Mileage Reimbursement Rate




Adoption of Resolution Authorizing County Executive to set Mileage Reimbursement Rate




Tucker, White, Wiggans, Breeden, Davis






October 5, 2005


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Virginia Code § 15.2-1508.1 authorizes a county to reimburse any person using a private vehicle while traveling on business of the county.  The rate of reimbursement may not exceed the standard rate that is deductible as a business expense pursuant to the Internal Revenue Code and its promulgated regulations.  Virginia Code § 15.2-1508.2 further restricts the maximum rate of reimbursement for any person for which the Commonwealth bears any portion of the reimbursement expense to the rate set for the Commonwealth’s employees in the Appropriations Act.


It has been the practice of the County to set the reimbursement rate to match the rate authorized for the Commonwealth’s employees.  This fiscal year’s rate was set in the FY06 Annual Resolution of Appropriations adopted by the Board in June. Because of state law restrictions, the Commonwealth’s reimbursement rate cannot be changed until the adoption of the next Appropriations Act in the 2006 Session of the General Assembly.


Due to the dramatic increase and fluctuation of gas prices, the fairness of the current reimbursement rate is being questioned.  A change in the rate requires approval by the Board. 




Provide Effective and Efficient County services to the public in a courteous and equitable manner.




The reimbursement rate for private vehicles used by persons while traveling on County business is currently set in the County’s adopted FY06 Annual Resolution of Appropriations at the “same rate as that established by the State of Virginia for its employees”.  That rate is 32.5 cents per mile and was set in the General Assembly’s adopted FY06 Appropriations Act. That rate cannot be reconsidered by the General Assembly until its next session. The current Internal Revenue Code standard rate that can be deducted as a business expense is now 48.5 cents per mile.  That rate became effective September 1, 2005.  The federal government has acted to set the reimbursement rate for federal employees to match the 48.5 cents per mile rate.


Because of the significant increase in the price of gasoline since the state reimbursement rate was set, staff feels it would be timely and appropriate for the County to reexamine its reimbursement rate.  Rather than have the Board set a specific rate, staff recommends that the Board authorize the County Executive to periodically set and adjust the rate to address the cost of gasoline in the current fluctuating market.  The maximum rate that could be authorized by the County Executive is the IRS rate of 48.5 cents with the caveat that for any person for which the Commonwealth bears any portion of the reimbursement expense the reimbursement is limited to the current state reimbursement rate of 32.5 cents.  It is recommended that the County Executive be given the authority to set and adjust the reimbursement rate from time to time depending on the market conditions affecting the cost of travel so as to fairly reimburse persons using private vehicles while conducting County business.  



The budget impact will be dependent upon the reimbursement rate set by the County Executive.  If the maximum reimbursement rate is set, reimbursement costs could increase by approximately 50%.  It is anticipated that the funds for these increased costs would be covered by already appropriated funds in the local government and school budgets and that no additional appropriation of funds would be necessary.




Staff recommends that the Board adopt the attached Resolution authorizing the County Executive to set and to adjust from time to time the mileage reimbursement rate or rates to reimburse any person for using a private vehicle while traveling to perform the business of the County in the discharge of their official duties. 




A - Resolution to Authorize County Executive to Set Mileage Reimbursement Rate

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