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					                                   Motor Vehicle Policy Review - 31st January 2007



Motor Vehicle Policy

Introduction

The aim of this policy is to set out the conditions and processes that surround the provision of
motor vehicles at Council. This policy includes information relating to the types of vehicles
available to Council staff and also details the process for the replacement of Councils vehicles.

Through the introduction of this policy Council aims to achieve the following outcomes:

·        Improve fleet environmental sustainability by promoting the use of low emission,
         fuel-efficient vehicles;
·        Manage the risks associated with the fleet through greater diversity;
·        Allow employee’s greater flexibility in meeting their individual needs, balanced
         against corporate requirements, in consultation with their relevant Manager;
.        Allow employees to make choices in vehicles, understanding the environmental
         impacts.

Environmental Sustainability

Council is committed to minimising the environmental impact of the motor vehicle fleet.
The following fleet management approaches will be applied in this respect:

     • The use of low emission, fuel-efficient vehicles will be promoted by offering a
        choice of small and mid size vehicles to staff;
     • The vehicle procurement process will include an assessment of all vehicles using
        the Federal Government’s ‘Green Vehicle Guide’. Wherever possible, Council will
        aim to purchase vehicle models with superior emissions standards and fuel
        consumption ratings;

Fleet Classifications

The following fleet classifications are proposed to meet the above desired outcomes:

     •    Benefit Vehicles met by:
             − Council’s Choice Scheme, or
             − Novated Lease

     •    Tool of Trade Vehicles

The following policy addresses how Council provides vehicles to employees and the different
options available to employees.

Council currently provides two types of vehicles, a benefit vehicle and a tool of trade vehicle.
The following defines these:




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Vehicle Classification
Benefit Vehicle                    A vehicle for which private use is available to the employee and for
                                   which the employee has an amount deducted from their salary in
                                   recognition of the private use component.
 Tools of Trade Vehicle            A vehicle, which is used primarily for business purposes, and
                                   where private use is generally confined to commuter use.

Those persons identified as having a benefit vehicle will be allowed to participate in Council’s
Choice Scheme and the General Manager, Directors, Managers and identified positions, will be
able to have access to either the Choice Scheme or a Novated Lease.


A.        Council’s Choice Scheme

Types of Vehicles Available to Staff

The types of vehicles available to staff will be as follows:

Utilities:                              4 or 6 cylinder, depending on usage;

Mayor & General Manager:                Holden Caprice or equivalent;

Directors:                              Holden Berlina or equivalent;

Managers & Staff:                       Options of vehicle sizes as listed below. Managers also
                                        have the choice to enter into a Novated Lease. For further
                                        information relating to Novated Leases, please see the
                                        section within this policy titled ‘Novated Leases’

Special Use Vehicles:                   As required from time to time on an as needs basis and as
                                        per budget allocations.


Replacement & Disposal of Vehicles

The preferred replacement policy for vehicles will be in the following range:

Sedans / Wagons:               9 months / 15,000 klms up to 2 years / 40,000 klms

Utilities:                     9 months / 15,000 klms up to 2 years / 40,000 klms

Please note that this is the preferred vehicle replacement range, however the Fleet
Services Manager may make recommendations to management that vary from the above
on a case by case basis as required, to ensure that Council achieves maximum return.

Please be aware that there is no set time or number of kilometres when Council must
replace vehicles. All vehicle movements and trades are subject to market forces
applicable at the time and this may result in vehicles being held for longer than the
periods stated above in order for Council to achieve maximum financial return. The
timing of changeovers will be based on proper assessment of the following:



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       -       General market conditions
       -       Local market conditions
       -       Model release dates
       -       Pending price increases from dealers
       -       Warranty conditions
       -       Capital and whole of life costs
       -       Government contract requirements (if any & if applicable)
       -       Special deals available at the time

As defined in the Introduction to this policy only those employees who have a benefit vehicle will
be allowed to have access to the Choice Scheme under this policy. This may only be varied
upon application to the General Manager.

Employees will have the option to elect a different vehicle type at the next available
changeover, however the choice of make and model of vehicle within each vehicle type
will be the decision of the Fleet Services Manager in line with current market trends and
economic viability as per the conditions listed above.

Disposal of vehicles will be conducted via one of the following methods:

•     Buy Back

•     Trade-in

•     Direct Sale or

•     Auction


Vehicle Types

Council will provide six (6) choices of different vehicle types:

•     Small Car (4 cylinder) (example: Holden Astra / Mitsubishi Lancer)

•     Medium Car (4 cylinder) (example: Hyundai Sonata / Toyota Camry)

•     Large Car (6 cylinders) (example: Ford Falcon / Holden Commodore) Please note that vehicle
      selection may be based on a preference towards LPG vehicles.

•     Small / Mid Range 4 Wheel Drive (example: Nissan X-Trail)

•     Medium 4 Wheel Drive (example: Subaru Forrestor / Ford RWD Territory)

•     Large 4 Wheel Drive (6 cylinder)

•     Utilities

•     Dual Cabs - (Employee Choice Vehicle)




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•     Dual Cabs - (Tool of Trade Vehicle)

If more seating capacity or other special needs are required an application could be made to the
 General Manager for access to a Novated Lease. To promote the use of smaller vehicles,
 Council will purchase and replace roof racks on 4 cylinder vehicles to offset any loss of carrying
 space that would otherwise be available in larger models.

Leaseback Rates

In general, leaseback rates will be reviewed annually in May, with any changes implemented by
the General Manager from 1 July of that year. However, further changes to leaseback rates may
be made at any time throughout the year if it is determined that market conditions have altered.

The leaseback rates are as follows:

•     Small Car - $33.15

•     Medium Car - $48.00

•     Large Car - $68.40

•     Small / Mid Range 4 Wheel Drive - $68.40

•     Medium 4 Wheel Drive - $75.90

•     Large 4 Wheel Drive - $91.30

•     Utilities - $55.90

•     Dual Cabs - $75.90 (Employee Choice Vehicle)

•     Dual Cabs - $68.40 (Tool of Trade Vehicle)




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Council Choice
     MOTOR VEHICLE AGREEMENT
     Private (Leaseback) Use


The following conditions are applicable only to motor vehicles allocated to Salaried Staff and
Supervisors/Coordinators.


1.     Private use of motor vehicles by Council staff may be authorised by the General Manager,
       subject to the employee entering into a formal lease back agreement detailing charges and
       conditions of use. Contributions for private use will be made by way of payroll deduction.

2.     Although motor vehicles may be allocated to individual staff members, the vehicles remain
       part of the vehicle pool and must be available for day-to-day Council use when required.

3.     Council will review the lease back fee on an annual basis, having regard to operating
       costs, and on an ad-hoc basis in response to changes in taxation which impact on costs
       associated with the private use component. (See Annexure A for charges)

4.     Participants in the council choice scheme will be entitled to undertake private travel of up
       to 25,000 km per year as part of the lease back agreement. Private travel in excess of this
       amount will be charged for on a per kilometre basis, at a cost determined annually by
       Council. (See Annexure A for charges)

5.     Supervisors/Coordinators and Ordinance Officers who regularly take a Council vehicle
       home so that they may respond to "out of hours" emergencies and do not wish to
       participate in the leaseback system shall not be levied a charge for commuter use.

6.     Council will meet the costs associated with servicing, maintenance, registration and
       insurance and subject to clause (4) above, fuel for all usage.

7.     Private use during periods of annual leave, long service leave or extended paid sick leave
       will be permitted for continuous periods up to 3 months duration, subject to the provisions
       of clauses 8 & 9. Only the General Manager may approve conditional private use, for
       periods of leave in excess of 3 months duration.

8.     Private use during any period of leave immediately prior to resignation or retirement shall
       only be permitted with the approval of the General Manager.

9.     Council is to be under no obligation to provide an alternative vehicle where the vehicle
       allocated is required elsewhere on Council business, under repair or unavailable for any
       other reason.




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10.    Where Council retains a vehicle for operational reasons during a period of leave, or the
       vehicle is unavailable for any other reason (e.g repairs, council business etc) for a period in
       excess of 5 working days, Council will suspend the leaseback contributions for the relevant
       period.

11.    Leaseback vehicles shall be driven only by the employee, or the spouse/partner of the
       employee. Where the employee travels as a passenger, any other competent, licenced
       person may be permitted to drive the vehicle.

12.    In the event of cancellation, suspension or non-renewal of an employee's driver’s licence,
       this agreement will be cancelled.

13.    Vehicles are not to be used for motor sport, off-road use (other than 4WD's), commercial
       purposes, or by learner drivers.

14.    Accessories, other than those detailed in the motor vehicle tender specification, shall only
       be fitted with the General Manager's approval and at the employee's expense. Where the
       same accessories are required on a subsequent vehicle, Council will bear the cost.

15.    Log books are to be completed on a daily basis and must accurately reflect vehicle usage.
       Details of fuel purchases are to be entered in logbooks at time of purchase and receipts
       are to be submitted with weekly vehicle sheets.

16.    The lessee is responsible for the vehicle being regularly cleaned (interior & exterior), fluid
       levels and tyres checked and arranging servicing at specified intervals.

17.    Wherever practicable, vehicles are to be "garaged" off street at the employee’s residence.

18.    Motor vehicle usage is subject to the provisions detailed in the "Council Vehicles" Section
       of the Employee Handbook. This section also prescribes motor vehicle accident
       procedures. Failure to comply with these provisions may result in disciplinary action.

19.    An approved Council insignia is to be fitted to the left hand side rear window at all times.

20.    The vehicle is to be returned to Council immediately on termination of employment for any
       reason.

21.    You are required to obey all traffic and parking laws, with any infringements being your
       responsibility. You cannot seek legal protection or reimbursement from Council for any
       penalty incurred.

22.       Smoking is not permitted within the vehicle at any time, by yourself or passengers.

23.    Council will not accept liability for damage to a Council or other motor vehicle, plant item or
       other property, or injury to any third party incurred by an employee driving with a



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        percentage of alcohol, or illegal drugs in excess of the percentage permitted by NSW law.
        All such liability shall rest with the employee concerned.

24.     An employee may terminate the leaseback/commuter use arrangement on the provision of
        one weeks notice in writing.

25.     The General Manager retains the right to immediately cancel the leaseback or commuter
        use agreement where the employee fails to comply with the conditions prescribed by the
        agreement, or for disciplinary reasons. In all other instances, the employee will be given
        six (6) months notice in writing of Council's intention to revoke the lease back or commuter
        use agreement.


I accept the preceding conditions and understand that failure to comply with them may result in
withdrawal of the vehicle and / or disciplinary action.


Signed:          _____________________________


Print Name:      _____________________________


Date:            _____________________________




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                              Motor Vehicle Policy Review - 31st January 2007




  MOTOR VEHICLE AGREEMENT
"Annexure A"
Type                                                 Round GST Inclusive
                                                     Price Type Round GST Inclusive
                                                     Price
Full Private                                       •    Small Car - $33.15
(Leaseback)                                        •    Medium Car - $48.00
                                                   •    Large Car - $68.40
                                                   •    Small / Mid Range 4 Wheel Drive - $68.40
                                                   •    Medium 4 Wheel Drive - $75.90
                                                   •    Large 4 Wheel Drive - $91.30
                                                   •    Utilities - $55.90
                                                   •    Dual Cabs - $75.90 (Employee Choice
                                                        vehicle)
                                                   •    Dual Cabs - $68.40 (Tool of Trade Vehicle)

Utilities                                            $49.90
Per Kilometre Rate in Excess of 25,000 pa            $0.14
Private kms


Motor Vehicle Agreement
Application is made for private (leaseback) use of a Council motor vehicle. I,
………………………………………………………………accept the preceding conditions of use,
which I understand may be subject to amendment from time to time.

Authority is given for weekly contributions as determined periodically by Council, to be made by
way of payroll deduction effective from……………………………………………...

Signature of applicant: _______________________________________ Date: _____________

Recommended by Director: ___________________________________ Date: _____________

Approved by General Manager: ________________________________ Date: _____________


Office Use Only

        Copy to Applicant           Application Completed                       Copy to File
        Copy to Payroll
Plant Superintendent: _____________________________________ Date: ______________




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B.        Tool of Trade Vehicle Policy

A Tool of Trade Vehicle is a vehicle, which is used primarily for business purposes and where
private use is confined to commuter use (travel to and from work only).

Subject to the following conditions, you are offered the use of a Tool of Trade Vehicle, in relation
to your position of ___________________________

Conditions

1.        You have a current drivers licence, at the required class to drive the vehicle.

2.        Where an employee is required to contribute for commuter use, payment will be made by
          way of payroll deduction.

3.        The vehicle is to be parked off the street, where practicable.

4.        You are responsible for checking fuel; oil, water, battery, tyres etc. on a regular basis and
          for maintaining both the interior and exterior of the vehicle in a clean and well maintained
          condition.

5.        You are required to drive directly to and from your worksite/place to your place of
          residence, minor deviations of up to one (1) km which extends the direct journey by no
          more than 10 minutes, may be permitted to make minimal purchases e.g.; milk, bread,
          newspaper.

6.        Apart from to and from the worksite and your place of residence, the vehicle is not to be
          used for any private purposes including the transport of non-employees.

7.        In the event of cancellation, suspension or non-renewal of your driver’s licence, this
          agreement will be terminated.

8.        Smoking is not permitted in the vehicle by yourself, or any passengers.

9.        You are responsible for the security of any equipment, tools etc., normally carried in the
          vehicle, when it is under your care and control.

10.       It is your responsibility to ensure that the vehicle is available for Council purposes as
          required, at the appropriate starting time, during periods of leave (including time in lieu,
          RDOs, annual, long service, sick, carers, LWOP or any other form of leave available
          under the relevant industrial instrument).

11.       Council is under no obligation to provide an alternate vehicle in the event of the vehicle
          normally allocated, for travel to and from work, being required elsewhere on Council
          business, under repair or unavailable for any other reason.

12.       You are required to obey all traffic and parking laws, with any infringements being your
          responsibility. You cannot seek legal protection or reimbursement from Council for any
          penalty incurred.



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13.       An approved Council insignia must be fitted to the vehicle (in a visible place).

14.       No person, other than an authorised employee, is permitted to drive the vehicle.

15.       The vehicle is to be returned to Council immediately prior to termination of employment
          for any reason.

16.       Council will not accept liability for damage to a Council or other motor vehicle, plant item
          or other property, or injury to any third party incurred by an employee with a percentage
          of alcohol or drugs in excess of the percentage permitted by NSW law. All such liability
          shall rest with the employee concerned.

17.       Travel to and from work may be withdrawn at any time should circumstances warrant, or
          the employee fails to comply with the conditions prescribed by the policy, or for
          disciplinary reasons.

18.       Should you have an accident you are required to follow the procedures outlined in the
          Employee Handbook.

19.       Variations to this agreement may be granted for limited periods (up to a maximum period
          of one (1) month). Requests must be in writing to the relevant Director, outlining the
          reason. Only once written approval has been obtained is an employee permitted to vary
          this agreement. Copies of all approvals (must state approval period) and must be placed
          on the employee’s personnel file.

20.       Restricted private use is available to the employee at no cost during a period of “on-call”,
          within Council’s area of operations only, and within response timeframes required by On-
          Call Policy.

I hereby accept the conditions above and understand should I breach any of the conditions I
may be subject to disciplinary action, which may include dismissal.


Signed:

Print Name:

Date:



Manager’s Signature:

Manager’s Name:

Date:


This agreement is to be placed on the employees personnel file.




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C.        Novated Lease

What is a ‘Novated lease’?
A Novated Lease is a three-way agreement between the employee, the employer and a lease
company. The basic principles of a Novated Lease are:
     •    The employee leases the vehicle directly from a lease company.
     •    The employee, employer and the lease company sign a Novation Agreement.
     •    The employer undertakes to cover all agreed vehicle expenses during the employee’s
          term of employment.


General
Eligible employees will be offered the opportunity to enter into arrangements for the provision of
benefit vehicles outside of the Council fleet choices.

Such arrangements will allow employees flexibility in their choice and the ability to develop
equity in the vehicle.

Any eligible member of staff who chooses to take advantage of this policy will be entitled to an
increase in their remuneration package to facilitate the exercising of the policy.

The amount added to the package of an employee is listed in the table below. This is the
amount that has been calculated as the net cost to Council for the provision of a current fleet
vehicle:

YEAR                                                   AMOUNT
November 2006                                          $11,103.80

Employees are referred to the Novated Lease procedure for more detail on the associated steps
involved in novated leasing. (Refer Attachment 2)


Operating principles
Employees are encouraged to, and are responsible for; seeking independent financial advice on
whether entering into a novated lease arrangement is beneficial in their individual
circumstances.
As there are very specific conditions applying to the initiation, approval and cessation of the
lease, it is the employee’s responsibility to be aware of these conditions.
Any lease company will organise the Novated Lease process from start to finish. They will
provide all required information, prepare lease quotations, source new motor vehicles if
appropriate, prepare all required documentation, and other associated services at the request of
the employee.




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Process
1.   Employee to make application to the General Manager for access to a Novated lease
     arrangement.
2.   Upon approval from the General Manager the employee to obtain independent financial
     advice as to the suitability of this arrangement for their personal circumstances.

3.      Employee to obtain quotes for supply of vehicle from dealer and also discuss financing
        options with appropriate lease companies.

4.      Employee to decide if a novated lease is appropriate for personal circumstances and
        advise the General Manager in writing of the employees acceptance of a novated lease
        agreement. The employee should include in this a statement that independent advice has
        been sought in the consideration of a novated lease.

5.      Employee to finalise associated packaging of salary. These costs include lease payments,
        running costs and FBT. (Details to be completed on Novated Lease form)


Indexation
Council’s contribution to the vehicle will be indexed each year by the Award increase allowable
to the employee. That is the total remuneration package will be increased annually by the award
increase.


Insurance
All vehicles must have individual comprehensive insurance cover. This is a requirement of the
parties to any financing arrangement.


Fringe Benefits Tax and Salary Package Reconciliation
The FBT payments will be calculated based on your estimated kilometres and a provision toward
FBT will be deducted from the salary package. An annual package review will be undertaken
and any liability will be deducted from the next available package or any credit will be
reimbursed in the next available pay.


Information for Employees on FBT and Motor Vehicles is attached here.




Business Use of Vehicles
Those employees who exercise this policy are expected to utilise their vehicle for their business
use. Employees will not be able to access other fleet vehicles for business purposes.
Vehicles acquired under this policy will not be required to be made available for general
business use by other Council employees unless approved by the employee who acquired the
vehicle.



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Arrangements for Periods of Leave Without Pay (LWOP)
Prior to any period of LWOP, the employee must make arrangements with the Finance Manager
for payments to be made during the leave. If this is not arranged Council may terminate the
novation agreement and all payments, including the running costs, will then be the responsibility
of the employee.


Arrangements on Cessation of Employment
In the event of cessation of employment with the Council, the Council will notify the lease
company in writing, this will discontinue the sub-lease and novated agreement. All future
payments and expenses for the vehicle will be the employee’s total responsibility.
A proportion of lump sum final payments will be held until the lease company forward the final
lease account (excluding FBT/fuel reconciliation). This amount will be equivalent to 2 months pro
– rata costs.

Council will complete a reconciliation of outstanding lease and fuel payments and make
allowance in your termination payment for all costs to be met.




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      ATTACHMENT 2

Novated Lease Procedure

The following procedure is for employee’s wishing to take up the novated lease option offered by
Council. Some of these issues are covered specifically within Council’s policy and are merely
duplicated here so employees know the full procedure. Employees should refer to the Council
policy for the other operating parameters.

1.         Employee to make application to the General Manager for access to a Novated lease
           arrangement.

2.         Upon approval from the General Manager the employee to obtain independent financial
           advice as to the suitability of this arrangement for their personal circumstances.

3.         Employee to obtain quotes for supply of vehicle from dealer and also discuss financing
           options with appropriate lease companies.

4.         Employee to decide if a novated lease is appropriate for personal circumstances and
           advise the General Manager in writing of the employees acceptance of a novated lease
           agreement. The employee should include in this a statement that independent advice
           has been sought in the consideration of a novated lease.

5.         Employee to finalise associated packaging of salary. These costs include lease
           payments, running costs and FBT. (Details to be completed on novated lease form).

6.         Employee to request Financial Services to generate ‘Official Council Order’ for vehicle.
           Order to include the following details:

                        Details of the vehicle to be purchased.
                        A statement that the vehicle is being purchased for the purpose of a
                        Novated Lease.
                        A statement the vehicle will be paid for by ‘XXX’ Finance Company.
                        A statement that the vehicle is to be registered in the Employee’s Name.

7.         Financial Services to provide employee with ‘Official Council Order’ for vehicle for
           delivery to dealer.

8.         Financial Services to delete order from ordering system.

9.         Employee to formalise Novated Lease with Finance Company.

10.        When vehicle is ready for delivery employee to provide Novated Lease document to the
           Manager, Financial Services for checking and to arrange signing by the General
           Manager. The Manager, Financial Services to return completed lease to employee for
           return to Finance Company.

11.        Employee to take delivery of vehicle and return Council vehicle to his/her Director.

12.        Employee to provide Manager, Financial Services with Direct Debit form from finance
           company for completion and return to employee then finance company.


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13.        Manager, Financial Services to arrange fuel card.

14.        New salary package arrangements to commence.




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