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City manager offers explanation for vehicle insurance discrepancy

By Staff | Apr 27, 2009

The ever-changing number of vehicles in the city’s fleet is behind the discrepancy between the number of insured vehicles and the number of actual vehicles contained in a recent audit report, Cape Coral City Manager Terry Stewart said Monday.
“(The number of city vehicles) changes because we have vehicles going into the system and going out of the system all the time,” Stewart said.
The audit report showed the city was paying insurance on 920 vehicles, whereas the total number of vehicles was shown to be 845. As of Oct. 1, there were 845 total vehicles in the city’s fleet. The 920 number was derived from information that was current as of the summer of 2008, according to risk manager Mike Quigley.
The city pays $33 in liability insurance for each vehicle per year, information that was not included in the rate study.
“They never asked for it,” Quigley said.
Stewart agreed with most of the other findings of the audit and its subsequent recommendations.
The audit showed there was no department that was ultimately in charge of the city’s vehicles, making records hard to obtain.
“We found the personal usage of city-owned vehicles was not well-documented,” City Auditor Dona Newman said.
City management is already working on many of the recommendations in the report, including having Public Works Director Chuck Pavlos oversee the records of the city’s fleet, imposing stricter controls regarding the recording of mileage used for city business versus personal use, and complying with IRS regulations.
“If you can’t prove that (the use of city vehicles) was for business … the IRS has the option of saying, ‘I’m just going to assume that it was all personal,'” Newman said, adding that the city would have to pay more taxes in such a scenario.
Many of the reforms city management is implementing are scheduled to be in place by June 1, with the rest of the audit’s recommendations to be part of city policies by Sept. 30.
Newman will follow up on her office’s audit to ensure the new policies are being implemented, and will report back to the City Council by March 2010.
The city auditor won’t be the only person double-checking Stewart’s progress.
Councilmember Bill Deile, who attended the audit committee meeting earlier this month when the audit report was released, said he was “by and large” pleased with the response of city management to the audit.
“We have to see what the results are,” Deile said.