New travel rates for employees of Citizens Property Insurance Corp. won’t apply to board members, but rank and file workers at the company will have lower travel per diem under new rules approved by the board Friday.
Citizens President and CEO Barry Gilway said reducing the daily meal stipend from $60 to $36 and mileage from the federal 54-cents a mile rate to the state’s 44-cents are part of efforts to improve the public perception of an out-of-control company.
Gilway, during the board meeting Friday in Orlando, said the changes are part of on-going efforts to clear up allegations of inappropriate spending and employee behavior so he could focus on improving the overall operations.
"Given the intense pressure and the intense scrutiny that Citizens is under and given the specific recommendations of the Office of Inspector General – their recommendation that we move towards the state standards – my view is I would rather deal with some of the difficulties associated with travel than continue the perception that Citizens is overspending," Gilway said.
A state audit found that between Jan. 1 and Aug. 31 of 2012, Citizens compiled more than $1.3 million in travel-related expenses, of which $454,111 was related to auto travel, $163,625 to airfare and $441,746 for hotel accommodations. Another $138,320 was for meals and $107,751 was billed under room fees.
Citizens officials have defended some of the travel, noting that that international travel sometimes comes with high costs that are hard to avoid. Media reports have highlighted Chief Financial Officer Sharon Binnun upgrading a $459 a night room at a hotel in Bermuda to a $633 a night room and a $918.34 dinner tab by a group of senior managers and board members while in Orlando last June.The new rates go into place April 7, but will not apply to the board members.
Gilway decided not to include the seven board members because they are not employees of the agency and are not paid for their work.
When several board members expressed willingness to be put under the same rules as other employees, Board Chairman Carlos Lacasa said there would be no vote on the issue on Friday.
“You can vote on that after July 31 when I’m no long the chair,” he said.
Lacasa said with Citizens employees working at uncompetitive rates with others in the insurance industry he didn’t want the company run based on media reports.
"We have a fiduciary responsibility to run this company to the best of our abilities," Lacasa said. "We cannot, under any circumstances, ever compromise our principles and our business judgment in carrying out that duty no matter what we’re reading in the papers."
Board member John Rollins backed Lacasa.
"We should not allow the peanut gallery to run this company," Rollins said. "We can’t because the momentum (Gilway) talked about will change in a heartbeat when blue tarps are on the roofs across this state.
"At that point no one will be caring about travel expenses. They will only care about when the adjusters are getting to the house and when will they stop the leaking."
Gilway started imposing restrictions on travel last year.
In October, the daily meal stipend was set at $60 a day and hotel stays limited to $150 a night, as the state-backed insurer faced a backlash following reports of excessive spending by company officials traveling for work.
Prior to those changes, there was no cap, with managers decided if the charges were “reasonable” or “appropriate.”