The City of Hillsboro may stop providing cell phones to employees deemed to need a cell phone; instead, the city would provide a monthly allowance to those employees.
City Administrator Larry Paine discussed the issue with City Council members during a public work session Tuesday following the regular council meeting. There are 21 employees issued phones, including Paine.
The IRS considers cell phones a benefit to employees that must be taxed, he said. Tracking the information necessary for to do that would complicate bookkeeping.
The IRS has audited several cities and assessed thousands of dollars in back taxes and penalties, Paine said.
Transferring ownership of the phones to those employees and providing them an allowance for cell phone use would simplify the paperwork involved.
“In the long run, we can save some money,” Paine added.
In order to receive the allowance, the city could require employees to sign an agreement not to use the phones for personal calls on city time and to be available to contact via the phone at any time.
Council member Kevin Suderman asked if the employee handbook includes a cell phone use policy. Paine said it does not, but one could be added.
Council member Shelby Dirks said he supported the allowance plan and trusted Paine to determine an amount to propose to the council. Council member Bob Watson said a plan could include separate amounts for department heads than other employees.