News

Officials say budget woes may put vehicle stipends on chopping block

Posted June 27, 2010 11:00 pm

Daily Herald: On Guard

Seven of Palatine's top administrators receive monthly car allowances that give them enough money to drive more than 1,000 miles per month on village business.

Yet, even village officials acknowledge some employees don't drive that much.

The $525 monthly car allowances are among those given out by 50 of 89 municipalities, or 56 percent, surveyed by the Daily Herald for its "Driving on Your Dime" series looking into the use of taxpayer dollars for driving expenses and cars for government employees.

The monthly stipends range from $69 to $700. And 74 communities provide take-home cars to some top administrators and department heads - about 40 percent of those vehicles are for nonemergency managers. Of the 89 towns surveyed, 42 give both stipends to some managers and take-home cars to others.

The Daily Herald's series found school district and municipal governments collectively spending more than $1.2 million a year on such perks for top officials, at a time when severe financial constraints have led to layoffs, service cuts and tax or fee hikes in many towns.

Yet, in the case of municipalities, take-home vehicles and car allowances for employees so far have largely remained untouched, though officials in some of those towns say they now are scrutinizing perks for possible trims.

Government watchdogs say the perks often are excessive and do not match the amount of driving an employee actually does, and they argue such perks should have been axed before jobs and programs.

Many village officials, though, defend the spending, saying the employees are asked to drive within town and across the state to do their jobs and that the vehicle benefits are simply part of top employees' total pay.

In many cases, the perks are given to keep top administrators' compensation on par with those of police and fire chiefs, who are given take-home cars so they can respond to emergencies around the clock.

In the private sector, driving stipends and take-home cars once were considered ways to help compensate top executives for high responsibility jobs. Yet today, that is much less common for top corporate executives, as companies have trimmed back and left such expenses mostly for employees who travel extensively, such as people working in sales, according to a compensation expert.

Such taxpayer-supported perks now may be on the chopping block in some suburbs.

Palatine Village Manager Reid Ottesen said the village is considering reining in all such benefits because money is so tight.

"If things continue the way they are, yes, you have to look at everything and not just for department heads," Ottesen said. "It's definitely something to be evaluated."

While officials say the stipends or free cars are an essential tool for employees to do their jobs, municipalities generally do not require employees receiving stipends to track their actual mileage, nor do they calculate the distance and frequency of travel within or outside of the community on official business.

Government accountability watchdogs argue such perks are used disproportionately since a human resources or information technology director would logically have less of a need to drive around town than the public works director or fire and police chiefs who are essentially on call 24/7.

"In private industry, especially considering today's economy, people are responsible for providing their own transportation," said Mark LaMet, head investigator for the Better Government Association. "People may get mileage reimbursement, but very seldom do they get a company car anymore to take home. It's really hard to justify why the taxpayer has to pay for the whole kit and kaboodle."

The city of St. Charles, for example, which spans 15 square miles in DuPage and Kane counties, gives seven employees monthly stipends of $450 each, and $600 to the city administrator.

In order to justify that cost under the current federal mileage reimbursement rate of 50 cents per mile, the employees and city administrator would have to drive 900 miles and 1,200 miles per month, respectively - equivalent to circling St. Charles 60 and 80 times a month.

St. Charles City Administrator Brian Townsend said the stipends are vital for his department managers.

"I think that demonstrates maybe a lack of understanding of the responsibilities that our directors have," said Townsend of criticism that such stipends are excessive.

Townsend said often his staff travels outside the community to attend meetings and participate in committees and regional task forces in other counties.

"We need to make it easy for people to do that," Townsend said. "I think they work hard and I think they deserve the benefits that they receive. One of the reasons that we use allowances as opposed to take-home vehicles is that, frankly, it is much more expensive to own, operate and maintain city vehicles."

Townsend, who negotiated his $600 monthly stipend for travel as part of his employment agreement in 2005, said the city hasn't increased stipends in the last five years.

However, he now says officials are considering cutting back on such benefits along with reviewing salaries, health insurance and pension contributions due to a projected $2.5 million deficit for the next three years.

"We are looking at a wide variety of cost-saving measures over the next six months, and I can tell you this will probably be one of the items that will be on that list," Townsend said. "It really amounts to prioritizing expenses and determining what it is the city is going to be able to sustain."

Similar budget problems in Schaumburg haven't affected that city's policy to grant 11 department heads monthly stipends ranging from $310 to $693.

The village for the first time in its 54-year history instituted a property tax this year to plug a $17 million budget deficit.

Schaumburg Village Manager Kenneth Fritz said communities have to offer such benefits if they want to attract and retain top talent.

"If you are trying to recruit good department directors, you want to be competitive," said Fritz, who gets a monthly vehicle stipend of $693 - among the highest for a village manager among the towns surveyed by the Daily Herald.

In the 1980s, every Schaumburg village director got a take-home car, Fritz said.

"It wasn't an issue of how much they drive. It was to match the perk that the fire chief and police chief get," said Fritz, comparing it to receiving vacation time or health benefits.

"To fairly compensate them equitably across the board makes sense to me," he said.

Fritz said his department heads took a hit in another way by not taking a pay increase and increasing their contribution toward health insurance.

"In the bigger scheme of things, our department directors lost ground," he said.

Tax watchdog groups argue the perks don't reflect the reality of what the people actually paying for them - taxpayers - are experiencing in this lingering recession.

"When people are continually being asked to pay more without an increase necessarily in income, I think we should have the same expectation for government to examine their finances," said Terry Pastika of Palatine, who heads the Citizen Advocacy Center, an Elmhurst-based group that monitors government abuse of power.

"How much in excess are these stipends over what would be reasonable reimbursements per a government's standards?" Pastika asked. "There's a valid question as to whether that's appropriate spending at a time when public bodies across the board are talking about not having the resources to function properly. It's hard to justify stipends for things like cars when taxes are being raised."

At least some towns such as Mundelein argue they have taken a judicious and more frugal approach to which administrators get cars and the kinds of vehicles they get to drive.

A majority of the employees who get take-home cars in that village work in supervisory roles in public works, streets and sanitation, vehicle maintenance, and police and fire departments. They drive everything from pickup trucks and SUVs to the latest hybrids.

"These are work vehicles," said Michael Flynn, assistant Mundelein village administrator. "The people who get the vehicles are the individuals who have responsibilities to answer alarms and emergency calls. It is particularly burdensome for them in the winter. Bringing the vehicle home is not a perk. The vehicle isn't used in place of the family car. They are brought home ... so they can respond quicker."

Flynn said after years of not claiming mileage reimbursement for using his personal car on village business he finally opted to drive a 1998 Ford Crown Victoria, a hand-me-down cop car that he said he would run into the ground.

He added the village's information technology director drives a similar squad car around town to maintain computers and networks at various buildings and is on call 24 hours a day.

Even if employees didn't take home cars, the village would still need to have vehicles on hand for emergency use, so there really would be no savings, Flynn said.

Meanwhile, Mundelein eliminated nine employee positions, absorbed three retirements through attrition and cut expenses across the board this year from Fourth of July fireworks to mosquito abatement. The village also deferred capital improvements and had to borrow from reserves to make up revenue shortfalls.

LaMet says it is unacceptable for any government entity to lay off people or slash legitimate expenses before curbing benefits that have too often become "entitlements."

"If it's perks versus services, we choose cut perks," he said.

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<li><a href="/story/?id=389541">Despite budget cuts, some school officials expect car allowances <span class="date">[6/24/10]</span></a></li>

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<h2>Editorial</h2>

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