Posted on June 25, 2019 by Sue Puckeridge

Amendments to Local Government Act 1993

The Local Government Amendment Act 2019 (‘Amendment Act‘) received assent on 25 June 2019.

The Amendment Act introduces several amendments to the Local Government Act 1993 (‘LG Act‘), two of which are considered to be of particular interest to those who regularly deal with local government.

First, the Amendment Act increases the tender threshold to $250,000.00.  To date, a council has had to tender for contracts with a value above $150,000.00.  The increase has been sought by councils for some time and is aimed at reducing procurement costs, red tape and delays.  This amendment has commenced.

Secondly, Part 10 of Chapter 15 of the LG Act currently provides for council’s to charge fee for services but such fees must be determined in accordance with the process set out under the LG Act including a requirement that council give public notice of a proposed fee for non-business activities and consider submissions made during the notice period.

The Court of Appeal has held that even though the LG Act gives councils a general power to contract and reach an agreement or arrangement with a person in respect of work to be performed the price that can be charged for that work remains subject to Pt 10 of Ch 15 (Adrenaline Pty Ltd v Bathurst Regional Council [2015] NSWCA 123).

The Amendment Act inserts a new s612 into the LG Act which enables regulations to be made which exempt a council from the requirement to publicly notify fees for non-business activities or to determine a fee in accordance with a pricing methodology adopted in the council’s operational plan, if the fee is charged for a commercial activity.

Such a regulation would enable the parties to a contract to define the fees payable under a contract (such as leases and licences) as part of the negotiation.  The regulation may also have retrospective effect.

This would restore the position that which many considered operated prior to the decision in Adrenaline.  This amendment has not yet commenced and no regulations have yet been prepared.  It is therefore difficult to know what ‘commercial activities’ might be included the regulation.

If you wish to discuss this article, please contact Sue Puckeridge on 8235 9702.