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8.0. SR 07-12-1993 A.I ~\ ( II .YI~ , E I\. River ITEM 8 TO: . MAYOR AND CITY COUNCIL FROM: PATRICK KLAERS, CITY ADMI~~~R JULY 8, 1993 ~ SUBJECT: FREQUENTLY FLYERS DATE: The 1992 Legislature approved a law which required local governing bodies to develop and implement policies covering frequent flyer benefits for municipal employees and officials. This law was part of the State Auditor's bill in 1992. This law is meant mainly for large cities where lots of out-of-state business takes place and airplane travel trips are common. It is now illegal for employees or officials to receive frequent flyer benefits for personal use when the miles used to obtain these benefits were from a City paid trip. e Until I talked with Marcy VanValkenburg at Elk River Travel, I thought that this law really did not apply to anybody in Elk River and that the Elk River policy would be very simple...if an employee or official receives a frequent flyer benefit, it must be turned over to the City. This will still be the recommendation for an Elk River policy, but the policy will be a little more detailed than this one sentence. After discussing frequent flyers with Marcy, I now understand that over time, one or more City employees may be able to get one or more free airplane tickets that could be used for a future conference/training session. Frequent flyer miles cannot be accumulated by a corporation or a city, but can only be accumulated by an individual. Frequent flyer benefit tickets are transferable. Frequent flyer programs are offered one per airline and, general speaking, the benefit that you get is one free trip within the continental 48 United States per 20,000 miles that has been accumulated. e Lori Johnson, Fritz Dolejs, and myself do most of the travel as City employees. I have flown to six national conferences and if each trip was 3,350 miles per round trip (very unlikely) I would have been able to have one free flight obtained through a frequent flyer program, provided that all the flights were taken with the same airline. If this were the case, I would have received a free ticket to anywhere in the 48 continental United States and this ticket could be used by any City employee or official, as the benefits are transferable. We can not say if the frequent flyer policies will change by the airlines by the time we have actually accumulated miles for this benefit or even if the airline we are using will still be in business. To the best of my knowledge, no City employee has a frequent flyer card which has obtained mileage toward a free trip by P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 . e e using miles traveled on City business and City. If I or the Finance Director learn of any has a frequent flyer card and has been using it then this practice will stop. paid for by the employee that in this manner, It is recommended that the City Council adopt the following frequent flyer policy for the City of Elk River: - All City employees and officials who would typically take one or more air travel trips for City business per year will request a frequent flyer card from the airline most commonly used. - All City employees and officials will attempt to fly the same airlines on trips in attempt to obtain frequent flyer miles and benefits (a free airline ticket). - All City employees and officials who have obtained a frequent flyer benefit (a free airline ticket) through accumulation of miles while on City business and which was paid for by the City, will turn the ticket over to the City (Finance Department). - The Finance Director will distribute the frequent flyer ticket within a reasonable time frame to a City employee or official who is flying to a conference or training session which has a relatively high priced airfare. This will allow for a saving of City funds since the tickets are transferable. - No City employee or official shall used miles accumulated from City travel and paid for by the City to benefit themselves towards a personal frequent flyer free ticket. ..' .-. -I' ". . ......-..~..'.....,....-._...._-,-~ e a/State news ;'. ,'. i~ ~ .Star Tribune/Monday/July 19/1993 Gove'rnment 1.&. ....,.38 ~:; ~, / / I I , l THE MONDAY BRIEFING /1 ~ '. ,...l:'i: e Just plane unenforceable. Law requiring public officials to report flier miles criticized By David Chanen StafTWriter How can a law hailed as a model of good government be considered a failure after only three weeks on the books? , Maybe when it's futile to implement. Nobody is arguing the Minnesota Legislature's logic behind a .new law requiring elected officials or public employees to report bonus or "frequent- flier" miles accrued through travel paid for by public funds. In fact, it was hoped that employees of larger cities such as Minneapolis could pool mileage and obtain free tickets for future business travel. But administrators throughout the state soon found out that airlines wilJ only credit miles to individuals, making enforcement of the law a logistical nightmare. . "The law would make sense if there was . really a way the city could benefit, but nobody does except the airlines," said Minneapolis City Clerk Mary Keefe. Besides the mayor, Keefe said two or three city employees travel enough to earn a free ticket. Miles collected by others will never be used, which she believes takes away a small perk that wasn't a big problem in the first place. "Travel is well monitored, partially due to budget constraints," she said. "The issue of people abusing frequent-flier miles is a phony one." Legislators intended the law to be a safcguard against possible misuse of miles earned at the public's expense. It was passed in 1992 after legislators said they heard stories (possibly anecdotal) of people turning miles accumulated from public business into personal trips. "Until now, there was no law requiring the reporting of miles, so you just hoped people were crediting their departments," Deputy State Auditor Jim Gelbmann said."But I'm sure they all weren't." . Legislators did find some problems with the law, which is why they gave governing bodies a year to figure out how to enforce it, with the d~adline set on July 1, 1993. But with no easy solutions available, some, such as the Winona County Board, simply voted to ignore the state mandate. "We're sick and tired of it," said board Chairman Lester Ladewig. "What good is the policy for a county our size? Maybe it would help Hennepin or Ramsey County, but.. ." As a protest of principle, the board voted 3.-2 against implementing the law. He said county officials rarely travcl by air and it would just create unnecessary bookkeeping. .,.",.,.........,,,,,,',.,.,l':;:,._.,.....,,,,,. "We got a lecture from our county attorney, who said we have to do it. And ' we probably will, eventually," he said. Joel Jamnik, legislative counsel for the League of Minnesota Cities, said public agencies have a policy on record but. won't have specific details on what to do with flier miles. "Several cities have told me they've complied, but for those who are having problems, I don't have the answers for them," he said. "I think the .Legislature should probably repeal the law, but I don't know if it wilJ become a big enough issue." State Senate Secretary Pat Flahaven said, he erroneously believed Minnesota would benefit a great deal from the new law. L. Last month, the Senate Rules Committee spent a long time hashing it over and had trouble coming up with an implementation plan. The' House and Senate do have a preliminary policy. "I've never heard anything about abuse," he said. "Travel restrictions wouldn't allow one person to pile up miles at the . Senate's expense." . While researching the law, Flahaven .found several potential administrative headaches. For example, what if a flight included business and pleasure? How would the miles be separated? , He also came across a. study by American Express which found that only 6 percent , of private companies require employees to report miles. This may be due to the low cost benefits companies would gain through free tickets, as well as the good wilJ they establish with their employees by giving them a perk..