COUNCIL COMMITTEE

The Council Committee Meeting was held on October 13, 2003, at 5:45 p.m., with Council President McGlumphy presiding. Members of Council present were Mr. Carey, Mr. Pitts, Mrs. Williams, Mr. Truitt, Mr. Ritter, Mr. Speed, Mr. Salters, Mr. Ruane, and Mayor Hutchison.

AGENDA ADDITIONS/DELETIONS

Mrs. Williams moved for approval of the agenda, seconded by Mr. Carey and unanimously carried.

LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE

The Legislative, Finance, and Administration Committee met with Chairman Speed presiding. Members present were Mr. Ritter, Mr. Truitt, Mr. Gorman, and Mr. Shelton.

Hospitality and Civic Function Policy

During their Regular Meeting of August 25, 2003, Council adopted a memo dated October 30, 2000, outlining the current practice/guidelines related to expenditures that are permitted from City funds for Council members based on the benefit derived by the taxpayer, as an interim guideline for both Mayor and Council. Since that time, members have been in the process of drafting a policy. The item was deferred during their meeting of September 22, 2003 in order to allow for further discussion.

Mr. Truitt reiterated his concerns with how this policy was devised and felt that a workshop should be held so that all members understand the reasons and necessity for the various sections of the policy.

Mr. Gorman proposed the following two (2) amendments:

Referring to Page 6, Section V - Alcoholic Beverages, he suggested that the proposed paragraph be deleted and replaced with the following:

“The City shall not normally reimburse the costs of alcoholic beverages. The Mayor and Council President together may approve individual exceptions to this restriction to reimburse the costs to purchase alcoholic beverages for official guests in cases where a City employee, public official, or appointee is the official host.”

Responding to Mrs. Williams, Mr. Gorman amended his suggestion by adding the word “or” in the second sentence to read as follows, “The Mayor and/or Council President...”

Referring to Page 8, Section VI - Procedures, Mr. Gorman suggested the insertion of a new paragraph to the end of Subsection B - Payment/Reimbursement Procedures, to read as follows:

“Employees, public officials, and appointees who fail to attend approved functions or events after indicating an intent to attend, and after funds have been obligated or expended by the City shall be required to pay the associated costs for the function or event or reimburse the City for the amount spent, whichever is applicable.”

Responding to Mr. Salters, Mr. Gorman stated that his suggestion would not apply due to a sickness or emergency situations.

Mr. Gorman moved to recommend approval of the two (2) amendments, seconded by Mr. Ritter and unanimously carried.

Mr. Ritter proposed the following two (2) amendments:

Referring to Page 4, Section IV - Receptions, he suggested that the proposed paragraph be deleted and replaced with the following:

“The cost of light refreshments and the cost of certificates, awards, plaques, and/or /promotional materials presented, may be paid or reimbursed for the Annual City of Dover Reception.”

The above amendment would eliminate the reference to a non-existent section of the policy. In response to Mr. Ruane, Mr. Speed explained that since the City does not currently have a “Gifts Presented to Non-Employees and Employee Non-Cash Awards” Policy, it is suggested that the reference be eliminated. Should the City establish such a policy in the future, the Hospitality and Civic Function Policy could be amended to include the reference at that time.

Referring to Page 6, Section VI - Procedures, Mr. Ritter suggested the insertion of the following to the first sentence of Subsection B - Payment/Reimbursement Procedures:

            “Except for regularly scheduled meetings, and...”

Mr. Ritter moved to recommend approval of the two (2) amendments, seconded by Mr. Gorman and carried with Mr. Truitt voting no.

Mr. Shelton proposed the following amendment:

Referring to Page 6, Section V - Prohibited/Restricted Expenses, Mr. Shelton requested the addition of the following at the end of the “Entertainment” paragraph:

“The Mayor and Council President, together, may approve individual exceptions to this restriction to permit reimbursement of these types of costs, provided official business can and is conducted and documented. The Finance Director shall submit all “Request For Payment/Reimbursement of Hospitality Expenses” forms for entertainment related expenses to all Council members for review at least monthly.”

Responding to Mrs. Williams, Mr. Shelton agreed that the proposed amendment could read “The Mayor and/or Council...”.

In response to concerns of Mr. Salters, Mr. Speed explained that “the form to be submitted to Council for review at least monthly” would be for informational purposes, not for their approval.

Mr. Shelton moved to recommend the addition of the amendment, seconded by Mr. Ritter.

Mr. Ruane expressed concern with the above amendment, stating that it would allow entertainment expenses that, in accordance with the Travel Policy, are not acceptable for reimbursement. This type of activity and approval is what is currently happening and he felt it was one of the reasons for developing the policy. It was his feeling that the proposed amendments significantly gut the policy. Mr. Ruane also indicated concerns with the City meeting certain IRS regulations on these types of expenses, some of which have been allowed in the past. If these expenses are reimbursed by the City, they actually become someone’s remuneration and a taxable reportable item. A part of the standard that he felt the City should be attempting to develop is to prohibit these types of activities that are not truly an official business expense. He explained that business in these types of affairs are incidental, and not the main purpose of the activity.

Responding, Mr. Ritter explained that the amendment requires that members of Council receive a monthly report on such expenses. The report of these expenses will become a part of the public record, which he felt would require the individual to be prudent.

Mr. Ruane further explained that the reason for such prohibitions is due to the difficulty in determining the business benefit, either direct or indirect, of entertainment. This is the reason why generally, in these types of expenditures, they are exclusionary.

Mr. Salters agreed with previous comments that a common sense approach must be used by anyone who spends public money. He stated that if Council determined that someone was abusing this privilege, then it could be taken away.

Responding to Mr. Speed, Mr. Shelton explained that the motion requiring approval by “The Mayor and/or Council President . . .” was meant to require those requests of the Mayor to be approved by the Council President or vice versa. The requirement would be for approval to be acquired by the next authorized individual. Mr. Shelton stated that the purpose of his amendment was to allow for flexibility.

Mr. Speed requested the committee’s concurrence to develop the exact wording to present to Council that would assure coverage of those particular scenarios.

The motion to recommend the addition of the amendment, as presented by Mr. Shelton, was unanimously carried.

Mr. DePrima relayed concern with the requirement for an agenda to allow for reimbursement. It was his feeling that an agenda could serve a purpose in the conduct of a meeting, but that there were some meetings when an agenda would not, especially when there are meetings with only one (1) or two (2) individuals.

Mr. Truitt explained his confusion since there have been so many different drafts and amendments made to the proposed policy. He was not willing to endorse such a policy until there was a complete understanding among all individuals involved.

Mr. Salters shared several suggested amendments to the policy with members and asked that they be considered when developing the final policy.

Mr. Ritter moved to recommend approval of the Hospitality and Civic Function Policy as amended (Attachment #1), seconded by Mr. Shelton and carried with Mr. Truitt voting no.

Mr. Ruane suggested that when the policy was presented to Council, it should have as an attachment the specific Internal Revenue Service Regulations with regards to Meals and Entertainment. He noted that the policy indicates that its intention is to conform to the Internal Revenue Service Regulations related to entertainment expenses and associated employee compensation issues. The area of meals and entertainment seem to be the most challenging; therefore, providing the IRS Regulations would be beneficial.

Mr. Speed requested that the City Clerk include the information, as suggested by Mr. Ruane, to the Policy when it is presented to Council.

Mrs. Williams stated that IRS Policies and IRS Guidelines are very different and suggested that Council not take it upon themselves to interpret them. She stated that the level of understanding that is necessary would require legal and financial consultation.

After much discussion, Mr. Speed suggested that opinions be requested from the City Solicitor and the Finance Director as to whether or not the City is in compliance.

Revised Travel Policy

Members reviewed a revised Travel Policy for the City of Dover. The purpose of this policy is to provide guidelines under which City of Dover employees, public officials, and appointees will be reimbursed for authorized travel expenses incurred while conducting business on behalf of the City of Dover. In addition to the guidelines, specific procedures with regard to incurring and reporting travel expenses were provided.

Regarding Section D - Transportation - Common Carrier - Air Travel, Mr. Salters and Mrs. Williams suggested eliminating any restrictions as to where travel arrangements could be made. Both indicated the possibility of obtaining cheaper rates from the Internet.

Mr. Ruane suggested in Section I - Travel Expense Reimbursement, 2 - Receipt Requirements and Other Reimbursement Criteria, (f) Hotel/Motel Related Expenses, that the City allot a set amount of $10.00 to be used as out-of-pocket expenses for incidental items per day, leaving it to the employee’s discretion on how and when it is to be used.

Mr. DePrima suggested addressing reimbursement for employees out of town on City business who use Internet access to communicate back to the City or to check their City mail. He also suggested that the Finance Director designate the authorized travel agent and periodically check for competitive prices. Mr. DePrima was in favor of using the Internet to obtain the lowest price possible.

Referring to Page 6, Lodging, Mr. DePrima suggested adding “when justified as an economical need and not a matter of personal convenience”. He also suggested adding the State of California to the list of “high cost” locations found on Page 8, Section 3, Meal Allowance Adjustments.

Mr. DePrima requested reconsideration of providing Cash Advance to employees, indicating that to his knowledge, it has never been abused or caused any problem. He also suggested that an employee be allowed to make at least one phone call home upon arrival or even every other day, provided there is a cap on the amount.

Responding to Mr. Gorman and Mr. Salters, Mr. Speed recommended that a list be made of the suggested changes and identify where in the policy they would be placed. Mr. Speed requested that all suggestions be forwarded to him.

Mr. Gorman moved to recommend deferring the Revised Travel Policy until the October 27, 2003 Legislative, Finance, and Administration Committee Meeting. The motion was seconded by Mr. Shelton and unanimously carried.

Mr. Gorman moved for adjournment of the committee meeting, seconded by Mr. Shelton and unanimously carried.

Meeting Adjourned at 7:04 P.M.

Mr. Carey moved for adjournment, seconded by Mr. Speed and unanimously carried.

Meeting Adjourned at 7:05 P.M.

                                                                                    Respectfully submitted,

                                                                                    William P. McGlumphy

                                                                                    Council President

WPM/jg/lcg

S:ClerksOfficeAgendas&MinutesCommittee-Minutes200310-13-2003.min.wpd

Attachment - Hospitality and Civic Function Policy