Anexo

CITY OF DOVER ATTACHMENT #2 DEPARTMENT OF FINANCE PROCEDURE MANUAL TITLE: Municipal Vehicle Use Procedure PROCEDURE # F362 DATE: April 6, 2004 PURPOSE: Establishes the official vehicle use procedures for the employees and officials of the municipal government of Dover, Delaware. Vehicles exempt from this policy are listed in Appendix C . SCOPE: The procedure applies to any person operating a vehicle for the purpose of conducting official functions of the municipal government. PROCEDURE ARTICLES: 1. City vehicles will be parked at the employee’s residence during the off-duty period. During the off-duty period, the assigned vehicle will not be used for personal convenience. 2. Employees may be assigned after hour duties in accordance with the contents of their assigned job description, or employment contract. 3. Employees assigned a city vehicle by employment contract are permitted personal use, however they must report their personal use to the Finance Department as outlined below for compliance with the Internal Revenue Service regulations. 4. Use of City general-purpose vehicles will be in accordance with applicable federal, state, and local statutes, regulations, and city municipal codes. The employee is required to live in Kent County. 5. No employee shall request or be permitted the use of City general-purpose vehicles for personal convenience when such vehicles are provided for use in the conduct of official business as a matter of policy. A. Each employee shall endeavor to pursue a course of conduct, which will not raise suspicion among the public that they are engaging in acts which are in violation of the public trust and which will reflect unfavorably upon the City. No employee or official shall use his public office to secure unwarranted privileges or perquisites during the use of City general-purpose vehicles, or use the vehicle for political purposes. B. No City general-purpose vehicle shall be operated for the purpose of travel to a residence, store or restaurant for any meal, unless it is in route to the job site. C. No City general-purpose vehicle shall be operated for providing travel for passengers in such vehicle for the purpose of any meal at a residence or restaurant. This principal does not apply to public works and utility vehicles that are utilized to transport work crews to and from job sites. D. City general-purpose vehicles may be authorized, on a case-by-case basis, for the operator and passengers to travel to and from appropriate meals when performing official municipal government business. Prior approval of the operator’s immediate supervisor is required. 2

E. Any personal convenience use of a city general-purpose vehicle will be reimbursed to the city. The manner of the valuation of such expense shall be determined by the Finance Director. F. City general-purpose vehicles authorized for commuting shall be charged at the rate of $1.50 for each one-way commute trip. 1. Authorized commuting charges will be a taxable compensation and included in the employee’s gross salary. 2. Employees performing on-call duties will incur the commute charge when a general-purpose vehicle is used to commute, unless required in their job description. 6. The Finance Department will prepare an annual analysis of the expenses of City general- purpose vehicles used for commuting purposes (see Appendix D). A. The analysis shall set forth a standard cost rate per mile of travel encompassing all expenses incurred in the operation of general-purpose vehicles. B. The standard rate will be the comparative rate used for cost analysis to qualify alternative proposals to achieve the most cost effective solution of general-purpose vehicle proposals and considerations. C. No costs associated with an employee’s wages or benefits will be included in the calculation for the standard cost rate per mile of travel. 7. The Finance Department has prescribed a form to record the detail factors associated with the daily use and monthly use of general-purpose vehicles to conduct city business including Commute Trip Mileage. The forms are included in Appendix E & F. Appendix F is the form prescribed by the Internal Revenue Service for daily use. The employee may choose which form is conducive to their personal use, both forms are not required. The forms are implemented to insure proof of compliance with applicable federal regulations. A. As an alternative, the approved form may be contained in a computerized format and printed at the time of need. B. The records of general-purpose vehicle travel will be maintained by the Payroll Office and will be readily available to City Council, City management staff, and the general public. C. Employees failing to submit properly completed vehicle travel forms timely will be taxed at the current mileage reimbursement rate as outlined in the City’s travel policy times an estimated mileage as determined by the Finance Department. (Currently $.375 per mile) D. Employees are required to enter their odometer reading in the Gas Boy system at the time of refueling the vehicle at the Central Services. The Fleet Maintenance Manager will provide monthly reports from the Gas Boy system to the employee and the Finance Department. These reports will provide assistance to persons responsible for completing the travel log. The recorded mileage will be reconciled by Finance Department staff to the daily commute mileage that was submitted to the Finance Department for tax purposes. Discrepancies will be brought to the attention of the Department Head for their investigation and response. 3

8. When not in use or assigned a City vehicle, all general purpose vehicles will parked at a municipal government parking location. 9. City general-purpose vehicles may be authorized for commuting use when: A. A general-purpose vehicle will be authorized for commuting purposes when the employee person has been assigned responsibility for on-call duties or emergency response. On-call and emergency response use does not constitute a federal or state taxable benefit. B. The City Manager may authorize vehicle use for Non-Emergency Use provided the employee can demonstrate that the actual number and nature of call-ins during the previous year warrants such approval for the benefit of the citizens and not the personal convenience of the municipal person. An authorization form must be completed and signed by the City Manager. Non-Emergency use constitutes a federal and state taxable benefit for both the City and employee. C. The Director of the employee(s) being assigned on-call or emergency status is responsible for maintaining and providing updated lists of all personnel assigned City vehicles to the Human Resources Director. The list shall contain the following elements: 1. identification of the municipal person authorized to commute, 2. the one way mileage between the municipal person’s residence and normal place of work, 3. the control information of the authorized general purpose vehicle, 4. the normal duty hours of the authorized municipal person, 5. the telephone contact information of the authorized municipal person, 6. the designation of the employee’s use – on-call, emergency, or commute. D. The Finance Department shall receive from Human Resources a master list of all employees and the vehicle assigned that are authorized use of City vehicles. For those employees applicable, the appropriate fiscal procedures will be followed in a timely manner to assess the cost of the commute to the employee’s gross wages. The Payroll section will notify each employee with approved use of a city general-purpose vehicle for commuting. The notification will include the amounts to be charged to gross salary, the rule allowing the charge, and the method of determining the charged value. 10. Employee(s) assigned City general-purpose vehicles will care for vehicles in a responsible manner. A. Failure to provide responsible care can result in disciplinary action. B. The use of any tobacco products is prohibited when accompanied by non-smoking passengers in any take-home vehicle. C. All persons shall wear seat belts while operating or riding in any City vehicle. D. The employee shall provide written disposition of the assigned vehicle while on extended vacation to their immediate supervisor. 4

E. When operating a City vehicle, the employee must have in his/her possession or the vehicle the vehicle registration, insurance card, a City issued identification card, and a valid driver’s license. F. Employees are required to close vehicle windows and lock doors when the vehicle is not in use. This measure will help ensure that the vehicle is not stolen as well as safeguarding the contents of the vehicle. Vehicle keys must be removed and properly secured when the vehicle is in use. The City is not responsible for personal property in the vehicle. 11. All City over-the-road vehicles, except those used as surveillance cars, shall have permanently affixed to each front door an official City emblem. (Requested by some members of Council) 12. To provide internal control and audit documentation with policies and procedures, each employee that is assigned a city vehicle for commute purposes will have on file in the Payroll Office the following: A. “Authorization to Use a City Vehicle” (see Article 6) to be used by the Finance Department to report on W-2 forms the value of daily commuting as an employee fringe benefit. B. “Statement of Personal Usage for City Provided Vehicles” (see Article 7) to validate personal mileage and insure compliance with federal and state regulations. C. These forms are to be provided to the Finance Department on or before the deadline specified in an annual memorandum issued by the Payroll Office. The annual memorandum will also provide a date in which the employee’s pay will be assessed additional taxes on the value of the fringe benefit. For federal and state tax purposes, vehicle use is calculated on a calendar year. D. For those employees that follow the commute rule: The City has elected to tax the benefit and pay the respective taxes on each bi-weekly payroll period, based on the calculation in the Authorization Form (see Appendix D). E. For those employees that follow the per mile or lease value rule: An employer may treat the value of the benefits provided during the last two months of the calendar year as paid during the subsequent calendar year. The City has adopted this policy. In 2004, the City will report the value of the personal use of a vehicle for the period of January 1 to October 31. In subsequent years, the value of the benefit is calculated for the period November 1 (of previous year) to October 31 (of current year). 13. Policy exemptions and exceptions: A. Robbins Hose Company No. 1 vehicles are not owned by the City of Dover, and therefore the City is not required to ensure compliance with the Internal Revenue Code. B. The City currently has three employees with Fire Marshal duties. All three employees are assigned a clearly marked emergency response vehicle for rotation of on-call duties. When one or more Fire Marshal employees are not on call, the City owned vehicle is not to be used for commuting purposes, except for the Chief Fire Marshal. Any other exceptions must be substantiated with historical records of experience. 14. In consideration of these guidelines and policies, one’s interpretation should be on a strict, rather than loose, construction basis, and obviously, the objective should not be to rationalize ways and means for circumvention of this policy. 5

ATTACHMENTS: Appendix A – Definitions Appendix B – City of Dover Related Policies Appendix C – Explanation of Regulations Appendix D – Authorization of Vehicle Use Form Appendix E – Statement of Personal Usage for City Provided Vehicles Form (Monthly Use Log) Appendix F – Vehicle Mileage Log (Daily Use Log) 6

APPENDIX A DEFINITIONS: Primary Place of Employment the official work location a municipal person is normally assigned to or working at General Purpose Vehicle a vehicle that is not specifically designed and used for specialized applications and may be used for personal convenience. Commuting taking an employer-provided vehicle to or from a work site and the employee’s residence. The reporting of commuting miles should be based on the distance from an employee’s home to their work site and not to a city vehicle storage facility. Commute Trip Mileage the mileage to/from a municipal person’s residence to their office or site to perform normally scheduled work. Personal Convenience anything fitting or suited to the municipal person’s beneficial welfare, which shall also mean any money, thing of value, or any other economic benefit of any kind or nature whatsoever. Official shall mean any elected or appointed official of the City of Dover and all members of any committee, commission or board appointed by the Mayor of the City of Dover or appointed by the City Council. Official Responsibility shall mean any direct administrative or operating authority at any level, either exercisable alone or with others, either personally or through subordinates to approve, disapprove, recommend or otherwise direct action on behalf of the City of Dover. 7

APPENDIX B CITY OF DOVER RELATED POLICIES The following in an excerpt from the City of Dover Employee Handbook: USE OF CITY SUPPLIES AND EQUIPMENT City equipment, materials, tools and supplies shall not be available for personal use nor be removed from City property except in the conduct of official City business. Vehicles owned by the City shall be cared for by an employee in the same responsible way that an employee would care for their personal vehicle. Lack of care can result in disciplinary procedures. Such vehicles are to be used exclusively for official City business, except when by special approval. Use of vehicles for commuting to and from work shall usually be limited to an employee who is subject to an emergency call back to work. No individual shall operate or ride in a City vehicle except as is required for the conduct of City business. The following is an excerpt of Division 4 – Code of Conduct, Section 2-10, Prohibitions Relating to Conflicts of Interest, Subsection (f) – Abuse of Office, Paragraph (3), of the Dover Code: (3) No city official or employee shall request or permit the use of city owned vehicles, equipment, materials, or property for personal convenience or profit, except when such services are available to the public generally or are provided for the use of such official or employee in the conduct of official business as a matter of municipal policy. 8

APPENDIX C EXPLANATION OF APPLICABLE REGULATIONS FEDERAL LAW Under IRS (IRC ss 274(d)) regulations, the imputed value of personal use of an employer-provided vehicle must be included in the employee’s gross pay and is taxable for income and social security purposes. Employees and employers are required to keep records substantiating the personal use of an employer-provided vehicle and the business use of the vehicle. Even if an individual is exempt under state law from the state reimbursement requirement, the amount of the benefit that is added to an employee’s gross pay is still considered a taxable fringe benefit for IRS purposes. However, the reimbursement to the City can reduce the imputed value of personal use of the employer-provided vehicle by the amount of reimbursement. The Internal Revenue Service has issued rules and regulations detailing how employees will be taxed on employer provided vehicles used for commuting purposes. The value of employer-provided road vehicles used by State employees for commuting and personal use are fringe benefits and must be included in wages for Income Tax and Social Security tax purposes. However, when the employee pays the employer the fair market value for the personal use of the vehicle, no income results to the employee. Partial payment reduces the employee’s income by the amount of the payment. The amount added to wages is not considered salary for the purposes of computing retirement benefits. The term “road vehicle” means any motorized wheeled vehicle manufactured primarily for use on public streets, roads, and highways. The following employer-provided vehicles are to be excluded: a) Clearly marked police and fire vehicles; b) Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat; c) Flatbed trucks; any vehicles designed to carry cargo with a loaded gross vehicle weight over 14,000 pounds; d) Passenger buses used as such with a capacity of at least 20 passengers e) Ambulances used as such or hearses used as such; f) Bucket trucks (“cherry pickers”); g) Cranes and derricks; h) Forklifts; i) Cement mixers; j) Dump trucks (including garbage trucks); k) Refrigerated trucks; l) Tractors and other special purpose farm vehicles; m) Combines n) School buses used as such; o) Qualified moving vans; p) Qualified specialized utility repair trucks (other than a van or pick-up truck) q) Officially authorized uses of unmarked vehicles by law enforcement officers or arson investigators who are full-time employees, authorized to carry firearms, execute search warrants and make arrests. r) Such other vehicles the (IRS) commissioner may, from time to time, designate. 9

Under the regulations, the employer is exempt from withholding taxes, other than Social Security, if the employer notifies the employee that the employer is not withholding and the employer includes the value in the employee’s W-2. The regulations also allow payment of Social Security Taxes annually. An employer may treat the value of the benefits provided during the last two months of the calendar year as paid during the subsequent calendar year. RECORDKEEPING REQUIREMENTS The law implements the record-keeping standard of “adequate records or sufficient evidence” to support any credit or deduction claimed for business use for an employer-provided vehicle. Examples of acceptable substantiation would be account books, diaries, logs, receipts, bills, trip sheets, expense forms or statements by disinterested witnesses. Records must substantiate the time, date, place, purpose and cost of travel with written evidence having more probative value than oral substantiation. The city has a policy that city-owned vehicles cannot be used for personal use except for commuting purposes. TAXATION RETURN QUESTIONS Compliance is tracked by the IRS through a series of questions included on tax return forms. Taxpayers are required to state the amount of personal use of an employer-provided vehicle and that business use can be substantiated. Employees must provide this information to their employers who in turn are required to keep those reports on file for corroborative purposes. Audits are also conducted by the IRS to track compliance. CALCULATING VALUE AND REPORTING FOR GOVERNMENT CONTROL EMPLOYEES Governmental control employees = elected officials or any employee whose compensation equals or exceeds $110,700. These officials may not use the commuting value method but can determine the value of the benefit using the annual lease value rule or the vehicle cents-per mile rule. CALCULATING VALUE AND REPORTING FOR GOVERNMENT NON-CONTROL EMPLOYEES A City employee who is (1) provided a City-owned vehicle to drive to and from work for valid business reasons (ability to respond to emergency calls); (2) prohibited from using the vehicle for personal use; except for commuting, and (3) not a governmental control employee as defined above may use the vehicle cents-per-mile method, the $1.50 per commute method, or the annual lease value method. Once either method is adopted, the employer and the employee must use this valuation technique for all subsequent periods until circumstances change. The types of excluded vehicles listed on pages 1 and 2 of this appendix are exempt from taxation. An employee provided with any other type of vehicle is subject to taxation on the commuting value. See the Finance Department for examples of each method of calculation. 10

Appendix D City of Dover Authorization of Vehicle Use Employee's Name Department/Division License Number/State/Expiration Vehicle # Year/Make/Model Calculation of City Cost Calculation of Fringe Benefit Maintenance Costs: gasoline, oil, 0.166 Rate per Mile 260 Total workdays tires, batteries, parts, service, labor, and depreciation expressed as a 785.40 Projected Annual Mileage cost per mile in accordance with (12) Less Holidays federal regulations 130.38 Total Maintenance (A) (10) Less Vacation Days Overhead: Insurance and 0.0249 Rate per Mile administrative expressed as a cost per mile at 15% of maintenance rate 785.40 Projected Annual Mileage Total days for calculated fringe 19.56 Total Overhead (B) 238 benefits Social Security & Medicare taxes paid on the greater of cost per Times $1.50 mile calculation or daily commute Additional cost of City $ 3.00 Commute Rate calculation at 7.65% 54.62 contribution for FICA (C) (at two daily commutes) $ 204.55 Total City Cost (A,B & C) $ 714.00 Annual Benefit Decision Factor The selection method will be based on the most advantageous Bi-weekly Pay financial position for the City of $ 27.46 Adjustment/26 wks Dover. City Code Section 2 - 10 (f) (3) No City official or employee shall request or permit the use of city owned vehicles, equipment, materials, or property for personal convenience or profit, except when such services are available to the public generally or are provided for the use of such official or employee in the conduct of official business as a matter of municipal policy. City Manager's Signature I certify that I have read the above and understand my responsibilities for use of a City vehicle. A copy of the City of Dover Vehicle Use Policy has been provided to me. Employee Signature Form# 101 11

Appendix E City of Dover Statement of Vehicle Personal Usage Calendar Employee's Name: Year: Vehicle #: Vehicle Year/Make/Model: Personal Business # of Beginning Mileage Ending Mileage Total Miles Commute Commute Commutes January February March April May June July August September October November December Form# 101 Signature of Employee/Official 12

Employee Name______________________ Vehicle Mileage Log Appendix F Assigned Vehicle #_____________ Year________ Make _________ Model_______________________ Month Year Odometer Reading P B e u r MPG's & Parking & Misc. Day Desinations s s Purpose Begin End Trip Cost Toll Costs Expense Forward the balances from the previous page if it is for the same month Subtotal of the page Total for the month BUS/PERS: Please check the appropiate box as to whether this trip is Business (BUS) or Personal (PERS). Trip: This is the difference between "Begin" and "End" Odometer Readings. MPG's & Cost: This column is to be used for gasoline purchased from somewhere other than at the City of Dover Warehouse, that you would put in for reimbursement. City of Dover (IRS approved form) Form# 101 13