PORT ANGELES — Clallam County Public Utility District commissioners will review a 17-year-old mileage reimbursement policy that has resulted in employees and commissioners getting paid 78.5 cents a mile when they drive their own vehicles for work-related travel.
Under the policy, the PUD pays 23 cents more a mile than the Internal Revenue Service rate, which these days is 55.5 cents a mile.
The upcoming review was sparked by Peninsula Daily News inquiries about the taxing district’s mileage reimbursement policy.
“It’s something we probably should have looked at five or 10 years ago,” PUD Commissioner Hugh Haffner said.
Haffner made the motion at a 1995 commissioners meeting that added the 23 cents to an IRS rate that was then 30 cents a mile.
The IRS rate will increase Jan. 1 to 56.5 cents a mile, bumping the PUD rate to 79.5 cents a mile.
Commission President Ted Simpson also was on the 1995 board that unanimously approved the increase.
“We should probably look at that,” Simpson said Friday in a telephone interview.
He said during the interview that he was driving back from a state PUD association conference in Vancouver, Wash.
Under the PUD policy, Simpson could receive $349 for what www.mapquest.com says is a 444-mile round trip from Port Angeles.
“At the time we looked at it, it was reasonable for an automobile for insurance and all the expenses that go with owning and operating a vehicle that the federal rate does not cover,” Simpson said.
Asked if it was fair to ratepayers, he said: “If you put it that way, no, it’s not.”
He said the IRS reimbursement rate is obsolete.
“You also have to ask, is the federal rate fair,” Simpson said.
“When we added the amount to it, [the federal rate] wasn’t fair.
“It did not cover the cost of operating a vehicle.
“The short answer is, yeah, we should look at that, see where it is, and we will.”
Commissioners also are paid up to $36,160 a year in monetary compensation, including a guaranteed $1,800 a month.
Commissioner Will Purser, who was not on the board in 1995, did not return calls for comment Friday.
Purser replaced Bill McCrorie, who was on the board in 1995 and died in 2001.
On its website, www.irs.gov, the IRS says how it arrives at the mileage rate.
“The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile,” the agency says.
Clallam and Jefferson counties and the cities of Sequim, Port Angeles and Port Townsend reimburse employees the standard IRS mileage rate for work-related travel.
So do the Sequim, Port Angeles and Port Townsend school districts.
So do the Port of Port Angeles and Olympic Medical Center.
The city of Forks’ rate is 51 cents a mile.
The city of Port Angeles encourages the use of pool cars.
Employees are paid 30 cents a mile if a pool car is available and they still use a private vehicle, City Clerk Janessa Hurd said.
City employees receive the federal rate if no pool vehicle is available.
In 2011, Clallam PUD paid $58,570 in mileage reimbursements, agency spokesman Mike Howe said.
Of that amount, the district paid out $17,944 in reimbursements over and above the IRS rate in accordance with the 1995 policy.
The portion that is above the IRS rate — the 23 cents a mile — is taxable.
The 23-cent figure was arrived at in a study by then-PUD Treasurer-Controller Shelley Burgett that reflected the true cost of operating a vehicle, Haffner said.
“Shelley thought then that this 23 cents was really true compensation for most people’s vehicles over and above what the IRS said,” Haffner said.
“This was not an arbitrary, flip-the-coin type thing,” he added.
“It is hoped that this increase in mileage allowance will encourage employees to use their own vehicles and reduce the district’s fleet,” according to the minutes of the April 10, 1995, meeting at which the mileage rate formula was approved.
Howe said Friday that the number of vehicles in the PUD fleet in 1995 was unavailable.
“With a quick look at the figures, we had 80 vehicles in 1998,” Howe said in an email.
“As of June 30, 2012, we had 132 total.”
Haffner said the commissioners’ intention in 1995 was, specifically, to keep the number of non-daily-use PUD vehicles to a minimum.
“When you are paying $20,000 or $30,000 for a vehicle, if it’s only used 20 percent of the time, that’s a lot of money to have sitting around,” he said.
“It’s a pain to have to go out and try to rely on a PUD vehicle to go to a meeting in Eastern Washington or in Seattle,” Haffner added.
Howe said Friday that the number of non-daily PUD vehicles in the district’s fleet was not available.
Haffner said his “gut feeling” was that the policy had done its job.
“I want to find out if it has worked,” he added.
“I will bring it up.”
Another concern in 1995 might have been the PUD employees’ union, Haffner said.
“We were concerned back then that if you tell the union people that they have to use their own vehicle, I think you end up having a lot of problems,” he said.
Timm Kelly, president and business manager of International Brotherhood of Electrical Workers Local 997, would not talk to a Peninsula Daily News reporter.
Kelly also did not respond Thursday or Friday to an email request for an interview about the PUD’s mileage reimbursement policy.
PUD commissioners are scheduled to approve a 2013 budget at their meeting Monday that includes an electricity rate increase of up to 3 percent, likely effective in May or June, Howe said.
“We are still awaiting specifics from Bonneville Power Administration on how their increase will impact the PUD,” he said.
The meeting is at 1:30 p.m. at the PUD’s main office, 2431 E. U.S. Highway 101 in the Gales Addition area east of Port Angeles.
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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at paul.gottlieb@peninsuladailynews.com.
