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2010120609 - Town Council and Board Member expense reimbursement policy�i WN of MEETING DATE: 12 -06 -10 ITEM NO: �0s'A o5 COUNCIL /AGENCY AGENDA REPORT DATE: DECEMBER 2, 2010 TO: MAYOR AND TOWN COUNCIL/ CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR SUBJECT: RESCIND RESOLUTION NO. 1987 -112 AND ADOPT TOWN COUNCIL AND BOARD MEMBER EXPENSE REIMBURSEMENT POLICY RECOMMENDATION Rescind Resolution No. 1987 -112 and adopt Town Council and Board Member Expense Reimbursement Policy. BACKGROUND The Town's existing expense reimbursement policy has been in place since 1987 (Attachment 1). While the policy addresses many of the requirements included in the League of California Cities' model expense policy published pursuant to the requirements of AB 1234, the Council Policy Committee (Committee) requested to review the policy to determine what updates and /or additions were necessary to reflect AB 1234 requirements and current best practices. DISCUSSION The Policy To facilitate the discussion about the Council's reimbursement policy, staff provided the Committee with the League of California Cities' model policy and several policies from other cities for comparison: In addition to meeting requirements and best practices, the Committee requested that the Council policy address reimbursement guidelines regarding expenses related to local non - profit, charitable and /or community events. Based on the Committee's initial discussion following review of these documents, staff developed a draft policy for Committee consideration. Over the course of several meetings, the PREPARED BY : PAMELA JACOBS c, ASSISTANT TOWN MANAGER Reviewed by: Assistant Town Manager /Deputy Director Town - Attorney /General Counsel Clerk Administrator/Secretary Finance Community Development PAGE 2 MAYOR AND TOWN COUNCIL /CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: RESCIND RESOLUTION NO. 1987 -112 AND ADOPT TOWN COUNCIL AND BOARD MEMBER EXPENSE REIMBURSEMENT POLICY December 2, 2010 Committee refined the original draft policy to the attached final policy recommended for Council consideration (Attachment 2). This policy applies to the Mayor and members of the Town Council and members of the Town's boards and commissions. A separate and similar policy applicable to Town employees will be approved by the Town Manager as an administrative action, The policy is consistent with AB 1234 requirements, updates provisions to reflect current aspects of travel (e.g., mileage and per diem rates, Internet costs, etc), and clarifies the types of activities for which reimbursements are authorized. A new provision in the recommended policy is the requirement for reporting to the governing board following travel and /or expenditures for which the official is reimbursed. This will require the official to briefly report on meetings, conferences, or other events that were attended at the Town's expense. Town Council Expense Budget and Allocation Approach The Committee also requested information about the Council's budget for meetings, events, training and travel, and also requested to discuss alternatives for allocation of funds for Council - related expenditures. The relative portion of the Council's budget for FY 2010/11 is as follows: Meetings and events $3,500.00 Travel and training $6,200.00 With regard to "meetings and events, this account is used to cover expenses related to Council meetings, receptions, retreats and similar activities. Typically, more than half of these fiends are expended for the entire or official Council purposes (including participation in events related to official committee appointments, such as the Cities Association), with the remaining funds expended for individual Council member authorized activities. With regard to "travel and training," the majority of this appropriation is typically expended for attendance at League of California Cities activities, some of which are associated with League committee participation. To ensure sufficient funding for full - Council events, activities associated with official appointments, and equitable- access for authorized individual Council activities, staff recommends that these issues be addressed as part of the annual budget development process. At that time, staff will identify the amount of funds required for meetings, events, training and travel for the entire Council and official appointment purposes. In addition, staff will recommend an amount that to be allocated among Council members for authorized individual activities. This recommended allocation will identify a larger proportion for the current Mayor (or Mayoral activities in the event the Vice Mayor or Council member substitutes for the Mayor) in recognition of the greater number of activities in which the Mayor PAGE 3 MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: RESCIND RESOLUTION NO. 1987 -112 AND ADOPT TOWN COUNCIL AND BOARD MEMBER EXPENSE REIMBURSEMENT POLICY December 2, 2010 is expected to participate. The remaining funds for individual activities will be allocated equally among the remaining Council members. This will provide all Council members, including the Mayor, awareness of the funds available to them for participation in authorized events. Because different needs and opportunities may arise during the course of a year and /or individual Council members may require less or more funds to participate i.n events, the Town Manager will advise the Mayor if changes to the allocation are needed. CONCLUSION The Policy Committee is recommending the approval of the Town Council and Board Member Expense Reimbursement Policy to be consistent with the requirements of AB 1234 and best practices and to fulther clarify the types of activities that are authorized for reimbursement. Staff recommends that the annual budget development process address Council expenses as discussed above, including specifying the allocation of funds for authorized individual activities. ENVIRONMENTAL ASSESSMENT Is not a project defined under CEQA, and no further action is required. FISCAL IMPACT Adopting the reimbursement policy will not have a direct fiscal impact on the Town. Expenses for the purposes covered by the policy are available in the operating budget on an ongoing basis. Attachments: 1. Existing Town Policy on Reimbursement of Expenses Incurred in Attendance at Governmental Business Functions, including Resolution 1987 -112 2. Recommended Town Council and Board Member Expense Reimbursement Policy A D M 1 11 1 S T R A T I V E MANUAL T -0WN OF LOS GAT0S Tubjecti age: action um er. REIMBURSEMENT OF EXPENSES INCURRED IN ATTENDANCE AT GOVERNMENTAL BUSINESS FUNCTIONS. 1 of 1 Approved: Ef f ective ate: evised ate: U • �wa�T.�� 3/25/87 PUR.POSE To 'set forth policies and p rocedures •for an advance of .funds for attendance at approved governmental business functions, and reimbursement of reasonable expenses incurred in such attendance. SCOPE This policy applies to elective officers, officers, members of boards and commissions, and employees of the Town ( "employee "). POLICY Requests for advance of funds and claim for reimbursement shall be in written form approved by the Town Manager. Sufficient documentation to support such requests or claim shall be provided. PRnf: MIRFs Advance of Funds Advances of estimated reimbursable costs shall be requested by the department head and approved by the Town Manager. These costs shall approximate the out -of- pocket expenses to be incurred by the employee. Claim for Reimburse All expenses other than automobile related shall be reimbursed at the actual cost thereof. Please refer to Resolution No. 1987 -16 for reimbursement of private automobile transportation. Within thirty (30) - days after the costs have been incurred, a written claim for reimbursement shall be submitted for all expenses. Documentation can. be in the form of invoice, cancelled check, meeting notice or flyer, a brief explanation of the expense, or other documentation accepted by. the. Town Manager. Daily meal allowance shall not exceed thirty -five dollars ($35) per day. A claim for reimbursement for which an advance was received shall be accompanied by a refund of the unexpended balance. In the case of a clam which exceeds the advance, additional payment will be made to the employee. ADMIN PMANU /CABLE 03/25/87 Approved'as to form: T Own o Y ATTACHMENT 1 P. RESOLUTION NO. 1987 -112 A RESOLUTION AUTHORIZING ATTENDANCE AT GOVERNMENTAL BUSINESS FUNCTIONS AND PROVIDING FOR REIMBURSEMENT OF REASONABLE EXPENSES INCURRED IN SUCH ATTENDANCE BE 'IT RESOLVED, AND IT IS HEREBY RESOLVED by the Town Council of the Town of Los Gatos, County of Santa Clara', State of California, that Resolution No. 1987 -16 entitled, "A RESOLUTION AUTHORIZING ATTENDANCE AT GOVERNMENTAL BUSINESS FUNCTIONS AND PROVIDING FOR REIMBURSEMENT OF REASO'NABLii EXPENSES INCURRED IN SUCH ATTENDANCE ", is hereby repealed. BE IT FURTHER RESOLVED that the following regulations shall govern the attendance upon business of the Town of Los Gatos and. the reimbursement of expenses incurred as a result of such attendance. I Section 1. Authorization Subject to the conditions and limitations contained herein, elective and appointive officers and employees of the Town are authorized to attend conferences, seminars, technical or professional governmental meetings, luncheons, banquets and other functi.ons concerning the governmental business of the Town of Los Gatos the scope of position responsibility of the person attending, and to be reimbursed for the actual necessary and reasonable expenses incurred as a result of such attendance. Section 2. Advance Approval' Such expenses shall not be reimbursed unless the amount thereof is included in budget appropriation in advance of the date the expense is incurred. When attendance by any officer or employee of the Town other than elective officers and members of boards and commissions appointed by the Town Council at conferences, conventions, meetings, or other business of the Town located outside of Santa Clara County necessitates'an overnight stay or.longer•at the destination, permission shall be given in advance by the Town Manager. Section 3. Amount of Reimbursement All expenses other than that of private automobile transportation incurred as a result of an officer's or employee's attendance upon Town business shall be reimbursed at the actual cost thereof. Costs associated with the attendance of a family member of any officer or employee are not.eligible for reimbursement. The cost of private automobile transportation shall be reimbursed at the rate of $.24 cents per mile for round. 'trip mileage by the most direct route, provided that reimbursement for transportation expenses by private automobile on trips which exceed five hundred (500) miles round trip_ shall not be greater than the equivalent lowest cost of round trip air fare if air service is provided from the City of San Jose to the destination (or from any Bay Area airport for out -of -State destinations). Air fare shall be allowed at the lowest cost available at the time of submittal of a request for "advance of expenses" or at the time of registration at a governmental business function. Employees receiving monthly car allowance will be eligible for reimbursement on the use of a private automobile as stated above only when a trip exceeds one hundred (100') miles in round trip. Section 4. Submission of Claims Written claims for reimbursement shall be submitted to the Office of the Town Manager. All persons shall submit itemized claims on forms supplied by the Town Manager no later than thirty (30) days after the costs have been incurred.. Receipts or other documentation shall be submitted for the following types of expenses: 1.. Transportation, including taxi 2. Automobile rental; 3. Parking fees.and bridge tolls; 4. Lodging; S. Meals; 6. Conference, convention or other 7.' Other necessary and reasonable and airport limousine fare; registration fees; and expenses. . Registration fees and other prepaid expenses shall be paid at the earliest possible date to take advantage of early payment discounts. If meals are included in any registration fee, claim for reimbursement shall not be made for such meals separately. The total charges for purchased meal.s shall not exceed thirty -five dollars ($35) per day. The of receipts or other documentation submitted in support of claims expenses shall be at the discretion.of the Town Manager. Section 5. Advances of Expenses Advances of estimated reimbursable costs shall be granted upon written application to the Town Manager. -All such applications other than those by elective officers shall be approved in advance by the Town Manager. Claims for the actual and necessary expenses incurred shall be filed with the Town Manager in the same manner as specified above, but not later than thirty (30) days after the conclusion of the event attended, and such claims shall be accompanied by any unexpended balance of the amount advanced. -2- PASSED AND ADOPTED at a regular meeting of the Town Council of the i Town of Los Gatos, California,' held on the 17th day-of August 1987 by the following vote. AYES: •COUNCIL MEMBERS Joanne Benjamin, Eric Carlson. & i Mayor Brent Ventura NOES: COUNCIL MEMBERS Robert Hamilton ABSTAIN: COUNCIL MEMBERS ,None ABSENT COUNCIL MEMBERS Thomas Ferrito SIGNED: MAYOR. HE OW OF LOS GATOS ATTEST: -3- ADMINISTRATIVE MANUAL TOWN OF LOS GATOS Subject: Town Council and Board Page: Member Expense Reimbursement Policy Section Number: Approved: Effective Date: Revised'Date: A. PURPOSE 1. Los Gatos takes its stewardship over the use of its limited public resources seriously and is committed to the ethic that public resources should only be used when there is an identifiable benefit to the Town and the community. 2. This policy documents the parameters pursuant to which the Town will reimburse specified Town officials for actual and necessary expenses incurred in the performance of official Town duties. 3. This policy recognizes that legislative and other regional, state, and federal agency business is frequently conducted over meals and that sharing a meal with regional, state and federal officials is frequently the best opportunity for a more extensive, focused, and uninterrupted communication about the community's policy concerns. 4. This policy satisfies the requirements of Government Code sections 53232.2 and 53233.3 and supplements the definition of actual and necessary expenses for purposes of state laws relating to permissible uses of public resources. 5. This policy also applies to.any charges made to a Town credit card, cash advances or other line of credit and supplements the definition of necessary and reasonable expenses for purposes of federal and state income tax laws. B. SCOPE This policy applies to the Mayor and members of the Town Council and members of the Town's boards and commissions. It covers the expenditure of Town funds and reimbursement of expenses for authorized Town business. Expenses incurred in connection with the following types of activities generally constitute authorized expenses, as long as the other requirements of this policy are met: 1. Communicating with representatives of regional, state and national government on Town adopted policy positions; 2. Attending educational seminars designed to improve officials' skill and information levels; ATTACHMENT 2 Participating in special events held by local, regional, state and national organizations whose activities affect the Town's interests. These organizations include, but are not limited to, professional organizations for government (e.g., League of California Cities; National League of Cities; U.S. Conference of Mayors); service clubs /non- profits (e.g., Kiwanis, Rotary, Friends of the Library, Los Gatos Community Foundation); Business - related (e.g., Los Gatos Chamber of Commerce; Joint.Venture Silicon Valley); and other events of other organizations which provide service to Town residents, the region or otherwise further the stated goals of the Town Council; 4. Attending Town, county, regional and interagency events; 5. Implementing a Town - approved strategy for attracting or retaining businesses to the Town through activities that will typically involve at least one staff member. C. APPLICATION This policy applies to the members of the Town Council and members of all the Town's boards and commissions. D. AUTHORIZED EXPENSES Transportation The most economical mode and class of transportation reasonably consistent with scheduling needs and cargo space requirements must be used, using the most direct and time - efficient route. Government and group rates must be used when available. (a) Airfare. Airfares that are equal or less than those available through the Enhanced Local Government Airfare Program offered through the League of California Cities, the California State Association of Counties and the State of California are presumed to be the most economical and reasonable for purposes of reimbursement under this policy. The charge for the first piece of personal baggage may be reimbursed under this policy. (b) Automobile. Town Council receives a nominal, auto allowance of $50 per month, which generally covers local mileage costs. Council members may receive reimbursement for authorized travel in a personal vehicle beyond a one -way fifty (50) mile radius of Los Gatos, or beginning destination, whichever is closer to the ending destination. Reimbursement is for miles in excess of the fifty -mile radius, and therefore does not include the first fifty miles each way. Automobile mileage is reimbursed at Internal Revenue Service rates presently in effect (see ' www.iis.gov ). For 2010, the rate is 49.5 cents per mile. These rates are designed to compensate the driver for gasoline, insurance, maintenance, and other expenses associated with operating the vehicle. This amount does not include bridge and road tolls, which are also reimbursable. : Reimbursement for mileage will be limited to the lesser of the value of mileage costs or the least expensive cost of air transportation available at least 30 days prior to travel. (c) Car Rental. Rental rates that are equal or less than those available through the 2 State of California's website ( http:// www .catravelsmart.coni /defaLilt.htm) shall be considered the most economical and reasonable for purposes of reimbursement under this policy. (d) Taxis /Shuttles.. Taxis or shuttles fares may be reimbursed, including a 15 percent gratuity per fare, when the cost of such fares is equal or less than the cost of car rentals, gasoline and parking combined, or when such transportation is necessary for time efficiency. Receipts are required. 2. Lodging Lodging expenses will be reimbursed or paid for when travel on official Town business reasonably requires an overnight stay. (a) Conferences/Meetings. If such lodging is in connection with a conference, lodging . expenses must not exceed the group rate published by the conference sponsor for the meeting in question if such rates are available at the time of booking. If the group rate is not available, see (b) Other Lodging. (b) Other Lodging. Travelers must request government rates, when available. A listing of hotels offering government rates in different areas is available at http:// www. catravelsmart.com /lodguideframes.htm. Lodging rates that are equal or less to government rates are presumed to be reasonable and hence reimbursable for purposes of this policy. Meals The Town will pay the actual amount of meals and tips or per diem allowance according to IRS Publication 1542 per meal for out of town meetings, workshops, and conferences. Food/beverage purchases that are not part of a breakfast, lunch, or dinner meal (i.e. snacks, coffee) are not authorized for reimbursement and will be at the cost of the official. Travelers are expected to consume any meals provided at the conference or meetings. The per diem allowance will typically be reduced accordingly for any meals provided and included in the registration fees. The Town will not pay for alcohol /personal bar expenses. For group meal events organized by others such as conferences and other types of activities that fall within the list of "authorized expenditures" above, the Town recognizes that the per - person cost may exceed these maximums. In this event, these costs would be reimbursed. 4. Airport Parking If the official takes a personal car to the airport, long -term parking must be used for travel exceeding 24 hours. 5. Other • Baggage handling fees of up to $1 per bag and gratuities of up to 15 percent will be reimbursed. • The expense of daily Internet access will be reimbursed.. • Any questions regarding the propriety of a particular expense should be resolved by the approving authority before the expense is incurred. 6. Credit Card Use Policy Town does not issue credit cards to individual office holders but does have an agency credit card for selected Town expenses. Town office holders may use the Town's credit card for such purposes as airline tickets and hotel reservations. Receipts documenting expenses incurred on the Town credit card and compliance with this policy must be submitted within five business days of use, unless otherwise included in the expense report discussed below. Town credit cards may not be used for personal expenses, even if the official subsequently reimburses the Town. 7. Expense Report Content and Submission .Deadline All cash advance expenditures, credit card expenses and expense reimbursement requests must be submitted on an expense report form provided by the Town. This form shall include the following advisory: All expenses reported on this form must comply with the Town's policies relating to expenses and use of public resources. The information submitted on this form is `a public record. Penalties for misusing public resources and violating the Town's policies include loss of reimbursement privileges, restitution, civil and criminal penalties as well as additional income tax liability. Expense reports must document that the expense in question met the requirements of this policy. Officials must submit their expense reports within thirty (30) days of an expense being incurred, accompanied by receipts documenting each expense. Restaurant receipts, in addition to any credit card receipts, are also part of the necessary documentation. Inability to provide such documentation in a timely fashion may result in the expense being borne by the official. E. LIMITATIONS ON REIMBURSEMENTS 1. All other expenditures not expressly authorized by this policy require prior approval by the Town Council. All reimbursements shall be consistent with those allowed under state and federal law which shall prevail over interpretation of this policy, express or implied. 2. The following expenses also require prior governing body approval: (i) International travel; M (ii) Expenses which exceed the annual limits which may be established from time to time for individual categories of reimbursement through the Town's annual budget process. 93 0 5. F. Reimbursement is .expressly conditioned upon sufficient funds being budgeted as part of the annual Town budget. Excluded from Reimbursement Examples of personal expenses that the Town will not reimburse include, but are not limited to: (i) The personal portion of any trip; (ii) The charitable contribution portion of the price of admission to an event; (iii) Political events and /or fundraisers; (iv) Events benefitting religious organizations; (v) Family expenses, including partner's expenses when accompanying official on agency- related business, as well as children or pet - related expenses; (vi) Entertainment expenses, including theater, movies (either in -room or at the theater), sporting events (including gym, massage and /or golf related expenses), or other cultural events; (vii) Non- mileage personal automobile expenses, including repairs, traffic citations, insurance or gasoline; and (viii) Personal losses incurred while on Town business. (ix) Monthly service club luncheons or meetings. (x) Expenses for which Town officials receive reimbursement from another agency are not. reimbursable. The Town may promulgate administrative directives providing further interpretations or guidelines consistent with this policy. AUDITS OF EXPENSE REPORTS All expenses are subject to verification that they comply with this policy. G. REPORTS TO GOVERNING BOARDS At the next public governing body meeting following the travel and /or expenditure, each official shall briefly report on meetings, conferences or seminars, attended at Town expense. If multiple officials attended, a joint report may be made. The report may be made orally or in writing. H. C®MPLIANCE WITH LAWS Town officials should keep in mind that some expenditure may be subject to reporting under the Political Reform Act and other laws. All agency expenditures are public records subject to disclosure under the Public Records Act and other laws. 5 I. VIOLATIONS OF THIS POLICY Under state law, use of public resources or falsifying expense reports in violation of this policy may result in any or all of the following: 1) loss of reimbursement privileges, 2) a demand for restitution to the Town, 3) the agency's reporting the expenses as income to the elected official to state and federal tax authorities, 4) civil penalties of up to $1,000 per day and three times the value of the resources used, and 5) prosecution for misuse of public resources.