Education

Most University of Iowa utilities workers take offers from new private operator

Massive 50-year deal set to close Tuesday

University of Iowa President Bruce Harreld (second from right) and Board of Regents President Mike Richards (far left) s
University of Iowa President Bruce Harreld (second from right) and Board of Regents President Mike Richards (far left) sign formal partnership documents with Romain Limouzin (far right), senior investment director with Meridiam, and Andre Cangucu, chief business development officer at ENGIE North America on Dec. 10 in the Board of Regents Office in Urbandale. The deal closes Tuesday. (Vanessa Miller/The Gazette)

IOWA CITY — Six out of every seven current University of Iowa utility system employees have accepted an offer to work for its new private utilities operator, who agreed to join forces with the campus in December as part of a novel public-private partnership.

ENGIE North America — along with Paris-based investor Meridiam — are paying the university an upfront $1.165 billion to manage its utility system for the next 50 years.

The campus is investing most of that in an endowment it can pull from annually to support strategic initiatives.

The university also will tap the endowment to help cover an annual increasing fee to its private operator, which starts at $35 million, plus the cost of employee salaries, fuel, and capital expenses.

UI officials on Thursday did not immediately say how much they expect to spend subsidizing salaries and benefits for those employees moving over to ENGIE and those remaining UI employees.

Of 150 total employees offered to work at ENGIE on the UI campus, 127 accepted — including 94 of 117 regular employees, or 80 percent, and all 33 student employees.

Of the 23 UI utilities employees who aren’t moving over under ENGIE, 17 declined offers and six didn’t respond.

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Those 23 staying with the university will be reassigned to another UI position or remain in their current assignment, according to the UI Office of Strategic Communication.

Campus administrators are finalizing each employee’s transition plan as the university moves to close the deal, set for Tuesday — exactly 90 days from the Dec. 10 signing of the deal.

The UI officially will transfer management of its utilities system to ENGIE the next day.

In preparing for the transfer, ENGIE representatives for weeks met with UI utilities employees regarding employment options and benefit packages. The company hosted four benefit fairs on Jan. 14-15 for employees and their partners, plus held one-on-one meetings with “all full-time utilities employees affected by the transition,” according to UI Strategic Communication.

“Team members had a chance to share input and ask questions about anything important to them as they consider employment options,” according to the university.

All were offered jobs “without a formal interview,” as promised in ENGIE’s proposal to campus — when it was vying for the contract.

“In lieu of a formal application and interview process, which we believe to be needlessly stressful and laborious for the existing employees, we will hold one-on-one employee consultations,” according to the proposal, which stated the meetings aimed to introduce employees to ENGIE, answer questions and “understand their career and personal objectives.”

The company, in its proposal, vowed to offer all UI employees pay and benefits closely aligned to what they earned as UI employees. It also noted “signing or retention bonuses may be a factor.”

“The base compensation for the employees will stay the same as part of the transition from UI employment to ENGIE employment and afford the employees a greater number of opportunities and the potential to earn higher wages over time,” according to the proposal.

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The university didn’t immediately provide details of compensation offers to the utilities employees and how the offers compared with existing pay and benefit packages.

The university also didn’t provide details of why those 17 employees who rejected offers did so.

According to ENGIE’s proposal, employees would have 10 business days to review, execute and return offer letters to ENGIE — at which time onboarding would begin.

“ENGIE plans for all employees to be fully onboarded by day 1 of the concession and comfortable with all administrative components of their employment,” according to the proposal.

ENGIE’s proposal laid out a transition plan that promised to — among other things — negotiate and sign a new collective-bargaining deal. Iowa’s public university employees lost most union rights when lawmakers in 2017 stripped the state’s collective-bargaining laws.

In a statement, UI Associate Director of Utilities Distribution Rick Ney thanked the staff for its involvement and said, “We’re excited about merging best practices with ENGIE and continuing to keep the utility system running reliably for all our important customers.”

Comments: (319) 339-3158; vanessa.miller@thegazette.com

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