Will eliminating the current flat, monthly mileage and meal allowance of $250 given to certain township employees actually generate more costs? Will it handcuff contract negotiations? Will it require the township to purchase more vehicles for employees to use?
These questions dominated the discussion on August 9, before council members finally agreed they will vote in September on a proposed policy drafted by council members Linda Geevers and Charles Morgan that would put an end to the monthly reimbursement — but not before Business Administrator Robert Hary provides necessary information.
That information will include a determination on which of the 12 positions that currently receive the reimbursement allowance should continue to receive it. That information will be provided to the council by the end of the month — in time for a vote on Tuesday, September 7.
During the August 9 meeting, the council vetted the resolution, which Hary had tweaked before the meeting. However, Hary still voiced concern for doing away with the monthly reimbursements.
First, Hary argued, the monthly allowance actually saves the township money in reimbursement costs, which would increase if a person were reimbursed at the actual IRS rate of 50 cents per mile (the current policy uses a rate of 40 cents per mile) — as proposed by the new policy. When it was suggested by council members that employees should be required to use a township vehicle already at the municipal building for work-related travel, Hary said there were not enough vehicles, and the township would need to spend money to buy more.
Further, Hary said, providing transportation is not a condition of employment. And during contract negotiations, a union might argue that the township simply provide vehicles for the employees if it does not provide a monthly reimbursement allowance.
The numbers themselves may also cause more costs, Hary added. Currently the township reimburses mileage based on a rate lower than that allowed by the IRS. “If you reimbursed per the IRS rate, which is right now 50 cents per mile, the township would actually be in the hole, if that’s what’s negotiated in the future,” he said. “If you go to 40 cents, which we currently have on the books, the township would save somewhere in the order of $5,000 a year.”
Hary said the reason for the flat reimbursement was that it is easier to predict for budgeting purposes. In addition, the 40 cents per mile that is currently used has not been increased since 2001, when the policy was implemented.
In addition, the caps proposed by Morgan and Geevers on meal allowances are above the threshold currently allowed. “The current reimbursement for conferences out of the area is $35 per day,” said Hary. “This actually would potentially drive up our costs to provide breakfast at $15, $20 for lunch, and $30 for dinner.” So Hary said he tweaked the resolution to include a limit of $50 per day, given those numbers.
When Councilman George Borek asked Hary whether he felt the resolution would hinder his ability to negotiate, Hary said no, but “negotiation is a give and take,” he said. “A concession might be less of a salary increase, or it would be a salary increase, and we would reduce it here (in the allowance). You always look at the total costs of the contract — not only the salary increase, but the benefits costs.”
Councilman Kamal Khanna seemed to be a minority in wanting to move forward with the resolution. “I personally think we’ll end up paying more,” he said. “You’re also not taking into account all of the accounting expenses you’re going to have, or the vehicles you will have to buy.”
Referring to the list of 12 people that Hary provided to council, along with their actual mileages, Geevers said there should be some people removed from the automatic mileage allowance.
Council President Diane Ciccone was adamant in abolishing the monthly allowance. “We’re talking about 12 people,” she said, adding there will be minimal impact on contract negotiations. Ciccone also said she researched the issue and found that there are no municipalities in the area that offer a monthly allowance.
Further, she said, “I don’t see an extra burden because the employees are already submitting their miles,” she said. “I think there is the argument that we will need more vehicles, but I don’t see it at this point.”
She said employees should be told to use the current municipal vehicles for travel, and a log should be kept to determine whether it is manageable to continue doing so in the future. “If we find it is unmanageable, you come back and say, ‘We need to buy more cars,’ and we have a discussion.”
“I personally think that we should have a policy that says briefly and to the point that once the contracts expire, we will no longer have an allowance,” Ciccone added. “We will go back to mileage reimbursement at the IRS rate.”
In response, Hary argued that the township only asks employees to submit mileage reimbursements twice a year for tax purposes. “If we do this on a monthly basis, there will be some added labor associated with it.”
He also said there are only about half a dozen township vehicles used for employees — and they are all being used for inspections. Vehicles would have to be purchased immediately if the resolution were to be passed, he said.
Responded Ciccone: “Have you done an analysis to show how often these vehicles are being used? If you look at these 12, some of them barely use it.”
Hary said through experience, he knows there are not enough vehicles to handle the need, and he would have to ask for vehicles in next year’s budget.”If he hasn’t done an analysis, he can’t tell me whether or not he needs it, so I would certainly not vote for it,” said Ciccone.
Responded Hary: “The six that we currently have are all field personnel, so whenever they are here, they need their vehicles to do their work, especially the employees in construction.” He said he estimated the township would need to purchase about six or seven vehicles.
Council eventually came up with a compromise — to ask Hary to go through the list of employees who generate enough mileage — or go over — the mileage covered in the $250 flat allowance. Then, they will consider retaining the allowance for those positions. A monthly allowance would also be maintained for the mayor.
“Certain people shouldn’t have that option,” Geevers proposed. “Construction officials are constantly in and out — they get a set amount.” Others should be required to use the vehicles, or be reimbursed based on mileage, she said.
A resolution will be on the agenda on September 7.
The debate over reimbursements has been ongoing for two years. In June most council members seemed to be on the same page when it comes to one idea — eliminating the current flat, monthly mileage and meal allowance of $250 given to certain township employees.
The idea to re-examine the reimbursement policy first came in 2008, when the council deliberated a 50 percent council raise from $5,000 a year to $7,500, and then a salary increase for the mayor from $17,685 to $25,000.
Proponents argued that the raises would eliminate the need for submitting reimbursement forms and dealing with questions that could be raised when it comes to determining which reimbursements are associated with the job. Opponents said that expenses legitimately accrued by council members as part of township business should be submitted and reimbursed.
Morgan argued then, however, that he submitted vouchers that still had not been paid, and controversy broke out over the legitimacy of those reimbursements. One was reimbursement for a conference call and another was reimbursement for taking Planning Board Chairman Marvin Gardner to lunch to discuss the board’s involvement in the redevelopment process.
The issue resurfaced in September, 2009, when Morgan pointed to the $250 blanket reimbursement for the mayor as a reason a clear reimbursement policy was needed. Morgan had argued that a $14 voucher for parking the mayor submitted in addition should have been included in the mayor’s $250 blanket travel reimbursement, and not approved as an additional reimbursement. The issue resurfaced again earlier this month, when Morgan questioned a claim submitted by Councilwoman Linda Geevers. Both he and Geevers had drafted their own policies in the past, but came together before the June 14 meeting to work together on a draft.
The ordinance drafted by Morgan and Geevers terminates the monthly meal and travel allowances and institutes specific standards to govern reimbursements. In addition, the proposal called for township vehicles to be used whenever possible.
