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Car Allowances at Municipalities Coming Under Question

August 19, 2010

Reversing a decades-old policy that treated car allowances as extra compensation, the city of Richardson, Tex., is eliminating car allowances for many city employees. The city will instead increase those employees' salaries by an equal amount, according to The Dallas Morning News.

Allowances will still go to 81 employees, mostly field workers, such as code enforcement officers, who require automobile use for their jobs. Allowance amounts currently range from about $3,000 a year to nearly $9,000.

Richardson has spent about $840,000 a year on car allowances. About $339,000 will be shifted to salaries for 57 employees who will no longer receive the allowance. Those seeing the compensation shift to salary largely hold administrative jobs, such as department directors and assistant directors.

Council member John Murphy said he would like an assessment whether shared city vehicles should be used for some field work to show the public that somebody who drives a city-bought vehicle is a city employee on official business.

Car allowances are also coming under question in Plano, Tex., which spends about $623,000 a year on them. One council member has asked for a city review of how the city sets allowances. She also questioned whether Plano should instead reimburse employees for mileage rather than issue a flat monthly stipend.

Plano City Manager Tom Muehlenbeck and Richardon City Manager Bill Keffler both say that paying car allowances is cheaper than buying a full city fleet, and using mileage reimbursement would bring administrative costs.

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