HomeMy WebLinkAbout03-002RESOLUTION NO. 03-002
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PORT TOWNSEND, WASHINGTON
AUTHORIZING CITY MANAGER TO PAY VOLUNTEER
FIREFIGHTERS' FICA/FUTA CONTRIBUTION
WHEREAS, the City Finance Department received information at a recent
training seminar that the City's practice of treating the volunteer firefighters as
"contractors" (and not withholding social security/FICA from their pay) instead of
treating them as "employees" (who are subject to FICA withholding) is not consistent
with IRS regulations; and
WHEREAS, under IRS regulations, the City, as the employer, is responsible for
paying the employer FICA portion and withholding the employee's FICA contribution;
and
WHEREAS, employer's failure to withhold the tax creates employer liability to
the IRS for the employer and employee's FICA; and
WHEREAS, the total (employer and employee) amount of FICA for the current
period 2002, and past three years (1999-2001), is $15,138.96. Of that amount, one half or
$7,569.48 is the City's contribution as employer, and one half or $7,569.48 represents the
employee's contribution; and
and
WHEREAS, the City is also liable for approximately $2,000 (total) in FUTA;
WHEREAS, it is the City Manager's recommendation that the City (1) pay the
full amount to the IRS now, since by law that is the City's obligation, and (2) not pursue
recovery from volunteers of their FICA portion ($7,569.48) or FUTA based on the
following:
1. the difficulty and expense of attempting to collect the relatively small
amounts from current and former volunteers, particularly former volunteers;
2. the inequity of more likely collection from current volunteers versus the
less likely possibility of collecting from volunteers no longer with the City; and
3. the possibility that collection may trigger volunteer ill will and/or
separation from service, and thereby disrupt or negatively impact an already delicate fire
service morale.
1 Resolution 03-002
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Port Townsend, that City Council authorizes the City Manager to pay the unpaid FICA,
and FUTA, representing the City and volunteers' contributions, and not pursue recovery
of amounts representing volunteer contributions.
ADOPTED by the City Council of the City of Port Townsend at a regular
meeting thereof, held this sixth day of January, 2003.
Kees Kolff, May~3 (
Attest:
Pamela Kolacy,
City Clerk
Approved as to form:
John P. Watts
City Attorney
2 Resolution 03-002