2004-01-AU Hawai‘i County Police Department Vehicles

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unlike many earlier H CPD studies, offered a strategic law enforcement objective as the basis for the consi derati on and assi gnment of pol i ce cars. J. Summary I n revi eNi ng the many studi es summari zed above, we noti ced two focal , recurri ng concerns. The first concerns inherent employer /employee tension (and ambivalence) surrounding the personal vehi d e al I owance system. W th the excepti on of the Peat, M arwi dc, M i tchel I & Company report and audi t recommendati ons of 1972, none of the studi es undertaken by the H avvai ` i County Pot i ce Department have cri ti cal I y exami ned several key premi ses of the car al I owance/subsi dy pol i cy. The f rst premi se i nvol ves the I ogi c, fai rness and accountabi I i ty — to both pol i ce off i cers and the County — of a uni form negoti aced " al I owance sum" as opposed to an " actual cost" rei mbursement. A s I ong ago as 1972, PM M & Co. auditors al I uded to this problem when recommending reassessment of the " reasonabl eness of the basi c costs i nvol ved i n coveri ng mai ntenance costs, basi c wear and tear, etc." I mpl i ci t i n the present subsi dy system i s the assumpti on that monthl y al I owances, over a peri od of ti me extending up to 8-10 years, cover the cost of purchasing and maintaining a car. However, no document of record actual I y makes that understandi ng expl i ci t. A s a resul t, the al I owance system i nvi tes di spute and i nevi tabl a re- negoti ati on. To i I I ustrate thi s poi nt, a si mpl a cost anal ysd s expressed i n pl ai n I anguage i s offered. Let's say that a county pol i ce patrol offi cer buys a neN car for $20,000 i n 2004. The car meets H CPD requirements. The loan term for the car i s 4 years at 4.29% interest [ per Capitol One A uto Finance] . The officer's monthly car payment is $454.18. To this amount, add monthly mai ntenance ($100), comprehend velcol I i d on i nsurance ($110), and cl eani ng costs ($40), based upon the figures supplied in HCPD' s December 2003 study. The officer's car now costs $704.18 monthl y. A s a patrol off cer, he or she recei ves a $488 /month a1 I owance. Out of pocket, the off cer pays the di fference between the al I owance and the actual cost. That difference amounts to $216.18 monthly or $2,594.16 per year. Over the course of the four -year car loan, the total disparity totals $10,376.64. Thus far, the county car allowance does not equal the actual cost of the offi cer' s car. I n 2008, thi s cost scenari o i s reversed. The car i s pad d off; the off cer no I onger makes a $454 monthl y car pay ment. A ccounti ng for i of I ati on, mai ntenance, i nsurance and d eani ng bi I I s now total $300 monthl y. M eanwhi I e, the off cer Conti nues to recei ve the $488 monthl y al I owance. The difference between the officer's actual costs and the allowance now amounts to a $188 /month positive cash flow. The officer maintains the car for 4 additional years of police service and personal use, as permitted by departmental regulations. Cumulative cash accrued during years 5-8 of the car's I i fe totals ($188x 48 months) $9,024.00. By faithfully maintaining the car for pol i ce servi ce, the off cer has now vi rtual I y made up the di fference ($10,377) of out - of- pocket expenses incurred during years 1 -4. With approval from the police department, the off cer mi ght even extend approved subsi di zed use of the car for another two years. Essentially, the al I owance operates as a deferred compensation system. Based upon the scenario above, the officer's out -of- pocket costs incurred during the payment schedule of the car ($10,377) during years 1 -4 are recouped by positive cash flow ($9,024) incurred during years 5-8. The difference over 8 years amounts to $1,353; averaged over 8 years, the cost of the car to the off cer i s $169 /year. I f the car i s kept 35