Subject: UNIVERSITY VEHICLES AND RELATED VEHICLE EXPENDITURES

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1 Policies on Specific Commodities/Services Number: 5.08 Subject: UNIVERSITY VEHICLES AND RELATED VEHICLE EXPENDITURES ENCOMPASSING Vehicle Acquisition, Vehicle Disposal, Fuel Purchases, Repair and Maintenance, Insurance & Accident Claims, and Personal Tax Benefits POLICY Purpose: To establish detailed Purchasing Policy and Procedures relating to "University Vehicles and Fuel/Maintenance Credit Cards". Scope: This policy applies to all University Vehicle acquisitions (purchased or leased), vehicle sales or disposal, and Fuel/Maintenance Credit Cards, chargeable to any funds administered by the University. DEFINITIONS University Vehicle: Any on-road or off-road vehicle purchased or leased in the name of the University through funds administered by the University that, in accordance with the laws of the Province of Quebec, requires it be registered through the Société de L'assurance Automobile du Québec, and any vehicle which meets the same criteria but is situated outside of Quebec. Non-Dedicated Vehicle: A vehicle which is assigned to a department/unit for use by any employee of McGill University (herein referred to as Employee) to fulfil his/her duties. Private Vehicle: A vehicle which is dedicated for individual use only. Vehicle Operator (herein referred to as the Operator): Authorized person driving/operating the University Vehicle. The Fleet Management Coordinator (herein referred to as the FMC): The University Purchasing Services or a Fleet Management Firm selected by University Purchasing Services through a formal competitive bid process contracted to render services related to acquisition (purchase or lease) and disposal of vehicles. The Fleet Services Firm (herein referred to as the FSF): A Fleet Management Firm selected by the University Purchasing Services through a formal competitive bid process contracted to render administrative services related to the purchase of fuel and maintenance requirements. Fuel/Maintenance Credit Card: A credit card issued by the FSF for a given vehicle for purchases of fuel and maintenance requirements from major service centers as part of the FSF's national account in Canada and the United States. Update May 12, 2004 Page 1 of 9

2 Fleet Coordinator: The University Employee designated to coordinate the day to day activities relating to University Vehicle(s) within a specified department/unit. RESPONSIBILITIES The University Purchasing Services: Development of vehicle management policy and procedures; Monitoring policy conformance; Selection of the FMC and FSF through a formal competitive bid process; Coordination of procurement and disposal of vehicles; Development of fuel/maintenance management program; Assessment of the program for continuous improvement. Fleet Coordinators: Administration of vehicles on a day to day basis; Coordination of lease contracts; Audit of invoices (purchase, rental, disposal, fuel and maintenance); Short term lease arrangements; Liaison between Operator and the FMC and/or FSF; Renewal of registrations and license plates; Preparation of list of authorized Operators; Tracing traffic infractions. Risk Management and Insurance Department (herein referred to as the Risk Management Department): Development of insurance policy and procedures applicable to University Vehicles; Monitoring the application of the University Automobile Insurance Policy and Procedures throughout the University; Selection of an insurance carrier; Coordination of accident claims. Payroll and Budget Department: Calculation and reporting of taxable benefits. University Secretariat/Instructional Communication Centre: Establishing the standards relating to the University Wordmark and Insignia. PERTINENT CONTACTS Purchasing Services: Anna Gentile Risk Management and Insurance Department: Ellen Kingsley Payroll and Budget Department: Mavis Smith APPROVAL PROCESS Prior to purchase or lease of any vehicles and/or prior to obtaining any related Fuel/Maintenance Credit Card(s), written approval is required from the Dean or Director of the area concerned, and the Vice-Principal to whom the area reports. Update May 12, 2004 Page 2 of 9

3 Note: When a vehicle purchase or lease is requested for use by a Vice Principal, the written approval of the Principal is required; When a vehicle purchase or lease is requested for use by the Principal, the written approval of the Chair of the Board of Governors is required. ELIGIBILITY Scope The Vehicles owned or leased by the University may be operated only by University Employees and may not be used for personal purposes except where otherwise expressly permitted by the written approval of the Dean or Director and the Vice-Principal in accordance with the "Approval Process" section of these Guidelines and Procedures. The Operator of record will be held responsible for unauthorized use of any University Vehicle. Qualification of the Operator The Operator must possess a valid, unrestricted driver's license or permit; He/she must have an acceptable previous driving record. The University reserves the right to verify Operator's driving record if necessary and Operator hereby gives the University permission to do so. Personal Use of a University Vehicle Except where otherwise expressly permitted by the written approval according to the "Approval Process" section of these Guidelines and Procedures, Vehicles owned or leased by the University may not be used for personal purposes. Where in exceptional circumstances such use is authorized, the following holds valid: The value of the personal use must be reported as a taxable benefit. Each Employee will be required to have a fixed amount of taxes withheld each pay in addition to regular taxes on salary for the personal use of the University Vehicle. The amounts which are determined by the Payroll and Budget Office will be deducted from the Employee's pay. Cancellation of these deductions due to a change in status and exclusion from an assigned vehicle may be accomplished by a written confirmation from the Dean or Director of the department/unit to the Payroll and Budget Department; The cost of gas and travel expenses, for personal use, are not to be charged to the University; The Operator should contact the Risk Management Department in order to determine the extend of coverage under the University's Automobile Policy with respect to personal use and his/her liabilities in case of an accident. If an unauthorized Operator is involved in an accident, he/she is fully responsible for all the damages. Update May 12, 2004 Page 3 of 9

4 AUTHORIZED VEHICLE/EQUIPMENT Vehicle Selection The make and model of a new vehicle will be recommended by Purchasing Services taking into consideration the intended use of the vehicle, user's preferences as and where appropriate, and availability of funds. The selection of a new vehicle must be according to the following criteria: Unless otherwise expressly authorized in writing in accordance with the "Approval Process" section of these Guidelines and Procedures, only North American manufactured vehicles are permitted to be purchased or leased; The selected options and equipment on a new vehicle must contribute to the functionality and safety attributes of a vehicle. The University does not permit any equipment which is considered "Cosmetic" as part of the University Vehicles. However, Employees who have been allocated a Private Vehicle may, at their own expense, add "Employee Paid Options" to a new vehicle. In this event, the Employee is required to submit a cheque, payable to McGill University, in the amount as determined by Purchasing Services, with the order requisition. The cheque will be cashed at the time the Operator receives the vehicle. Such options become an integral part of the vehicle. The cost of such options is non-refundable upon transfer, termination or disposal of the vehicle. Color Selection All vehicles owned or leased by the University (other than Private Vehicles expressly authorized according to "Approval Process" section of these Guidelines and Procedures) must be standardized in appearance as follows: Exterior color of the vehicles shall be "White" (to standardize color, maximize resale value and to minimize paint refinishing costs relating to removal of the McGill University decals); The name of the University, McGill insignia and the name of department (optional) to appear on the University vehicles must be according to Policy on Use of the Wordmark and Insignia of McGill University. NEW VEHICLE New vehicle Order Processing Request for procurement of a new vehicle along with an approval in principle must be submitted to Purchasing Services on the Preliminary Vehicle Acquisition Form. Upon selection of a vehicle (i.e. make, model, and options), potential supplier and determination of the final cost of the vehicle, a Banner Purchase Requisition must be submitted to Purchasing Services for order placement. New Vehicle Delivery The dealer contacts the Fleet Coordinator when the vehicle is ready for delivery. The dealer furnishes the Fleet Coordinator/Operator with all documents - such as registration, license, owner s manual and warranty book at the time of order delivery. As required, the FSF driver s manual including Fuel/Maintenance Credit Cards, maintenance location guides and preventive maintenance schedule are forwarded to the Fleet Coordinator prior to delivery of the new vehicle. Update May 12, 2004 Page 4 of 9

5 It is the responsibility of the Fleet Coordinator/Operator to ensure that: He/she contacts the dealer to make arrangements for pick up; He/she verifies that the vehicle is equipped exactly as specified. No extra equipment or costs are to be accepted without prior written consent from Purchasing Services. He/she advises the Risk Management Department of the scheduled delivery date of the vehicle. Proof of insurance is mandatory prior to licensing. He/she arranges for primary Operator to test drive and inspect the vehicle. Delivery of a vehicle with minor discrepancies may be accepted providing all discrepancies are stated on the delivery receipt and the dealer has made arrangements for correction; In the event of major discrepancies (i.e. wrong colour, number of doors, etc.) he/she contacts the Purchasing Services immediately, and refuses delivery; He/she makes sure that license plates, all necessary ownership documents, the warranty and owners manual are received. DISPOSAL OF OLD VEHICLE Employee Purchase of a Used University Vehicle Should there be any Employee interested in purchase of a used University Vehicle, Purchasing Services will address the issue at the time of replacement or disposal. Any purchase of a used University Vehicle must be at, as a minimum, the fair market price as determined and offered to the University by independent third parties. University Vehicles purchased by the Employees are subject to these conditions: Purchase is "as is" and price is final; Payment must be by certified or cashier's cheque as per instructions by Purchasing Services; Cheque to be sent to the Purchasing Services with Employee's full name and home address, including the vehicle's last odometer reading; Ownership papers will be made out in the name of the Employee; The vehicle being purchased cannot be released until the replacement vehicle is delivered; When the Employee receives the ownership papers, he/she must secure the appropriate insurance, register the vehicle and place ownership in his/her name. The University insurance and registration cannot be extended under any circumstance. Disposal If the vehicle is not sold to the University Employee, the Fleet Coordinator must notify Purchasing Services of the location of the vehicle to be disposed of. Normally, the FMC is notified by the delivering dealer that a used vehicle has been dropped off. The FMC will make arrangements for pick up and disposal of the vehicle. Update May 12, 2004 Page 5 of 9

6 Used Vehicle Condition Just prior to accepting delivery of a new vehicle, the primary Operator shall ensure that all personal belongings are removed from the old vehicle. When vehicles are turned in, the dealer accepting the old car will prepare a Used Car Condition Report which is forwarded to the FMC. Fleet Coordinator/Operator must verify all conditions stated in the report upon presentation by the dealer and sign only after the report is completed as acknowledgement of the vehicle's actual condition. Repairs Prior to Disposal After a vehicle Replacement decision is confirmed with the FMC, no repairs are to be made to the existing vehicle without the approval of Purchasing Services. IMPORTANT: The University will make only urgent "safety related" repairs immediately prior to disposition of any vehicle whether disposed of through the FMC or by sale to an Employee. PREVENTIVE MAINTENANCE, REPAIRS & WARRANTY Maintenance Credit Cards Each vehicle is assigned a Maintenance Credit Card issued by the FSF which is acceptable at all National Account locations as listed in the FSF driver's manual. This card may be used only for service or repairs on the assigned vehicle. The Operator can take the University Vehicle to any National Account location for service/repair. Prior to the repair facility starting any repair work, the Maintenance Credit Card must be presented to the service person. For all maintenance charges over $50.00, the service person must call the FSF for an authorization before any work is performed on the vehicle. The FSF will not honour any unauthorized maintenance work. When the work has been completed, the work order must be reviewed by the Operator to ensure that only the proper repairs were performed. If there are discrepancies, the work order should not be signed. The FSF must be notified immediately and they will resolve the situation directly with the repair facility. If the work and charges are correct, the Operator signs the work order and retains a copy for records only. The FSF will remit payment to repair facility upon receipt of the invoice and will charge back the University. IMPORTANT: The FSF should be contacted immediately if any dealer or independent shop does not recognize the FSF Maintenance Credit Card. Preventive maintenance Vehicles are to be serviced at regular intervals to insure that they are safe and operational. Properly maintained vehicles will add to the safety of the Operator and any passenger and will command maximum value at disposal time. Update May 12, 2004 Page 6 of 9

7 Warranty Repairs Warranty repairs can only be performed by an authorized manufacturer's dealership. The Operator should exercise particular care to make sure that no charges are incurred for those items that are covered by the warranty. However, if in doubt or when there is a difference of opinion with the dealer in this matter, the Operator is recommended to contact the FSF for assistance. Tire Replacement As tires wear out, they are to be replaced with equivalent tires (no upgrades). The purchase of replacement tires must be authorized by the FSF. Odometer reading will be taken into consideration when tire replacement arises but safety is the first concern. Fuel Purchases Each vehicle is assigned a Fuel Credit Card by the FSF which is accepted by the fuel suppliers whose logos appear on the back of the Fuel Credit Card. This card allows the Operator to use one credit card to purchase fuel requirements from any one of several major petroleum service centers. IMPORTANT: The Fleet Coordinator/Operator must notify the FSF (Daniel Faucher from Purchasing Services at ) immediately by fax if a Fuel/Maintenance Credit Card is lost or stolen. All Fuel/Maintenance Credit Cards issued to or held by University Employees must be returned by them to the University's Purchasing Services when the vehicle is disposed of. In the event of Employee termination, transfer or when authorization to use the vehicle is withdrawn, the Credit Cards must be returned to the Fleet Coordinator of record. Washing and Cleaning It is expected that the Operator will keep the University Vehicle clean. The University through its operating units accepts charges relating to car washes. Operators should contact the Fleet Coordinator of their area for details. SAFETY AND ACCIDENTS Safety It is the intent of the University to ensure that all University Vehicles are operated safely. Each Employee who operates a University Vehicle must take responsibility for accident prevention. Therefore, all Operators of University Vehicles are required to obey all traffic safety rules and regulations and to conduct themselves in a responsible manner. Accident Reporting All accidents, including theft, vandalism etc., regardless of fault, must be reported to the University Risk Management Department. Accidents involving another vehicle in the Province of Quebec require a joint accident report form to be completed on both sides and returned to the University Risk Management Department as soon as possible. Accidents outside the Province of Quebec Update May 12, 2004 Page 7 of 9

8 must be reported to the police. In all circumstances, the Operator is responsible for obtaining the names, addresses and telephone numbers of owners, drivers, and witnesses. In addition, the license plate number, make, model and year of the other vehicle must be obtained as well as the name of the insurance company and policy number. Injuries or deaths must be reported immediately to the police, and, as soon as practicable, to the Risk Management Department. All "hit-and-run" accidents require police notification prior to moving the vehicle. If the vehicle is moved before the police are notified, the $250 deductible will be applied by the University insurers when otherwise this type of collision is exempt from a deductible. Following an accident, the Operator can have the vehicle towed to the nearest repair facility if the vehicle is unsafe to drive. If the vehicle can be driven, the Operator will be given further instructions once the Risk Management Department is notified of the accident. All accident related repairs require authorization by the Risk Management Department. Maintenance Credit Cards should not be used to pay for the accident related repairs. If a replacement is required while the University Vehicle is being repaired, the Operator must contact the Risk Management Department for coverage information and eligibility. The FSF will assist the Operator with any towing problems, windshield replacements and short term rental requirements once the Risk Management Department has been advised. Deductibles will be applied in all cases. INSURANCE As of June 1, 2002 all new University Vehicles must be equipped with the Boomerang Tracking System to be automatically insured upon delivery under a blanket automobile policy with McGill University as the policy holder. However, all vehicle additions/substitutions/deletions must be reported to the Risk Management Department by the Fleet Coordinator prior to delivery of the vehicle to ensure that proper documentation is made available to meet licensing requirements. Take note that for the Boomerang Tracking System, there will be an installation cost and a monthly fee to be paid by the department requesting a new vehicle. A valid Insurance Certificate is distributed to Fleet Coordinators of record annually by the Risk Management Department which advises Operators of the name of University insurance carrier, the insurance policy number and the related procedures. Fleet Coordinators are responsible to request Insurance Certificates for new vehicles by contacting the Risk Management Department. The completion of an Automobile Insurance Form (Appendix A - Sample V) will be requested by the Risk Management Department at that time. You are requested to contact the Risk Management Department directly for a summary of the insurance coverage in force, including applicable deductibles, and territorial limits. Update May 12, 2004 Page 8 of 9

9 FURTHER INFORMATION Inoperable Vehicle If the University Vehicle is inoperable, the Operator has the option to: Arrange with the repair facility for a replacement vehicle; or Use his/her personal vehicle and charge the University according to the University policy on "Travel and Other Personal Reimbursements"; or Rent a vehicle from one of the rental agencies suggested by the FSF. Traffic Violations No Employee shall operate a company vehicle while impaired by intoxicating liquor and/or narcotic drugs. If an Operator is convicted of Driving Under the Influence or Driving while Intoxicated and is involved in an accident, the Employee, in addition to paying court costs, will be responsible for the cost of repairing the vehicle and will also be fully responsible for all damages in a third party liability claim. The cost of traffic violations, or any other resulting fines and related fees, is the responsibility of the Operator of record at the time of the infraction and must be paid immediately by the Operator. License Plates and Registration The initial registration and licensing associated with each new vehicle delivery is included in the total billing. Operators are not to pay out any funds or attempt to register new vehicles directly. The University Fleet Coordinators are responsible for renewing vehicle registrations and license plates on an annual basis. International Travel Under no circumstances will the University Vehicle be permitted to enter Mexico. The University Automobile Insurance policy does not provide coverage for side trips or vacations into Mexico. Employee Termination/Transfer If termination of employment occurs, the Operator of a University Vehicle (Private and Non-Dedicated Vehicle) must turn in the vehicle, keys, Fuel/Maintenance Credit Cards and all related documents, on the last day of regular employment with the University to the Fleet Coordinator. Extensions are not allowed. For all employee transfers, the Vehicle remains with the department unless otherwise approved by the Dean or Director of the area. Vehicle Related Documents and Key All vehicles related documents (Vehicle Registration, Insurance Certificate, and Fuel/Maintenance Credit Cards) and the key are to be kept together. The key and documents must never be left in a non-attended vehicle. Update May 12, 2004 Page 9 of 9

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