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<br />~ <br />~~HILLS <br /> <br />MEMORANDUM <br /> <br />. <br /> <br />DATE: <br /> <br />January 24, 2006 <br /> <br />Agenda Item 3.G <br /> <br />TO: Mayor and City Council Members <br /> <br />FROM: Murtuza Siddiqui, Finance Director/Treasurer ""s <br /> <br />SUBJECT: Mileage Reimbursement Rate/Policy Amendment <br /> <br />BACKGROUND: <br />Each December, the IRS reviews mileage reimbursement rates for private automobiles that are <br />used for business purposes for the next calendar year. On occasion, they might even review the <br />reasonableness of rates during the middle of the year. For the year 2006, IRS has established a <br />reimbursement rate of 44.5 cents per mile, Currently, the City reimburses staff at a 2004 rate of . <br />37.5 cents per mile. Between 2004 and December 2005, per mile rate had risen up to 48.5 cents. <br />The 48.5 cents was a temporary rate for the last quarter of2005, due to increased fuel costs. <br />Now thaI the fuel costs have dropped to around $2.25 per gallon as opposed to $3.00 last <br />summer and fall, IRS has determined 44.5 per mile is a reasonable rate for 2006. <br /> <br />DISCUSSION: <br />According to our existing travel policy, the mileage reimbursement rate is detcrmined by the <br />City Council. Most cities and other governmental organizations have a policy that ties the IRS <br />reimbursement rate to their policy so that it minimizes formal action cach time a change takes <br />effect. <br /> <br />RECOMMENDED ACTION: <br />Staff recommends that the City Council approve the following: <br /> <br />I. Approve change in the mileage reimbursement rate for 2006 to 44.5 cents per mile. <br />2. Amend the City's existing policy to read "City will use the official IRS mileage <br />reimbursement rate for the use of private automobile for business purposes". <br /> <br />. <br />