MARCH 12, 2005 BUDGET POLICY ISSUE – CITY COUNCIL BUDGET MARCH 12, 2005 BUDGET POLICY ISSUE – CITY COUNCIL BUDGET

TO: HONORABLE MAYOR AND COUNCILMEMBERS

FROM: CITY MANAGER

DATE: MARCH 12, 2005

SUBJECT: BUDGET POLICY ISSUE – CITY COUNCIL BUDGET

RECOMMENDATION

Consider minor budget revisions to reflect current activities of the City Council.

BACKGROUND

Meetings and Conferences

For many years (at least back to the FY 1999 budget) the City Council has budgeted $4,500 for each Councilmember for travel, training and conference expenses. This budget expressly excludes automobile/mileage reimbursement for local travel but allows reimbursement for extended automobile travel, which is a round trip of fifty miles or more. (Other forms of travel, such as taxi cabs, airfare or rental cars, also may be reimbursed under this category.) In addition to the allocation for each Councilmember, an additional allocation of about $2,500 was included in a discretionary pool to be used for extraordinary expenses related to special City-related business or assignments to statewide committees, with prior Council authorization. There is no record that the total budget for attendance at meetings and conferences has ever been exceeded, although individual Council members have occasionally exceeded their individual allocation with City Council authorization.

Automobile Reimbursement

In fiscal year 1991-92, the City Council established a monthly automobile allowance of $150 for each City Councilmember, because the City of Rancho Palos Verdes does not provide automobiles for use by Members of the City Council while they are on City business. This flat amount was chosen instead of reimbursement accompanied by reports of the mileage spent on local travel (with a round trip of less than 25 miles), because the City Council found that each Council Member was routinely incurring actual and necessary use of his or her automobile in an amount exceeding $150 per month in connection with the performance of his or her official duties as a Member of the City Council.

In fiscal year 1997-98, the automobile allowance for the Mayor was increased to $300 per month, because of the Mayor’s additional responsibilities and travel to local events in representing the City at official functions on the Peninsula and in the South Bay area.

Due to the ever increasing cost to maintain an automobile and the increased cost of gasoline, effective July 1, 2000, the Mayor’s automobile allowance was increased to $350 per month, and the automobile allowance for each Council Member was increased to $200 per month.

DISCUSSION

Meetings and Conferences

The Council Meeting and Conferences budget has not been increased for many years, nor has it been analyzed to determine if it reflects the Council’s current needs. At their February 1, 2005 meeting, the Council suggested that staff present a schedule of anticipated meetings and conferences for the next fiscal year and that each Council member determine his requirements for funding for the year. The list of potential training opportunities and travel for statewide committee assignments is attached.

Reimbursement for Automobile Usage

In the nearly five years that have passed since the most recent automobile allowances were established, the costs of owning and operating an automobile have increased significantly, as have the number of local activities and functions attended by City Council members on behalf of the City.

According to the American Automobile Association, the cost per mile of owning and operating a mid-size current model American car with popular options was $0.491 per mile in 2000. In 2004, the cost of owning and operating a similar vehicle was $0.562 per mile. Data for the year 2005 is not yet available. Based on this information, a 14.5% increase in the expense allowance for a Councilmember appears to be justified. The updated Mayor monthly reimbursement for local automobile usage would calculate at $400 per month, and the updated monthly Council member automobile reimbursement would calculate at $230 per month.

The City Council may adopt a resolution increasing the automobile allowance for the Mayor and Council Members, if the City Council finds that the monthly automobile-related costs incurred by the Mayor and the Members of the City Council exceed these amounts, so that the Mayor and Council Members will be reimbursed for the actual and necessary expenses that they incur when they use their automobiles in local trips in connection with the performance of their official duties.

Alternatives

1. The City Council could require reimbursement for monthly automobile usage be supported by monthly mileage reports instead of using a flat automobile allowance.

2. The Government Code allows the City Council to be paid a monthly salary and

establishes the maximum monthly salary for council members in a city with our population at $400 per month (Government Code Section 36516). The adoption of a Council salary allows for compensation of Council Members without making the finding that is required in connection with the approval of a flat expense allowances. The City Council could adopt an ordinance establishing a salary of $400 per month, which would become effective after the next Municipal election in November 2005.

Respectfully submitted:

Les Evans

City Manager

Attachment: Fiscal Year 2006 Meeting and Conference Schedule