Ventura County Grand Jury • 2008-2009

Is the City Car a Free Ride?

Published: May 11, 2009 42 pages
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Findings and Recommendations 12 findings

F01
As of September 2009, the Cities reported owning a total of 1,457 vehicles, of which 559 were Safety (police and fire) and 898 were Civil. The attached summary “Vehicle Usage – Summary Data” shows vehicle inventory for each city by type of vehicle with summary analyses. (Att-02)
No recommendations for this finding
F02
All Cities have written policies governing the acquisition of city vehicles. • all Cities other than Oxnard apply their standard formal purchasing policies which establish bidding and approval requirements by value of the acquisition • Oxnard has specific procedures regarding vehicle acquisition
No recommendations for this finding
F03
The Cities have few general limitations or rules regarding price, features, or specifications for acquisition. Some Cities have guidelines, such as, “no luxury options.” Vehicles may be individually specified according to the anticipated use. Several policies explicitly prohibit specification by brand name. (Att-03) Oxnard, Ventura, and Camarillo formally require vehicle purchase requests be reviewed by a fleet manager (or equivalent) before being sent out for bid; others require similar review by a department head (or higher) for approval.
No recommendations for this finding
F04
All Cities except Ojai have established specific rules for employee use of city-owned vehicles, such as, limitations on use for personal purposes, requirement for current drivers’ licenses, and accident reporting.
No recommendations for this finding
F05
Ojai reports that a vehicle use procedure is currently being prepared. ______________________________________________________________________________ 2 Is the City Car a Free Ride?
No recommendations for this finding
F06
Policies for assignment of take-home vehicles vary among the Cities as shown in the attachment “Take-Home Vehicle Assignment Policies.” (Att-04) • nine cities have written policies for approval of take-home vehicles requiring approvals at the department or city manger level • seven cities have work-related criteria for assigning take-home vehicles • two cities, Santa Paula and Moorpark, do not define bases for assigning overnight take-home vehicles • Ojai reports no take-home vehicles and has no applicable policies
No recommendations for this finding
F07
On July 8, 2008, the Thousand Oaks City Council, upon the recommendation of its finance department, voted to eliminate all 39 take-home vehicles effective January 1, 2009. The City Auditor estimated annual savings of $100,000, based on commuting miles, fuel, maintenance and depreciation. (Att-05)
No recommendations for this finding
F08
By January 2009, Thousand Oaks: • reduced the number of take-home vehicles from 39 to 5 (city manager and city attorney per employment contracts and three public works officials based on job-related need) • retained the other 34 vehicles in the city fleet for daytime use and keep them at city facilities overnight • reported no offsetting employee compensation
No recommendations for this finding
F09
The Internal Revenue Service (IRS) in Publication 15-B, “Employer’s Tax Guide to Fringe Benefits” (Pub 15-B) requires that an employer must include in employees’ taxable incomes the value of personal use of employer-owned vehicles, subject to certain exceptions, such as, marked and unmarked police, fire and law enforcement vehicles, special purpose/specially marked vehicles, pickups, and vans over 14,000 pounds gross vehicle weight. [Ref-01] ___________________________________________________________________________ Is the City Car a Free Ride? 3
No recommendations for this finding
F10
The Cities have various practices for reporting imputed income on take- home vehicles, per Pub 15-B. (Att-02, Att-06) Civil Take-home Vehicles and Imputed Income Civil City Civil Take- Take- Imputed Vehicles homes homes as a Income Percent of Reported Total Oxnard 309 21 7% 8 Thousand Oaks 154 5 3% 5 Simi Valley 137 13 10% 13 Ventura 111 37 33% 0 Camarillo 45 5 11% 0 Moorpark 23 1 4% 0 Port Hueneme 45 1 2% 0 Santa Paula 41 1 2% 0 Fillmore 19 1 5% 0 Ojai 14 0 0% 0 Total 898 85 9% avg. Five cities furnished procedures for reporting imputed taxable income to employees assigned qualified take-home vehicles consistent with Pub 15-B. Of the five cities with such procedures, Oxnard, Thousand Oaks, and Simi Valley reported imputed income; Camarillo and Santa Paula did not. Four cities (Ventura, Moorpark, Port Hueneme, and Fillmore) did not furnish an imputed income reporting procedure nor did they report imputed income on their take-home vehicles. Ojai reports no take-home vehicles and has no imputed income reporting procedure.
Related Recommendations (2)
R01
All Cities with take-home vehicles, especially Ventura, should conduct an evaluation of take-home vehicle practices for opportunities to reduce costs. (C-04, C-05)
R03
All other Cities with take-home vehicles should conduct a compliance review of their respective imputed income reporting practices. (C-06)
F11
In a letter dated September 18, 2008, Ventura stated: “The City does not report imputed income for employee take-home use of city vehicles because of the 24/7 availability requirements of these positions for emergencies together with the City policy (APP No. 12.29) and that the use is primarily for City business. The city is within the IRS exemption of Publication 15-B.” Ventura confirmed that it does not have an independent auditor’s opinion supporting its policy. ______________________________________________________________________________ 4 Is the City Car a Free Ride?
Related Recommendations (1)
R02
Ventura should obtain a written opinion from an independent auditor as to the validity of its policy of non-reporting of imputed income on all take-home vehicles. (C-06)
F12
No city reported assignment of a vehicle to an elected official. (Att-07) Conclusions C-01. The Cities’ policies and procedures regarding acquisition of vehicles are consistent with policies for purchasing other commodities of like value. (F-02, F-03) C-02. All Cities except Ojai currently have adequate written vehicle use policies addressing such matters as: requiring drivers to be licensed, reporting accidents, and avoiding non-business use of city vehicles. (F-04, F-05) C-03. The nine cities which furnish take-home vehicles have adequate authorization/approval policies. (F-06) C-04. In comparison with other Cities, Ventura has a disproportionately large percentage of take-home vehicles in its fleet (33%), triple that of the next largest (Camarillo 11%), and more than triple the 9% average of all Cities. (F-10) C-05. Thousand Oaks has found cost savings opportunities by changing its take-home vehicle practices. Similar savings may be available to other cities with take-home vehicles. (F-07, F-08) C-06. Every City with take-home vehicles is obligated to evaluate whether any of the exemptions of Pub 15-B applies to each employee assigned a take-home vehicle. Valid bases for exemption from reporting imputed income on a take- home vehicle are described in Pub 15-B. Ventura’s non-reporting of imputed income on any of its 37 Civil take-home vehicles, however, is based on an asserted need for 24/7 emergency availability; this is inconsistent with Pub 15-B. (F-09, F-11) Recommendations
No recommendations for this finding

Conclusions 1

Commendations 1

No Responses Found 10

Government entities assigned to respond to this report. No response documents have been linked in our database.

Camarillo City
Fillmore City
Moorpark City
Ojai City
Oxnard City
Port Hueneme City
San Buenaventura City
Santa Paula City
Simi Valley City
Thousand Oaks City