Wednesday, January 9, 2013

New AG Opinion Renews Debate On Kenner Car Allowances

Is it a reimbursement or extra compensation for political appointees?

For several years, the people of Kenner have pondered that question. Kenner officials have claimed that auto and cell phone allowances, even without the appropriate documentation or mileage, were legitimate reimbursements.
It didn’t matter that the City of Kenner is only about 11 square miles and most of the political appointees that were receiving $300 – 500 per month in auto allowances rarely, if ever, left their offices.

It didn’t matter that the IRS has said that mileage commuting from home to work is not reimbursable.
It didn’t matter that this policy went on for years since former Mayor Ed Muniz, and then-CAO now-Mayor Mike Yenni, came under criticism for reducing the amount of employees who received city take-home vehicles while simultaneously significantly increasing the number of employees receiving extra money in their paychecks in the form of these allowances.

It didn’t matter that employees were paid a flat, monthly fee regardless of their vehicle or cell phone usage.
It didn’t matter that these allowances were listed on employees’ W-2 forms as income.

It didn’t matter that the Kenner City Council never approved these payments until earlier this year.
And, it really didn’t matter that many Kenner residents have long complained about this wasteful and abusive spending.

Now, the Louisiana Attorney General Office has weighed in and we’ll see if their opinion matters.
In an opinion sought by Mayor Yenni after receiving more criticism from the public, Assistant Attorney General Emailie Boyce said that the allowances should be considered compensation. This flies in the face of Kenner City Attorney Keith Conley who repeatedly referred to the allowances as “reimbursable expenses”.

At a Kenner City Council meeting earlier this year to discuss and, finally, attempt to legitimize these payments, the Council almost universally discussed how hard these city employees worked and how they deserved this extra compensation. discussed the auto allowances in June:

The AG opinion clearly falls on the side of “compensation” instead of “reimbursable expenses”.
Regarding the fact that employees received a flat fee and a payment not based on actual mileage, Boyce wrote, “These facts seem to contradict the assertion that the car allowance is merely a reimbursement of the employee’s expenses.”

Boyce further states, “(I)t is the opinion of this office that the car allowances provided to certain City employees are compensation, rather than reimbursement.”
Regardless of how the Kenner City Council, Mayor Yenni or City Attorney Conley want to spin this, clearly the auto and cell phone allowances that certain Kenner employees have received for years has been excess compensation. Unfortunately, since the City Council, instead of prudently waiting for the AG opinion, has already voted to legitimize these illegal payments, Kenner residents have no recourse to stop the practice.