CITY OF TALLAHASSEE
CITY COMMISSION AGENDA ITEM
ACTION REQUESTED ON: April 22, 2009
SUBJECT/TITLE: Assigned Vehicle Policy
TARGET ISSUE: Financial Viability of the Government

STATEMENT OF ISSUE

Over the last year, the Financial Viability of the Government Target Issue Committee has held discussions regarding the City’s assigned vehicle program with the objective of ensuring that assigned City vehicles are authorized only to provide cost savings and proper functionality for City government operations.

Subsequent to discussions by the Financial Viability Committee, the City Auditor published an audit of the assigned vehicle program as part of the 2008 annual audit plan. To address issues identified in the report and to strengthen the City’s policy and procedures governing the authorization of assigned vehicles, as well as to create savings for the City related to commuting costs, the attached Assigned Vehicle Policy (attachment 1) and Assigned Vehicle Evaluation and Approval Forms (attachments 2 & 3) were developed. This effort was undertaken by a task force, appointed by the City Manager, comprised of Rick Fernandez, Kevin Wailes, Chief Dennis Jones, Richard Lacondre, and chaired by Gloria Hall McNeil. The policy applies to all assigned City vehicles with the exception of those in the Police Assigned Vehicle Program and vehicles assigned to Fire unionized employees.

The major provisions of the policy establish criteria for authorization and set forth the rules and procedures for Assigned Vehicle authorization.

RECOMMENDED ACTION

Staff recommends adoption of the Assigned Vehicle Policy and forms attached, with an evaluation of the attached 86 Assigned Vehicles (attachment 6) to be completed no later than May 22, 2009. A 60-day notice period is recommended prior to elimination of any authorized vehicle assignment.

FISCAL IMPACT

It is estimated that the cost benefit analysis will result in additional savings of approximately $27,000 as a result of the elimination of assigned vehicle privileges. A reduction in commuting costs outside Leon County will result in additional savings. These savings will be calculated after the policy is implemented.

Gloria Hall McNeil, Director, Human Resources Department

Anita Favors Thompson, City Manager

For information, please contact: Gloria Hall McNeil, Director – Human Resources @ 8538

SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES

A review of the City’s assigned vehicle program indicated that the City had a total of 560 assigned vehicles of which 348 are in the Police Department. As a part of the FY08 budget cuts, the City reviewed and eliminated a total of 52 Assigned Vehicles. There are currently 446 assigned vehicles in operation, 355 in the Police Assigned Vehicle Program, five (5) assigned to Fire unionized employees, and 86 in various departments.
Attachments 4 and 5 summarize the audit’s issues, recommendations and options to help control costs, as well as provide notations showing how the new policy addresses these issues.

The attached Assigned Vehicle Policy (attachment 1) applies to all City assigned vehicles, with the exception of the Police Assigned Vehicle Program and those vehicles assigned to Fire Unionized employees, and was developed to upgrade the City’s Assigned Vehicle Policy and to provide cost savings and proper functionality for City operations. The Police Assigned Vehicle Program and vehicles assigned to Fire Bargaining Unit employees are being addressed separately to allow for specific analysis of the cost/benefit as well as the community service and safety implications of eliminating or reducing these programs.

The recommended policy provides for two (2) types of assigned vehicles:

On-Call: A City vehicle provided to an On-Call employee for the days where the On-Call responsibility is in effect to provide after hours emergency response.

Designated Assigned Vehicle: A City vehicle assigned to a specific position/employee with assigned authorization on an on-going basis for use when the employee is called back to work after hours to provide immediate customer response.

The major provisions of the newly developed Assigned Vehicle Policy are:

· Assigned vehicles may be authorized within the Leon County limits, at no cost to the employee, only for On-Call assignments to ensure more timely and efficient response to the City’s customers or, when after a cost/benefit analysis, it is determined that the use of the vehicle provides a benefit to the City.

· Assigned vehicles will not be authorized for commuting beyond the Leon County Limits regardless of benefit (with the exception of those employees traveling to and from City facilities located outside the Leon County limits). Employees with assigned vehicles who reside outside the County Limits will be required to park their assigned vehicles at secured parking locations within the County.

The policy identifies the responsibilities for all parties involved in the Assigned vehicle process and establishes procedures for requesting and approving assigned vehicles:

· Department Directors are responsible for recommending the authorization of On-Call vehicle assignments, with final review and approval by the appropriate Executive Team Member or Appointed Official.

· Department Directors are responsible for completing the cost/benefit analysis and resulting recommendations to request approval for a Designated Assigned Vehicle. This analysis will include both financially quantifiable factors and financially non-quantifiable factors. The applicable Executive Team member or Appointed Official is the final approving authority.

· Employees with authorized assigned vehicles are required to comply with all rules, regulations and procedures as described in City Policies.

All assigned vehicle authorizations must be documented, and forms are provided for this purpose (attachments 2 and 3). An annual re-authorization of all assigned vehicles shall be completed in November of every year.

Executive Benefits Discussion

Currently the City provides a leased vehicle to appointed officials, and a vehicle allowance is provided to Assistant City Managers, department directors, and a few other positions that in the past have been designated as eligible to receive an allowance. The City has been providing some variation of this benefit since at least 1981 and has utilized this benefit as part of the overall executive benefit package and as a tool for recruitment of executives and other designated senior management level positions. Over the years, the amount provided has been increased in order to maintain the benefit at levels comparable to other cities within Florida. A survey of comparable Florida cities was last conducted in FY03. At that time, this benefit was provided by the following Florida cities and Leon County: Clearwater, Daytona Beach, Fort Lauderdale, Hollywood, Lakeland, Largo, Miami Beach, Orlando, West Palm Beach. The current benefit amount is $250 per month. As the City Commission will recall, the benefit amount was reduced as part of the fiscal year 2008 budget process from $325 per month to the current amount. Currently there are 31 positions receiving this benefit at a cost of $93,000 annually. Additionally the directors for the CRTPA and BluePrint 2000 also receive an allowance as they are currently under the City’s benefit program. The total cost of the leased vehicles for the four appointed officials is $20,106 annually. This amount was also reduced as part of the 2008 budget process. Attachment 7 provides a listing of all employees receiving a vehicle allowance or leased vehicle.

Although the total cost of this benefit is $93,000, excluding the leased vehicles for the appointed officials, this amount would realize savings at this level if the program were eliminated and/or modified as we would have to reimburse employees for work mileage driven. As an example, reimbursing employees currently receiving this benefit for driving an average 100 miles per month (equivalent to driving 5 miles per work day), at the current IRS rate would cost the city approximately $20,460 plus associated administrative costs for processing the reimbursements. The net savings would be less than $72,540 annually.

As indicated at the April 15, 2009 special budget workshop, the following options are being considered for City Commission consideration as part of the budget approval process. These are presented only as information at this time and a final recommendation will be brought back as part of discussion of the overall employee pay and benefits package.

Convert the current benefit, in total or in a reduced amount, into base salaries and discontinue the benefit.

The current benefit is a static amount that does not increase with pay increases, is not included in an employee’s retirement benefit, and does not require the City to make annual MAP or retirement contributions. If moved to salaries, the amount would increase with time due to pay increases, require City retirement and MAP contributions, and increase retirement benefits.

One option is to reduce the benefit amount sufficiently to offset any increases related to pension benefits if the benefit is rolled into base salary. A 25% reduction in the benefit to $2,250 would accomplish this and result in a savings of $11,017 in fiscal year 2010. The reduced benefit amount offsets any increases in pension and MAP contributions for the next five years, i.e. the benefit amount would gradually increase and be equal to the current benefit after a five-year period. Future hires would not be provided this benefit.

Grandfather in the current benefit and discontinue the benefit for future hires.

The current benefit was provided as an incentive for recruitment, and employees accepted positions with the City with the knowledge that this benefit was part of the overall compensation for their position. Eliminating this benefit would result in pay cuts for employees receiving the benefit ranging from 1.9% to 8.3%. Attachment 7 provides a column indicating the pay cut ranges for those employees receiving this benefit.

A review of the 31 individuals receiving this benefit indicates that almost half of the employees, or 15 employees, are retirement eligible and/or in DROP. Within the next 3-5 years most of these employees will have retired. If this benefit were grand fathered in for the current recipients, savings estimated at $45,000 could be realized over the next four years.

This benefit would be discontinued and future hires would not be offered this as part of the compensation package.

Reimburse for Mileage Driven

During the fiscal year 2008 budget process, department directors were asked to submit an estimate of weekly miles driven for official city of Tallahassee business. Although the information provided was just an estimate and was not based on actual tracking of miles, it provides a starting point to determine the impact of only reimbursing employees with mileage reimbursement in lieu of the vehicle allowance. Based on the information that was gathered in 2007, total mileage reimbursement would cost the City $47,064. This number is only based on the actual mileage reimbursement and does not take into account the cost of staff time to process mileage reimbursements. Staff from each individual department, payroll staff and Treasurer-Clerk’s Office staff would be involved in processing any reimbursements.

Obtain Mileage and Set an Annual Travel Reimbursement Amount

Along the lines of the concept of reimbursing for mileage, a different variation would be to ask employees to track actual mileage for official city business over a three month period. Once this information is gathered an average travel reimbursement amount would be calculated and utilized over the next fiscal year. Using data obtained in 2008 for mileage driven by department directors, an average annual reimbursement rate would total $1,680 or a reduction of $1,320 over the current benefit amount for a total savings of $40,920.

As indicated previously, these options are ones being considered and a final recommendation will be brought back to the City Commission as part of the overall discussion related to pay and benefits during the upcoming budget process.

OPTIONS

Option 1: Adoption of the Assigned Vehicle Policy and Forms as presented. Implementation of the recommended Policy and Forms will strengthen the process for authorizing Assigned City Vehicles, and results in the immediate evaluation of the 86 current Designated Vehicle assignments.

Option 2: Provide alternative direction to staff.

ATTACHMENTS/REFERENCES

Attachment 1: Assigned Vehicle Policy
Attachment 2: Designated Vehicle Approval Form
Attachment 3: On-Call Assigned Vehicle Approval Form
Attachment 4: Summary of 2008 Audit Recommendations
Attachment 5: Cost Reduction Options from 2008 Audit
Attachment 6: List of Impacted Vehicle Assignments
Attachment 7: Listing of Positions Receiving Executive Benefit