PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #9.F
SUBJECT/TITLE:
CITY COUNCIL AUTOMOBILE ALLOWANCE POLICY
RECOMMENDATION:
Adopt a Resolution enacting an Automobile Allowance Policy to reimburse City Council Members and the Mayor for actual and necessary expenses.
BACKGROUND:
Expense reimbursement practices for city officials are primarily regulated by Government Code Sections 36514.5 and 53232 et seq. (provisions enacted in 2005 by AB 1234).
These laws stipulate, among other things, that Council Members may only receive expense reimbursement for “actual and necessary” expenses incurred in the course of their duties, and only as documented by expense report forms and/or accompanying receipts, which generally precludes such payments being made on a proactive or estimated basis.
That general prohibition notwithstanding, the California Attorney General has rendered an opinion that the payment of a vehicle allowance (i.e. a proactively paid stipend) to Council Members, intended to offset the actual and necessary costs of vehicle travel associated with the performance of official duties, is a permissible exception to the general rule under AB 1234 that expenses may only be reimbursed retroactively.
On June 21, 2022 the City Council received a report from staff on current Council Member and Mayor compensation (salary) and expense reimbursement practices, including options for a potential salary increase. At that time, among other direction given to staff, a majority of the City Council directed staff to prepare and return a Council Member Automobile Allowance policy for Council consideration. The June 21, 2022, staff report is available in the Access Pismo public records portal at www.pismobeach.org/accesspismo1 , or by scanning the QR Code at right.
Automobile Allowance Program
In accordance with Government Code Section 1223, the proposed Automobile Allowance Policy involves the execution of an agreement by each Member wishing to receive the allowance. If the Council acts to adopt a Resolution enacting the program (Attachment 1), any Member could then opt to execute an Automobile Allowance Agreement (Attachment 1.A) with the City, containing the following key provisions:
A $100 allowance shall be paid to the Member at the start of each month. The Member shall be required to maintain all licenses and other records required by law associated with the vehicle use.
1 Full URL: https://accesspismo.pismobeach.org/WebLink/DocView.aspx?id=431003&dbid=0&repo=Laserfiche
9.F-1Council Agenda 7-19-2022
The Member shall no longer be entitled to the first 100 miles’ worth of mileage expense reimbursement normally granted to City officials by the Purchasing Policy, with the exception of travel-related reimbursements. A comporting change has been proposed as part of the Purchasing Policy Update item on the Council’s July 19, 2022 meeting agenda.
The Agreement shall remain in effect until the Member leaves office, or otherwise chooses to terminate the agreement, or until the Council ends the practice of allowing such agreements.
Conclusion and Recommendation
In accordance with the Council’s June 21, 2022 direction, staff recommends that the City Council adopt a Resolution (Attachment 1) enacting an Automobile Allowance Policy.
Any Member could then opt to execute an Automobile Allowance Agreement (Attachment 1.A) with the City, with the first payment made the following month.
FISCAL IMPACT:
The fiscal impact associated with this item depends on how many City Council Members avail themselves of the opportunity to execute an Automobile Allowance Agreement with the City. For each Member who executes an Agreement, the fiscal impact is an additional $100 expenditure per month, per Member, in the General Fund City Council Department car allowance account, for a maximum cost of $5,500 in FY 2023 and of $6,000 in future fiscal years, if all Members were to execute the Agreement.
Because execution of an Automobile Allowance Agreement precludes a Council Member from claiming the first 100 miles’ worth of mileage reimbursement for vehicle trips associated with official duties, the cost of a given Member’s automobile allowance may be wholly or partially offset in any given month by travel reimbursements not paid to the Member, if they drive for official City business in that month.
Staff plans to adjust the FY 2023 General Fund City Council Department car allowance account in a future mid-year budget adjustment, depending on the actual costs.
ALTERNATIVES:
1. Do not adopt the resolution; provide alternative direction to staff.
ATTACHMENTS:
1. Resolution enacting an Automobile Allowance Policy
1.A. Exhibit A to Resolution: Model Automobile Allowance Agreement Prepared by: Meeting Date: July 19, 2022
Erica Inderlied, City Clerk
Submitted by: Jorge Garcia, Assistant City Manager
City Manager Approval:
9.F-2Council Agenda 7-19-2022
RESOLUTION NO. R-2022-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA ENACTING AN AUTOMOBILE ALLOWANCE POLICY TO
REIMBURSE CITY COUNCIL MEMBERS AND THE MAYOR FOR ACTUAL AND
NECESSARY EXPENSES
WHEREAS, Government Code Section 1223 provides that a “ […] city officer […] may contract with the appropriate authorities for an allowance or mileage rate for the use of vehicles owned or rented and used by [the city officer] in the performance of duty, in lieu of the usual transportation charges”; and
WHEREAS, Government Code Section 36514.5 allows reimbursement of actual and necessary expenses incurred by City Council members in the performance of official duties, subject to certain requirements; and
WHEREAS, a car allowance has been determined to be an “actual and necessary expense” by some courts (ex. Citizen Advocates, Inc. v. Bd. of Supervisors, 146 Cal. App. 3d 171, 176 (1983)); and
WHEREAS, Government Code Section 36516, as interpreted in Attorney General Opinion 08-405 ((February 18, 2010), 2010 WL 6026760), “specifically provides that amounts paid by a city to reimburse a council member for actual and necessary expenses shall not be included for purposes of determining the council member’s salary”; and WHEREAS, the Council Members and Mayor of Pismo Beach incur actual and necessary expenses related to the use of vehicles they own or rent and use in the performance of official duty; and
WHEREAS, the City Council finds that adoption and payment of a car allowance in lieu of a per-mile vehicle expense reimbursement policy is less administratively burdensome on City staff; and
WHEREAS, the City Council finds that a car allowance of $100 per month is a reasonable estimation of average actual and necessary car-related expenses authorized for reimbursement under Government Code Section 36514.5.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pismo Beach as follows:
Section 1. The City Council hereby finds and determines that the foregoing recitals are true and correct and are hereby incorporated by reference.
Section 2. Each Council Member and the Mayor who chooses to execute an Automobile Allowance Agreement with the City shall be entitled to a monthly
9.F-3Council Agenda 7-19-2022
Attachment 1
car allowance of $100, to be paid at such intervals, and during such term, as provided in the Agreement (Exhibit A).
Section 3. If any section, subsection, sentence, clause, phrase or provision of this Resolution or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity of any other provision or applications, and to this end the provisions of this Resolution are declared to be severable. The City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause, phrase or provision thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or provisions thereof be declared invalid or unconstitutional.
Section 4. This Resolution shall take effect immediately upon its approval by a vote of a majority of the members of the City Council.
Section 5. This Resolution is intended to be cumulative and shall not repeal any other resolution except to the extent of an irreconcilable conflict; provided, however, this Resolution shall repeal any portion of any previously adopted expense reimbursement policy to the extent, and only to the extent, that such policy applies to reimbursement of Council members and/or the Mayor with regard to mileage reimbursement or other car-related expenses.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 19th day of July 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
9.F-4Council Agenda 7-19-2022
Attachment 1
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CITY OF PISMO BEACH
AUTOMOBILE ALLOWANCE AGREEMENT
This Automobile Allowance Agreement (“AGREEMENT”) is made and entered into as of the date the AGREEMENT is fully executed by all parties (the “Effective Date”), by and between the City of Pismo Beach, a municipal corporation (“CITY”), and Name of Council Member (“OFFICIAL”). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows:
RECITALS:
A.CITY takes its stewardship over the use of its limited public resources seriously. Periodically, the City Council has adopted ordinances, resolutions, and policies relating to expenses actually and necessarily incurred by public officials in connection with their official duties on City business. In full compliance with the state statute commonly known as AB 1234 (codified, in relevant part, at Government Code Sections 53232.2 and 53233.3), the Council has adopted a Travel/Expense Reimbursement Policy and Procedure as part of the City of Pismo Beach Purchasing Policy & Procedures Manual (“Purchasing Policy”) establishing a policy and guidelines regarding business reimbursement for City officials.
B.Council members may incur transportation expenses while discussing the community’s concerns with state and federal officials; participating in local, regional, state and national organizations whose activities affect the City; attending educational seminars designed to improve officials’ skill and information levels; attending meetings that benefit the City; and meeting with residents, members of the business community and other persons on matters important to the City.
C.Pursuant to the Purchasing Policy, vehicle mileage incurred for use of personal vehicles for official City purposes is reimbursed at IRS rates in effect at the time the expense is incurred.
Government Code Section 1223 and the Purchasing Policy provide that the Mayor and each Council Member may contract with the City for a vehicle allowance for the use of vehicles owned or rented and used by the Mayor or Council Member in the performance of official duty.
In February 2010, the state Attorney General opined that Government Code Section 1223 permits cities to provide a vehicle allowance to their City Council Members (A.G. Opinion No. 08-405 (February 18, 2010).
D.OFFICIAL would like to contract with CITY for a vehicle allowance for the use of vehicles owned, rented, and used by OFFICIAL in the performance of official duty.
AGREEMENT:
I. VEHICLE ALLOWANCE
A.CITY shall provide to OFFICIAL a monthly vehicle allowance of $100.00, payable as a lump sum on or around the 1st day of each month. Such amount is designed to reimburse OFFICIAL for all typical costs associated with OFFICIAL’s use of vehicles for City business, including but not limited to all applicable costs of vehicle acquisition, vehicle liability insurance, insurance deductibles, maintenance, operating expenses including but not limited to fuel, oil and tires, depreciation and interest, and costs associated with rental vehicles when the OFFICIAL’s vehicle is unavailable.
B.OFFICIAL shall not be eligible for reimbursement pursuant to section XI. Council Member Reimbursement Policy of the Purchasing Policy for the first 100 miles of any trip of same-day
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Attachment 1A
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or to-and-from travel that is covered by the car allowance. For purposes of the Purchasing Policy and this AGREEMENT, a trip consists of the travel to and from a destination in the performance of City business. Mileage shall be calculated from City Hall to the destination.
C.OFFICIAL shall maintain all licenses and records required by applicable California and federal law concerning use of vehicle(s).
II.TERM OF AGREEMENT
A.This AGREEMENT shall continue in full force and effect until such time that OFFICIAL no longer holds the office of City Council Member or Mayor in accordance with the provisions of applicable state laws, or until such time that OFFICIAL voluntarily chooses to terminate this AGREEMENT for any other reason. Notwithstanding the foregoing, in the event the City Council elects to eliminate the option for an automobile allowance for Council Members and Mayor, this AGREEMENT shall automatically terminate effective as of the date of such Council action.
III. GENERAL PROVISIONS
A.If any provision of this AGREEMENT is held invalid or unenforceable, the remainder of this AGREEMENT shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.
B.This AGREEMENT shall be interpreted and construed pursuant to and in accordance with the laws of the State of California and all applicable City Codes, Ordinances and Resolutions.
IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed the day and year last written below.
CITY:
City of Pismo Beach, a Municipal Corporation
Signed:
Name: James R. Lewis
Title: City Manager
Dated: ________________________________
ATTEST:
Signed:
Name: Erica Inderlied
Title: City Clerk
APPROVED AS TO FORM:
Signed:
Name: David M. Fleishman
Title: City Attorney
OFFICIAL:
Signed:
Name: Council Member or Mayor Name
Title: Council Member or Mayor
Dated: ________________________________
9.F-6Council Agenda 7-19-2022
Attachment 1A