The URL can be used to link to this page

Home My WebLink About2008-08-11 08-277 ORDERItem Ro. 38 277 Date: August 11, 2008 Item/Subject: Order, Amending Section 9.5.3 of the Revised Personnel Rulesand Regulations, Personal Vehicle use Responsible Departincl Executive Commentary: This Order would amend Ne mileage reimburserrentand mileage stipend foonulascurrently, contained in the Personnel Rules and Regulations to reflect any periodic adjustments made by the Internal Revenue Service (IRS). Currently, the City's policy Isto(allow the IRS ate established each January 1^. The Policy roes not permit any mid year adjustments, such as the one recently implemented by the IRS effective July 1", which moved the reimbursement ate from $0.505 m $0.585 per mile. With this Proposed amendment, the City's Policy would follow the IRS established rate throughout the year, including any upward or downward adjustments that might be made. The cost to implement this change from this point to January J°, the next regularly scheduled adjustment date, is approximately $3,500. Department Head This was rewe nd! and recommended for approval of the July 29h" Government 0 ,atdN'n itee Meeting. City Manager Associated Information: Order, Background Memorandum and Survey Infonnaton. Budget Approval Finance Director Legal Approval; lici[ar X Passage _ First Reading - Page _ of _ Referral Assigned to Cou eilov n•Errico August U. 2008 CITY OF BANGOR 08 277 d�1 (TITLE.) Ord", Amending Section 9.5.3 of the Revised Personnel Rules and Regulations, Personal vehicle Use By the Olty Counal of the Oty of Bangor. ORDERED, THAT, Section 9.5.3 of the Revised Personnel Rules and Regulations is hereby amended as follows. Effective January 1, 2006 and for subsequent years, the City will use the Internal Revenue Service Rate e-'-o,."->m. t 1as its established reimbursement rate. For those employees who receive a mileage stipend in lieu of a City vehicle, tracking actual mileage, or as pan of a negotiated compensation package, adjustments to those stipends will be made ea-er-about January 1' of eachyear at the same percentage rate change as established by the IRS for mileage reimbursement purpose. BE IT FURTHER ORDERED THAT the effective date of this Amendment shall be August 11, 2008 NOTE: Deletions are saiekeB IN CILY CDOBCIL dogaet 11. 2888 Notion Made and secw ed for Passsage Notiaa Doubted Vote: 6-2 C cilota VOeleg Yes: Blanchette, D'grrico, Farrington. Gratvtck. Haves and Stone Councilors Voting No: Palmer and Nh Pa sd = mm (II3LHJ Emending Section 9.5.3 0£ the eeviaed Peraamel Delee and RHgelatious. Personal Vehicle Use E.awmr000aswr U/�/ J8 277 rra�rr:�t.u� To: Govemment Operation Committee From: Bob Famer, Assistant City Manager/Human Resources Director Subject: Follow—up Information— Mileage Reimbursement Rate Date: July 24, 2008 At the last Government Operations Committee meeting, the Committee discussed a proposal to increase the mileage rate from 50.5 cents per mile to 58.5 cents per mile, in an effort to remain current with the recent IRS adjustment that became effective July 1". Due to the large increase in fuel costs, the IRS detltled to make a mid -year -adjustment and the question is whether the City wishes to make this adjustment mid -year or wait until January 1°. (A more detailed discussion is presented in the attached memorandum prepared for the previous meeting.) The Committee had requested additional information in two areas before reaching a decision: a survey of other communities and the IRS methodology for establishing the reimbursement rate. In terms of the survey, attached is a summary of the mileage rates in the twelve largest communities in Maine and as well as four nearby communities and the State of Maine. Of these communities all but three and the State of Maine follow the IRS rate and all made the 8 cent adjustment on July 1". Thus, the prevailing practice is to follow the IRS rate and make adjustments as they occur. Regarding the methodology of establishing the rate, the IRS does not provide specific information on how that is developed. They do note that the factors considered include vehicle depreciation, maintenance and repairs, gasoline and gas taxes, oil, insurance, and vehicle registration fees. And they do indicate that the depreciation component is presently 21 cents of the 58.5 cents per mile rate. I believe this responds to the questions raised at the last meeting. Should there be any questions in the meantime, please feel free to contact me at your convenience. VEHICLE MILEAGE REIMBURSEMENT SURVEY TOWNICIT POPULATION RATE YIN RATE$0585EADJ PORTLAND 6G376- LEWISTON 36165V _ BANGOR 3104]�Y $0.605 $0.W5 50.505 80585 11200905 @009 _ _ SO PORTLAND 235]]Y $0.505 _.1tl _ 30505 1112W9 AUBURN 23565N $0.30 ADJUSTED]/1N] UNKOWNN _ BRUNSWICK 2170l,5 NZ .40.505 $0505 VM009 $0.505 $0585 1/V2009 SANFORD _ 21507Y BIDDEFORD 21341IY $0505 1/12009 _$0.505 $0.505 505051_1112009 _ _ AUGUSTA 16603Y $0.505 W0595 J_ $0505 1112009 I_1112009 __ SCARBOROUGH _ 10515 Y _ _ SACOWEST 10222 Y _ ORONO OOK 15950Y ORONO _�_ 940] N �- BREWER 9250Y $0.505 Y0.505 SOA85 90.505 $0585 N/A $0505 rNKO009 UNKOWN 1/1Y2009 _ OLDTOWN 1930Y� $0505 _ _ HANIPDEN., 8]5]Y STATE OF ME r --N - 50.505 _$0505 $0585 �_L1O009 _ 50.42 90.42 ]112008 N J 08 X77 To: Government Operations Committee From: Bob Farrar, Assistant City Manager— Human Resources Director Subject: IRS Mileage Reimbursement Rate Date: July 11, 2008 Effective July 1', the Internal Revenue Service adjusted the standard mileage reimbursement rate from 50.5 cents per mile to 58.5 cents per mile, reflecting the significant Increase In gasoline costs since its last adjustment on January 1d of this year. Mid -year adjustments by the IRS have historically been infrequent; January 0 i the normal adjustment time. For employees receiving mileage reimbursement, the City adopted the IRS rate by Council Order effecdw January 1, 2006 as follows; -Effective January 1, 2006 and for subsequent years, the Gty will use the Internal Revenue Service Rate established each January 1a as Its established reimbursement rate" for employees who must use their personal vehicles for City Business. For those employees receiving mileage stipends/allowances, the City adopted the following language by Council Order in late 2006: "For those employees who receive a mileage stipend in lieu of a city vehicle, tracking actual mileage, or as part of a negotiated compensation package, adjustments to those stipends will be made on or about January 11 of each year at the same percentage rate change as established by the IRS for mileage reimbursement purposes". Thus, while the City has adopted the established IRS rate for mileage reimbursement purposes, and assisting with calculating stipend adjustments, additional qualifying language specifying January 1° was also included. This language would appear to preclude mid -year adjustments, such as the most recent July 1a change. Making this adjustment for mileage reimbursement and stipend adjustments would have an annual impact of approximately $4,700 to the General Fund and $2,500 to various Enterprise and Grant Funds, totaling about $7,200. Mileage reimbursement in the General Fund occurs primarily in Assessing, Code Enforcement and Health and Community Services and there are approximately a half dozen Department/Dhdslon Heads who receive a mileage stipend. Options: 1. The City can follow the existing language and leave the rate at 50.5 cents per mile until January 1, 2009, when the next regularly scheduled rate adjustment would be announced. In the meantime, employees would receive a reimbursement rate lower than the IRS established rate and no mid -year adjusbnents would occur. O8 477 2. The personnel Rules and Regulations could be amended to include language indicating that the City would follow the established IRS rate regardless of the adjustment time; or whether the rate increased or decreased. A survey of other communities who use the IRS rate indicates that a majority does follow the most current IRS rate and are changing to the revised rate July la. Recommendation: The City's position has been that employees should be fairly reimbursed for using their vehicles to conduct City business. And we have determined that the IRS rate is a reasonable standard upon which to base our reimbursement rate. Accordingly, we would recommend that the Committee endorse an amendment to the Personnel Rules and Regulation that deletes the January 10 reference, essentially allowing the CiNs reimbursement rate to fluctuate with the established IRS rate. If approved by the Committee, the amendment would be sent to the City Council for consideration. Should you have any questions or need further information before Tuesday's meeting, please feel free to contact me at your convenience. I