr. Accountants to Utilities Sr. Analysts
25 Finance Org Chart - Recommended AGM Finance (CFO) Assistant Utilities CFO/ Util. Fisc. Mgr. (Finance/Budget) Utilities Principal Analyst Utilities Fiscal (Rates/Revenues) Utilities Principal Analyst Utilities Fiscal (Cap./Spec. Projects) Utilities Principal Analyst (0.5) Regulatory/ Risk Utilities Principal Analyst (0.5) IT Liason Business Systems Support Utilities Senior Analyst Utilities Senior Analyst Utilities Senior Analyst
26 Marketing Customer Relations Fast growing discipline for municipal utilities Growing regulation at state and national levels Conservation & rebates a significant effort 22,000 rebates in 2009/10 Increased customer expectations and contacts Outsourced communications poor and high cost Few candidates with regulated industry experience Need management training in all functional areas Increase understanding of experience requirements Green responsibilities an additional skill set
27 Marketing Org Chart First Tier AGM Marketing & Customer Relations Public Benefit / Bus. Relations Marketing Sustainability Officer Customer Service Field Service
28 Recommendations Mktg. Consider reclassification of 3 existing positions to Public Benefits/Customer Relations HR assistance required One Principal Account position in each section Reclassify two from existing a/c manager positions HR assistance required
29 Recommended Org Chart Long Term AGM Marketing & Customer Relations Pub. Ben./ Customer Rel. (Rebates and Account Reps.) Pub. Ben./ Customer Rel. (Marketing / Communications) Pub. Ben./ Customer Rel. (Customer Service) Sustainability Officer Principal Account Rep. Principal Account Rep. Principal Account Rep. Field Services
30 Study Area - Compensation Entry to mid-level management compensation levels remain at average Mid-level and above should allow for above average for excellent performance Use private sector model Utilize merit pay Merit pay only to be utilized for individuals with significant performance effort or promotional potential Employees with average performance or without promotional potential compensated at average levels New evaluation criteria may be required
31 Position Summary At most: Water Add 3 positions, 2 reclassifications Electric Delivery Add 3 positions Resources 3 reclassifications Finance Add 1 position, 5 reclassifications Marketing/Customer Service Add 1 position, 5 reclassifications 8 new positions 15 reclassifications
32 Impacts New and Reclassifications from existing positions Incorporate into annual budget Possibly implement over several years No impact on rates Riverside Public Utilities Prepared for the Future
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