HR Strange But True!
September 08, 2011

The city of Clearwater, Florida, thought it was driving retention when it awarded car allowances to employees in addition to their salaries, but it looks like the city drove into a wall of criticism for this action, especially since the city had gone through layoffs of about 15 percent of its employees in recent years.

The negative uproar may have started when the St. Petersburg Times ran a story revealing that the car allowance cost the city $103,000 per year—for 21 employees. The city manager’s allowance comes to about $20 per day.

According to the Times, it was the city manager’s idea to institute the allowances “in order to stay competitive with private employers.” The paper quotes him as saying “It’s all about recruiting and retaining high–quality people … And that requirement is the same no matter the economy.” The mayor told the paper the allowances “were a matter of retention,” and several city council members said they would remain as part of employee contracts, highlighting that turnover in the positions was “virtually zero.”

The problem may not be the allowances, but the cost, which is higher than much larger municipalities. And adding fuel to the fire is the fact that Clearwater pays for the purchase, gas, and upkeep for 146 vehicles that city employees are allowed to take home without accounting for mileage, although some employees pay a “commuter fee” for travel outside the city.

Although car allowances have been given since 1999, the Times article has elicited a lot of commentary from local citizens because some rank-and-file employees gave wage concessions, and the allowances are given to the highest-paid management employees.


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