The information provided in this staff report is in response to a Future Agenda Item Request (F.A.I.R.) from the September 15, 2015 City Council Meeting Item 17B. Future Agenda Item Request (F.A.I.R.): A request by Councilmember Putzova to place on a future agenda a discussion of the Council Travel Policy and Use of Travel Funds. The Council unanimously agreed to add the item to a future agenda in order to provide clarity, transparency and avoid ad-hoc decision-making. The council specifically requested to establish a Council Travel Policy that outlines the following:

1. How funds are used?
2. What happens to unused funds?
3. What accountability procedures should apply?   

Background: The City Council currently follows the Employee City Travel Policy with the exception of the Travel Request Form. Travel fund exceptions are referred to the City Manager for approval. Travel funds have been used for other items such as subscriptions, memberships and meeting tickets.  Detailed spreadsheets are maintained by the Executive Assistant to the Mayor and Council and travel budget updates are provided to the council periodically. Travel funds may be shared amongst the council as long as it does not exceed the overall budget.   

Response:

1) How funds are used?

Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official City of Flagstaff business.  Such costs may be charged on an actual basis, a per diem basis, or mileage basis dependent on the type of travel incurred and in accordance with the City of Flagstaff‘s travel policy.

• Refer to the City Travel Policy located on City of Flagstaff website:
• http://www.flagstaff.az.gov/Search/Results?searchPhrase=travel policy&page=1&perPage=10
• The City Travel Policy is also located on the Employee Internal City Net webpage

2) What happens to unused funds?

The City of Flagstaff does not carryforward operational line items between fiscal years.  The City practice is to only carryforward unspent funds between fiscal years for capital projects, operating capital and major contracts funded with one-time money. During the fiscal year, sections are able to re-allocate their line item budgeted amounts for contractual and commodities to other contractual and commodity line items.   This reallocation of operational funds does not take Budget Team approval as long as a section ends the fiscal year within budget. However, if a section underspends their budgeted amount, those ‘leftover’ dollars are accumulated and used as the one-time funding in future budget years.  A section does not get to keep any under-expenditure in their budget, it is re-purposed within the Fund as a whole.  For example, if the Finance Section has a $500,000 budget and their year-end expense is $480,000; the $20,000 difference will be accumulated as one-time funds and reallocated in a future budget somewhere in the General Fund, but would not be specific to Finance.

The guiding policy document is the 2016 Annual Budget and Financial Plan located on the City of Flagstaff website at http://www.flagstaff.az.gov/index.aspx?nid=3259

3) What accountability procedures should apply?   

• The existing Travel Policy identifies the accountability process. 
• All travel expenses are submitted to Finance within 30 days using a travel reconciliation form that identifies the expenses as well as authorized and approved signatures with the travel receipts.
• Elected officials follow the same accountability process as employees with the exception of a Travel Request Form.
• If an elected official has a request to use travel funds that may be considered an exception. The practice has been to email the City Manager with the request.  The request is then reviewed and discussed with the appropriate staff and rules and regulations reviewed for approval or denial.

Council approved an annual travel budget of $19,043.99 in FY14, FY15 and FY16. The budget is administratively divided equally amongst the councilmembers at $2,720.57. The budget line item is travel, lodging and meals with account number 001-09-401-1300-1-4261. The total budget of the line item is $30,710 but 38% is allocated as a payroll stipend reducing the travel budget amount to $19,043.99.

COUNCIL GOALS:
Not Applicable

No

• Keep existing Council travel process "as-is" with no changes and continue to use Employee City Travel Policy.  
• Edit Employee City Travel Policy to include elected officials.
• Develop Council Travel Policy.
• Budget for council line items regarding subscriptions, tickets, memberships, etc.

Inform