11 CAR ALLOWANCESCITY COUNCIL AGENDA ITEM BRIEFING SHEET
Submittal Date: Originating Department: Presented By: Agenda Item No.:
2-18-2008 City Manager Kevin Carruth, Gene Anderson 11.
Council Date:
2-25-2008
RECOMMENDED MOTION:
Motion to approve the car allowances recommended by the City Manager or, alternatively, motion to
allow the City Manager to exercise the discretion authorized by the personnel policies handbook and
adopted by Resolution 2005-014.
BACKGROUND:
The 2007-08 city budget contained car allowances for certain city employees. The Council asked the new city
manager to evaluate the proposed allowances and make a recommendarion to the Council. Governmental and
non-governmental organizations realize the need for certain staff to travel outside the office on a regular basis
in the performance of their duties. Organizations typically provide typically provide this transportarion
through (1) a pool vehicle for mulriple employees to use, (2) providing a vehicle for the employee's exclusive
use, (3) reimbursement for mileage actually driven. Vehicle allowances were eliminated in the FY 2006-07
budget except for the City Manager, Police Chief, Fire Chief, and EMS Director. In evaluating the
appropriateness of Paris' vehicle allowances, three questions were examined:
1. Was a vehicle allowance or vehicle part of the employee's original job offer?
A job offer is a promise or agreement, regardless if it is actually reduced to a written contract. The City
has a duty to honor such agreements in order to maintain its integrity and credibility. Prior to the
2006-07 fiscal year, ten employees (all department heads except for one) received vehicle allowances
or a vehicle. Of these, a vehicle allowance or vehicle was part of the employee's inirial job offer for
seven of those positions.
2. Are current and proposed vehicle allowances internally equitable?
The duries of various positions require different levels of travel and should be compensated
accordingly. Although the only way to verify actual mileage driven is for the employee to maintain a
mileage log for at least 12 months. On their face, the differences in vehicle allowances appear to be
equitable. [BACKGROUND CONTINUED ON NEXT PAGE]
BOARD/COMMISSION RECOMMENDATION:
EXHIBITS:
Comparison of vehicle allowances, original and proposed; Five-year total cost of ownership tables for Canuy,
Ex lorer, F-150, Im ala, and Taurus; Generic annual vehicle cost table.
ACTION: BUDGET INFO:
❑ Financial Report ~ Minute Order Expense $61,935
❑ Department Report ❑ Resolution Budgeted Amt. $61,935
❑ Presentation ❑ Ordinance y'I'D Actual
❑ Public Hearing ❑ Other $9,500 Acct. Name Car Allowance
Acct. Number ~-0302-~-xx
FisC~. NoTES:
The addirion of an allowance for the Uriliries Director may require a year end budget amendment.
REVIEWED AND APPROVED BY:
~ Administration ~ City Clerk ❑ Community Development ❑ EMS/IT ~ Finance ❑ Fire
❑ Municipal Court ❑ Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utiliries
City of Paris Revised 2/04/08
.
. _ . _ , .
[BACKGROUND CONTINUED]
3. Are current and proposed vehicle allowances externally competitive?
A survey of the 10 peer cities Paris has traditionally used for comparisons was conducted to see if the
proposed vehicle allowances are competitive and customary. Of the nine positions previously receiving
allowances and in the survey, the proposed allowances for four of them axe below the survey average
and five are above.
It should be noted that a recommended allowance for the Utilities Director has been added. Also the expense
and budgeted numbers below are given on an annual basis to avoid confusion even though actual car
allowances for most of the employees involved will cover only 9 months of the year. It is recommended that
the allowances be granted as proposed for the 2007-08 fiscal year. This issue can be studied at length as part of
the 2008-09 budget process.
At the February 11 council meeting there was discussion of amending the personnel policy to allow the City
Manager the discrerion to grant vehicles or vehicle allowances and that such a change would have to be by
council action. Upon further review it was discovered that with the current policy (adopted February 1, 2005)
Council authorized the City Manager to "...change or amend these policies within the statutory and chartex
limitations to the extent necessary to more effecrively and efficiendy promote the interest of the Ciry."
Consequendy, if Council desires to have vehicles and/or allowances an item in the personnel policy, then the
Manager already has the authority to do so (Council would still have final say through the annual budget
process). The suggested wording would be "As a form of compensarion, Director level personnel may be
eligible for a take home vehicle or a vehicle allowance as determuied by the City Manager from time to time."
After reviewing the total cost of ownership for several vehicles (as deternuned by edmunds.com), accounting
for the payroll taxes associated with allowances, and mileage reimbursements, it is cheaper for the City to
provide the proposed vehicle allowances for all eleven positions than it would be to provide vehicles for just
seven.
`'"y r"'" Revised 2/04/08
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Annual Costs of City Purchased Vehicle
S20,000 S25,000
Description
Vehicle
Vehicle
Payments
$
7,200
$
9,000
Insurance
$
350
$
450
Fuel
$
1,500
$
1,500
Maintenance
$
400
$
400
Total
$
9,450
$
11,350
Per Mile Operational Cost
$
0.95
$
1.14
Assumptions: 3 yr. financing, 20 MPG, 10,000 miles driven
City of Paris Revised 2/20/08
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2008 Toyota Camry: Reviews & Specs
CE 4dr Sedan (2.41- 4cyl 5M) _V...iew All S_ty_les
F.
View: Pictiure...s ~ .V_.id..e.o
G9nsumer_Ratin.g s.z 111jilo ~ 44 Reviews
Summa
!'.y!
TYUe Cost to Own* S34,929 view details
Total Cash Price $18,832 v_iew_detail_s.
Average Cost per Mile* S0.47 compar_e similar_vehicles
True Cost to Own Ratings*'
o.perating_cost depre.c..iation cost
lo ~ hi lo hi
$ $ A $$S
* This is a 5-year estimate (based on 15,000 miles per year).
Ratings are determined for a specific vehicle c..ategory
Based on regional costs for zip Code: 75462 Chanqe
True Cost to Own
Depreciation
Financing
Insurance
Taxes & Fees
Fuel
Maintensnce
_
Re.pairs
Yearly Totals
T
Year 1 Year 2
$3,521 $1,851
$1,233 $998
$1,297 $1,342
$1,446 $62
$1,604 $1,652
$391 $636
$0 $0
$9,492 ;6,541
Year 3
$1,628
$744
$1,389
$64
$1,702
$538
$97
$6,162
Year 4 Year 5
$1,444 $1,295
$468 $170
$1,438 $1,459
$64 $54
$1,753 $1,806
$847 $1,362
$234 $340
#6,248 #6,486
5-yr Total
$9,739
$3,613
$6,925
$1,690
$8,517
$3,774
$671
$34,929
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2008 Chevrolet Impala: Reviews & Specs
LS 4dr Sedan (3.51- 6cyl 4A) View_All StYles
Yiew Pict<, ures.
I .Vide..o
Cp.n.s..u_..m..er_Rating 8.0 lilmilo ~J 23 Reviews
-Summa.!Y.__...
True Cost to Own• $40,420 view detaiis
Total Cash Price $21,866 .v..ie.w_._details
Average Cost per Mile` g0.54 compare_similar_yehicles
True Cost to Own Ratings**
o.pgreXing._G.ost deprec..i.ation_ co5t
lo hi lo hi
$ A $ A
* This is a 5-year estimate (based on 15,000 miles per year).
Ratings are determined for a specific vehicle cat.e.g.o. ry
Based on regional costs for Zip Code: 75462 ChBnge
True Cost to Own
Depreciation
Financing
Insur.a..nce
Taxes. &_Fe._e.s
Fuel
Maintenance
Re.pairs
Yearly Totals
Year 1
Year 2
Year 3
Year 4
Year 5
5-yr Total
$7,091
$2,214
$1,947
$1,726
$1,550
$14,528
$1,432
$1,159
$863
$544
$198
$4,196
$1,284
$1,329
$1,375
$1,424
$1,445
$6,857
$1,724
$62
$64
$64
$54
$1,968
$1,782
$1,835
$1,890
$1,947
$2,005
$9,459
$133
$477
$298
$825
$912
$2,645
$0
$0
$113
$267
$387
$767
$13,446 $7,076 ;6,550 $6,797 $6,551 $40,420
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2008 Ford Taurus: Reviews & Specs
SEL 4dr Sedan (3.51- 6cyl 6A) View_Ail Sty_les.
View• Plctures
Cgn.sum_e...r_Ra_ting 9.2 1~ ~ 24 Reviews
Summary_
True Cost to Own* $41,383 view details
Total Cash Price $23,519 _v_iew_details
Average Cost per Mile* $0.55 compare. simil_a_r_ vehi_cles
True Cost to Own Ratings'•
ope_ratin.g._c..ost d...epr.eciatio_n_cost
lo hi lo hi
$ $ A
* This is a 5-year estimate (based on 15,000 miles per year).
Ratings are determined for a specific vehicle c.a..tegory
Based on regional costs for Zip Code: 75462 Ch8f1Q@
_ True Cost to Own
_
D..epreci.ation
Financing
Insur.a_._n...c.e..
Taxes & Fees
Fuel
Maintenance
R...e.p_a.i.rs
Yearly Totals
Year 1
Year 2
Year 3
Year 4
Year 5
5-yr Total
$6,558
$2,315
$2,038
$1,806
$1,621
$14,338
$1,671
$1,352
$1,008
$634
$231
$4,896
$1,197
$1,239
$1,282
$1,327
$1,347
$6,392
$1,837
$62
$64
$64
$54
$2,081
$1,816
$1,870
$1,926
$1,984
$2,044
$9,640
$308
$530
$376
$833
$1,188
$3,235
$0
$0
$118
$278
$405
$801
$13,387 $7,368 $6,812 $6,926 $6,890 $41,383
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2008 Ford Explorer: Reviews & Specs
XLT 4dr SUV (4.01- 6Cyl 5A) View_Ali_ Sty.les
View: Pictu..res I Video
Co.n.$_umer Ra.ting 9.1 4 Reviews
Summary
True Cost to Own* a50,415 yiew„_.detaiis
Totai Cash Price $26,425 yiew_.d. etails_
Average Cost per Mile• $0.67 c_ompare._s.i_. ilar_y_ehicles
Tnie Cost to Own Ratings`*
ppe.r..ating co5t dQ.pr.eciation cost
lo hi lo hi
$ A $ i`
* This is a 5-year estimate (based on 15,000 miles per year).
Ratings are determined for a specific vehicle category
Based on regional costs for Zip Code: 75462 Chenae
True Cost to Own
Year 1
Year 2
Year 3
Year 4
Year 5
5-yr Total
D..epre_ciation
$8,491
$2,826
$2,487
$2,204
$1,978
$17,986
Financing
$1,927
$1,559
$1,162
$732
$266
$5,646
Insurance
$1,190
$1,232
$1,275
$1,319
$1,339
$6,355
Taxes.& F_e_es
$2,107
$62
$64
$64
$54
$2,351
Fuel
$2,451
$2,525
$2,601
$2,679
$2,759
$13,015
Mainten..a...n.ce
$491
$605
$769
$755
$1,600
$4,220
Repairs
$0
$0
$124
$292
$426
$842
Yeerly Totals $16,657 #8,809 $8,482 ;8,045 ;8,422 $50,415
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2008 Ford F-150: Reviews & Specs
XL 2dr Regular Cab Styleside 6.5 ft. 5B (4.2L 6cyl 5M) v_iew_All_S.
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Cg..nSu_mer_Rdkin_g 9.5 4 Reviews
- Summa
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y--._.__._._.._,.__.__~_._..______.._.
True Cost to Own* S48,558 view_detai.ls
Total Cash Price $22,828 view_deta.i.is
Average Cost per Mile* $0.65 compare sim.ila_r_vehicles
True Cost to Own Ratings"*
operating__co.st depreciation_cost
lo hi lo hi
$ . $ ~
* This is a 5-year estimate (based on 15,000 miles per year).
Ratings are determined for a specific vehicle catego.r..y.
Based on regional costs for Zip Code: F75462 Ch81192
> True Cost to Own
D...epreci,a,tio. n
Finan.cing
Insurance
Taxes_&. Fees
Fuel
Maintenance
R.epairs
Yearly Totals
Year 1
Year 2
Year 3
Year 4
Year 5
5-yr Total
$8,720
$2,046
$1,800
$1,595
$1,432
$15,593
$1,692
$1,369
$1,020
$642
$234
$4,957
$1,394
$1,443
$1,493
$1,546
$1,569
$7,445
$1,859
$62
$64
$64
$54
$2,103
$2,525
$2,601
$2,679
$2,759
$2,842
$13,406
$464
$584
$751
$806
$1,607
$4,212
$0
$0
$124
$292
$426
$842
$16,654
$8,305
$7,931
;7,704
$8,164
$48,558
1
1
True Cost to Own ratings at Edmunds
Page 1 of 3
Close Window
s
~
True Cost to OwnSM (TCO)
About True Cost to OwnSM
Edmunds.com's True Cost to OwnSM is a proprietary tool that helps you estimate the total five-year cost of buying and owning
a vehicle - including some items you may not have taken into consideration. A benefit of using this tool is that you can easily
compare the five-year totals for different vehicles and make a more informed choice.
The costs that we estimate include depreciation, interest on financing, taxes and fees, insurance premiums, fuel, maintenance
and repairs. In order to estimate certain mileage-dependent costs, we assume that vehicles have been driven an average of
15,000 miles per year. For used vehicles, we calculate mileage using the nominal difference between the current calendar
year and the vehicle's model year.
Note that TCO is a comparative tool, not a predictive tool - your actual five-year cost of owning a particular vehicle will vary
depending on your personal circumstances, such as your driving history and the number of miles you drive.
How We Calculate True Cost to OwnSM
The True Cost to OwnSM calculations use the following set of assumptions:
• Ownership expenses are considered over a five-year time span
• You will drive an average of 15,000 miles per year
• You are financing the vehicle using traditional financing, not lease financing
• You are in the Gold credit tier for the purpose of determining your finance rate
• You are putting a 10% down payment on the vehicle at purchase
• Your retail contract term is 60 months
• You represent the average demographic for insurance rate consideration
Using proprietary formulas, we calculate the five-year costs for the seven cost categories that make up the TCO
(depreciation, insurance, flnancing, taxes & fees, fuel, maintenance and repairs). We take into account widely avaifable
manufacturer to customer cash rebates on new cars, which may result in a lower net cost of ownership. However, we do not
account for other types of cash rebates or incentives due to the variability in the offers as well as the eligibiliry rules for such
offers.
Explanation of True Cost to OwnSM Terms
Depreciation
This is the amount by which the value of a vehicle declines from its purchase price. The purchase price employed for new
cars is the vehicle's True Market ValueoD price in your state (including typical equipment and destination charge). The
purchase price employed for used cars is the vehicle's Private Party True Market Values price in your state. The resale value
assumes the vehicle will be in "clean" condition, will be driven an average of 15,000 miles per year, and will be sold to a
private party. Close window
Insurance
This is the estimated average annual insurance premium being charged by insurers in your state. The premium has been
determined based on annual premium data for defined driver profiles and coverages (liability, comprehensive and collision)
from the four largest insurers in each state (except Massachusetts, which is based on premium data from one large insurer).
While this information is specific to vehicle make, model, model year and body type, your personal information is not taken
llltn•//-unanxu arim»rul~_~•~rrx/~nr.~/.,tnl7l~n~,+ ;cr. , . . . _ 1 1.<I ca_inAOac>
True Cost to Own ratings at Edmunds
Page 2 of 3
into consideration and could greatly alter the actual premium quoted by an insurer. Factors that will affect your rate include
your age, marital status, credit history, driving record, and the garaging address of your vehicle. Close window
Financing
This is the interest expense on a loan in the amount of the True Market Value@ purchase price (including typical equipment)
plus the destination charge (for new cars) and the base sales tax and initial fees for your state, assuming a 10% down
payment and a loan term of 60 months. The interest rate used is the prevailing rate that banks and other direct automotive
lenders are charging consumers in your geographic region who are in the Gold credit tier (which encompasses the majority of
the car-buying population) of the Edmunds.com Finance Rate Estimator.
Note: Even if you do not finance your vehicle, the inclusion of financing cost in determining True Cost to OwnSM is still
appropriate because it reflects the "opportunity cosY" of the return you could have made if you had invested the Purchase
Price elsewhere. Close window
_
Taxes & Fees
Sometimes referred to as DMV fees, this consists of the base sales taxes, license and registration fees in your state, and gas
guzzler tax if applicable. These taxes and fees are frequently based on a percentage of the purchase price, and generally
decrease as the vehicle ages and loses its value. Note that the average state sales tax that we use includes local and county
taxes. Close Window
Fuel
This expense is based on EPA mileage figures, assuming consumption consists of finro-thirds highway and one-third city
driving, and that the vehicle has an automatic transmission unless automatic is not available. Cost estimates are based on
self-service prices, using an average mix of two-thirds regular grade and one-third mid-grade gasoline; premium gasoline for
vehicles whose manufacturers recommend premium grade; or diesel fuel for diesel models. Close window
Maintenance
This is the estimated expense of two types of maintenance: scheduled and unscheduled. Scheduled maintenance is the
performance of factory-recommended items at periodic mileage and/or calendar intervals. Unscheduled maintenance includes
wheel alignment and the replacement of items such as the battery, brakes, headlamps, hoses, exhaust system parts,
taillighUturn signal bulbs, tires and wiper blades/inserts. Estimated tire replacement costs are supplied to Edmunds.com by
The Tire Rack, Inc. Close_window
Repairs
This is the estimated expense for repairs not covered by the vehicle manufacturer's warranties over the five years from the
date of purchase, assuming an average of 15,000 miles are driven annually. This expense is based on the cost of a typical
"zero deductible" extended warranty for the vehicle, minus the estimated amount of that cost that consists of the warranty
provider's overhead and proflt. Close wi.n...d.o...w
Total Cash Price
For new vehicles, the Total Cash Price shown is the vehicle's True Market ValueO (TMV) price plus typically equipped
options, destination charge, base tax and fees for the state, and, if applicable, guzzler tax; less any widely available
manufacturer-to-customer cash rebates. For used vehicles, the Total Cash Price shown is the sum of the vehicle's Private
Parry TMV2) price in "clean" condition, typically equipped options, and base tax and fees for the state. Close window
Explanation of True Cost to OwnSM Ratings
Operating cost
These are the ongoing "out of pockeY" costs associated with owning and operating a new vehicle: Financing, Insurance,
Taxes & Fees, Fuel, Maintenance, and Repairs. This rating displays the vehicle's relative ranking in terms of operating costs
when compared to the other vehicles in its category. Ciose_wind_ow
Depreciation cost
This is the amount by which the value of a vehicle declines from its purchase price as defined by its Edmunds.com True
Market Value@ price. This rating displays the vehicle's relative ranking in terms of depreciation percentage when compared to
the other vehicles in its category. Close win.dow
Category
Edmunds.com uses 31 vehicle categories. Ciose_wi_ndow
Minivan
Coupe under $20K Sedan under $15K
llttn•//wwvv P.t1milruiS T 11 /1 0 /-lp"
True Cost to Own ratings at Edmunds
Van
SUV under $25K
SUV under $35K
SUV under $45K
SUV over $45K
Wagon under $15K
Wagon under $20K
Wagon under $30K
Wagon under $40K
Wagon over $40K
Coupe under $30K
Coupe under $40K
Coupe under $60K
Coupe over $60K
Convertible under $25K
Convertible under $35K
Convertible under $45K
Convertible under $60K
Convertible over $60K
Page 3 of 3
Sedan under $20K
Sedan under $25K
Sedan under$30K
Sedan under $35K
Sedan under $45K
Sedan under $60K
Sedan over $60K
Compact Truck
Large Truck
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