Agenda - Council - 05/12/1992 - Laserfiche WebLink

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DATE: TO: FROM: RE: MEMORANDUM ; MaY 8, 1992 'Personnel Committee 'city Council Ryan Schroeder, City Administrator ; City Engineer's Car Since I have been.with the City of Ramsey, on two or three occasions members of the City Council have discussed Whether or not it is appropriate for the City Engineer to have a staff car for his personal and busifiess use. Most recently, it was suggested that I place this on the agenda for discussion dufingeonsideration of the exempt pay package for 1992. For your edification, the car under discussion fs a four-door 1991 Crown Victoria with air conditioning, has logged 33,223 miles to date gnd has a retail value between $10,500 and $11,000 and a whOlesale or trade-in value of between $8,500 and $9,000. During 1991 we put 13,080 miles on the car of which 4,085 miles were personal engineering use and 724 miles were building maintenance personnel use. It should further!be noted that personal use of a City vehicle is a taxable benefit according to the IRS. I have attach~.d fo? your review the June 7, 1990 Special City Council meeting minutes during which Mayor IReimann and Councilmembers DeLuca, Pearson and Peterson authorized offering the position-of Cit~y Engineer to Steven Jankowski with the offer for employment to include an annual salary.of ~42,000, $1,000 for moving expenses or $41,200 as a salary and $1,800 for moving expenses, the authority to utilize a City vehicle for professional and personal transportation and miscel'laneous considerations. All members present at that meeting voted in favor of that motion. I havre also included the letter dated June 12, 1990 formally offering those terms, which included the tjse of a City owned vehicle, and the June 13, 1990 letter to the City Administrator from Steven Jiankowski accepting the terms of employment including the use of a City vehicle for travel to and fi-om work exclusive of long distance. It is my position that the City of Ramsey offered this City vehicle to the candidate for the position in that it wasito0king for an opportunity to provide non-monetary compensation. It is also my position that ishould this personal use of the City vehicle be removed, the incumbent could reasonably be expected to experience between a $350 and $400 per month increase in expenses which includ{s amortizing an $11,000 loan at 12% over either a four or five year term and 4,085 miles per year at 28¢ per mile in operating expenses. Further, if the City then traded off this vehicle, wec0uld~potentially receive $9,000 which, if invested at 7% in a five year note, would generate a tot~l of $10,975 or, at a four year term, would generate $10,628. Therefore, my position is as follows: 1) In order t° attract a City Engineer, the car became part of the package as an alternative to an increase in wages. 2) 3) 4) RemoVal of that car should result in a mileage allowance to the incumbent of betwe~en $350 and $400 per month. Number two above would result in an expense to the City of Ramsey well above that saved by the City or earned in resale of the car. Remo~'al of the car without a commensurate reimbursement to the incumbent is the same as a reduction in compensation and is inappropriate. It is my recommendation that there be no change from the existing condition relative to the City Engineer's cat. /CCr