HomeMy WebLinkAbout2005-04-05; City Council; 18052; Cell Phone Cost Reimbursement Council MembersCITY OF CARLSBAD - AGENDA BILL IO
AB# 18,052
MTG. 4/5/05
DEPT. CA
- TITLE: DEPT. HD.
CELL PHONE COST REIMBURSEMENT
FOR CITY COUNCIL MEMBERS
CITY Am.
CITYMGR. a
RECOMMENDED ACTION:
Adopt Resolution No.
members of the City Council.
2005-097 authorizing reimbursement for cell phone usage by
Taxable as income?
Records subject to public
information request?
ITEM EXPLANATION:
City Council members may be reimbursed for actual and necessary expenses incurred in the
performance of their duties under Government Code section 36514.5. Cell phones have
become an important communication device used by the City to improve the delivery of both
day-to-day and emergency services. For many departments, cell phones have become the
primary means of communication with field personnel, and contractors working in remote
locations.
City Phone Allowance Reimbursement
No Yes No
Yes Maybe Only those portions being
reimbursed
Currently the City pays the cost of cell phone usage by reimbursing City Council members
that use their personal cell phones in connection with the performance of their official duties.
Ease of administration to City
Ease of administration to user
Many cities have found that the proper reimbursement for elected officials is difficult due to
the often complex calling-plan features. Proration of fixed charges, taxes and service
features complicate the reimbursement process. Therefore, cities have searched for better
ways to manage the need for use of personal cell phones for elected officials in performing
their official duties.
Moderate Easy Difficult
Easy to Easv to Difficult
There are basically three ways that cities have found to reimburse cell phone usage by city
council members:
1. City Phone - Issue a phone to a City Council member and reimburse the member for
costs associated with the performance of official duties. Any personal use is reimbursed
by the Council Member to the City.
2. Allowance - Pay a monthly allowance which is an estimate of the actual expenses in the
performance of official duties.
3. Reimbursement - Reimburse for actual costs for cell phone usage in the performance of
official duties.
Each of the reimbursement methods has characteristics that are important to consider when
selecting a manner of reimbursement. These characteristics are outlined in the following table
and discussed further below:
I Moderate I Moderate I
PAGE 2 OF AGENDA BILL NO. 18,052
Tax Consequences:
If the City provides an allowance for cell phones, then the amount of the allowance will be
taxed as income to the Council Member in the year paid. The amount of the allowance will
approximate the reasonable and necessary business expense of the City Council Member in
conducting their public affairs. The reimbursement (and any reimbursement use greater than
the allowance) may be deductible for income tax purposes depending on the amount of
business use and the individual’s personal tax situation. The deduction would be taken on the
individual’s annual income tax returns.
Public Information Requests:
Records for City equipment use (such as a cell phone) are considered public information.
Also, the documentation to support the payment of City funds (in the case of a reimbursement)
is a public record. Under the allowance method, the phone records may be subject to the
California Public Records Act for those portions of the actual expenses that support the
allowance.
Ease of Administration:
Purchasing a cell phone by the City requires approvals and documentation similar to any other
purchase. Also, when the City owns the phone, the phone bills must be reviewed, approved
and paid monthly. In addition, Council Members are not allowed to have the City pay for any
personal use of their cell phone; the requirement to document that personal use creates an
administrative burden for both parties. This makes the administration of City-owned cell
phones more cumbersome than an allowance.
For the user, the most time-consuming method is the reimbursement method, as the Council
Member must document the calls in the performance of the public’s work and prepare the
paperwork to submit for reimbursement. In addition, the same review, approval and payment
process as is used for City-owned cell phones is followed for reimbursements.
In contrast, the allowance method is easier to administer. An allowance would be set up one-
time and then paid through the standard payroll processing. The process does not require
any extra effort it is once set up.
Exhibit 2 shows how other San Diego County cities are paying for cell phone usage by their
Council Members.
Alternatives:
Based on the above information, the City Council may elect to do nothing, provide cell phones
to Council Members only for use in the performance of their official duties, or provide a
monthly allowance to City Council Members which represents an allowance for the actual and
necessary costs in the performance of their official duties.
Option I - Do nothing:
Under this option, there would be no change in the City’s existing policies.
PAGE 3 OF AGENDA BILL NO. 18,052
Option 2 - Provide City funded cell phones to Council Members:
Under this option, the City would purchase and pay for City-funded cell phones for each
Council Member. The phones would be public property and would only be used in the
performance of the public’s business.
Option 3 - Provide a monthly cell phone reimbursement to Council Members:
Under this option, the Council would receive reimbursement on a monthly basis that
represents the actual and necessary costs in the performance of the duties of their office. For
tax purposes, the value of this monthly allowance would be reported as income to the IRS on
the annual W-2 statement.
Attached to this agenda bill is a resolution implementing Option 3. If the Council wishes to
proceed otherwise, it should discuss Options 1, 2 or any other options not identified herein.
FISCAL IMPACT:
The fiscal impact will depend on the reimbursement method chosen. If an allowance were
given to the City Council based on the above analysis, the total annual fiscal impact would be
$2,700. This allowance is consistent with the amounts currently being paid by the City for
business use of cell phones.
EXHIBITS :
1. Resolution No. 2005-097 authorizing the payment of an allowance for cell
phone use for city Council Members.
2. Cell Phone Survey, San Diego County
3. Cell Phone Allowance Survey
DEPARTMENT CONTACT: Kevin Branca (760) 602-2430, kbran@ci.carlsbad.ca.us
RESOLUTION NO. 2005-097
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, REIMBURSING THE MAYOR AND
COUNCIL MEMBERS ON A MONTHLY BASIS FOR ACTUAL
COSTS IN THE PERFORMANCE OF THE OFFICIAL DUTIES
OF THEIR OFFICES
WHEREAS, cell phones have become an important communication
device used by the City to improve the delivery of both day-to-day and emergency
services; and
WHEREAS, the City has provided a limited number of cell phones to City
Council members to conduct the official duties of their office, however, that has not
been efficient, productive or frequently used; and
WHEREAS, reimbursement to City Council members for the actual and
necessary expenses in the performance of their duties exceeds the monthly allowance
stated herein; and
WHEREAS, the ease of administration and the certainty of amount is a
reasonable and proper expenditure of public funds; and
WHEREAS, members of the City Council often need the use of a cell
phone in conducting the affairs of their office at all times of the day and night,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That members of the City Council shall be reimbursed for cell phone
usage for their actual and necessary costs in the performance of their official duties at
the rate of $45 per month to be paid bi-weekly each pay period and to be included as
the employee’s compensation for tax purposes.
3. That this resolution shall apply only to those Council memben mat
have cell phones.
4. That each Council member will be responsible for the purchase of tf%
cell phone and related equipment and for the payment of their monthly cell phone bill.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council of the City of Carlsbad held on the 5th day of APRIL , 2005 by
the following vote, to wit:
AYES: Council Members Lewis, Hall, Kulchin, Packard, Sigaf oose
NOES: None
ABSENT: None
ATTEST:
LORRAINE M. WOm, City Clerk
(SEAL)
7606023553
No Yes
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J
J
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FINANCE DEPT CITY OF CARLSBAD 09:17:54 a.m. 03-13-2005
Comments:
Does not provide phone nor have an allowance
Does not provide phone nor have an allowance
Does not provide phone nor have an allowance
City provides phone via city plan; however only 1
member of council uses it. Most have thelr own and do
not utilize the city plan.
City provides them via city plan and pays the monthly
bill.
City provides them via city plan and pays the monthly
bill.
2 I3
J
J Lemon Grove I
City provides them via civxn and pays the monthiy-
Does not provide phone nor have an allowance
Mayor receives $35 reimbursement for use of cell
phone.
City provides them via city plan and pays the monthly
3 bill.
J bill.
1 Poway
3
3
Vista
City provides $50 allowance to members for phone use
If Council wanted a phone Clty would purchase one for
their use; currently they all use their own.
City provides phone vla Clty paid plan. Although most
members do not use it. Mostpurchase thelr own and
use their own due to the freedom of information act.
Does not provide phone nor have an allowance as a
rule; however, if member doesn't utilize all of the auto
allowance $300, then can apply remaining allowance to
other expenses.
Does not provide phone nor have an allowance
J
J
CELL PHONE SURVEY
SAN DlEGO COUNTY
J I Does not provide phone nor have an allowance I J ICity provides a $30 allowance for cell phone.
Exhiblt 2
7606028553 FINANCE DEPT CITY OF CARLSBAD 09:18:10 a.m. 03-18-2005
c
CELL PHONE ALLOWANCE SURVEY Exhibit 3
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