Div 5Principal office

Division 5—Principal office 45—Principal office (1) A council must nominate a place as its principal office for the purposes of this Act. (2) Subject to subsection (3), the principal office of a council must be open to the public for the transaction of business during hours determined by the council. (3) A council should undertake public consultation about the manner, places and times at which its offices will be open to the public for the transaction of business, and about any significant changes to these arrangements. Part 2—Commercial activities and restrictions 46—Commercial activities (1) A council may in the performance of its functions and subject to this Act engage in a commercial activity or enterprise (a commercial project). (2) A council may, in connection with a commercial project— (a) establish a business; (b) participate in a joint venture, trust, partnership or other similar body. 47—Interests in companies (1) A council must not— (a) participate in the formation of a company; or (b) acquire shares in a company. (2) However, subsection (1) does not— (a) limit the investment of money under this Act; or (b) limit the ability of a council to participate in the formation of, or to become a member of, a company limited by guarantee established as a national association to promote and advance the interests of an industry in which local government has an interest. Part 3—Prudential requirements for certain activities 48—Prudential requirements for certain activities (aa1) A council must develop and maintain prudential management policies, practices and procedures for the assessment of projects to ensure that the council— (a) acts with due care, diligence and foresight; and (b) identifies and manages risks associated with a project; and (c) makes informed decisions; and (d) is accountable for the use of council and other public resources. (a1) The prudential management policies, practices and procedures developed by the council for the purposes of subsection (aa1) must be consistent with any regulations made for the purposes of this section. (1) Without limiting subsection (aa1), a council must obtain and consider a report that addresses the prudential issues set out in subsection (2) before the council— (b) engages in any project (whether commercial or otherwise and including through a subsidiary or participation in a joint venture, trust, partnership or other similar body)— (i) where the expected operating expenses calculated on an accrual basis of the council over the ensuing five years is likely to exceed 20 per cent of the council's average annual operating expenses over the previous five financial years (as shown in the council's financial statements); or (ii) where the expected capital cost of the project over the ensuing five years is likely to exceed $4 000 000 (indexed); or (iii) where the council considers that it is necessary or appropriate. (2) The following are prudential issues for the purposes of subsection (1): (a) the relationship between the project and relevant strategic management plans; (b) the objectives of the Development Plan in the area where the project is to occur; (c) the expected contribution of the project to the economic development of the local area, the impact that the project may have on businesses carried on in the proximity and, if appropriate, how the project should be established in a way that ensures fair competition in the market place; (d) the level of consultation with the local community, including contact with persons who may be affected by the project and the representations that have been made by them, and the means by which the community can influence or contribute to the project or its outcomes; (e) if the project is intended to produce revenue, revenue projections and potential financial risks; (f) the recurrent and whole-of-life costs associated with the project including any costs arising out of proposed financial arrangements; (g) the financial viability of the project, and the short and longer term estimated net effect of the project on the financial position of the council; (h) any risks associated with the project, and the steps that can be taken to manage, reduce or eliminate those risks (including by the provision of periodic reports to the chief executive officer and to the council); (i) the most appropriate mechanisms or arrangements for carrying out the project; (j) if the project involves the sale or disposition of land, the valuation of the land by a qualified valuer under the Land Valuers Act 1994. (2a) The fact that a project is to be undertaken in stages does not limit the operation of subsection (1)(b) in relation to the project as a whole. (3) A report is not required under subsection (1) in relation to— (a) road construction or maintenance; or (b) drainage works. (4) A report under subsection (1) must be prepared by a person whom the council reasonably believes to be qualified to address the prudential issues set out in subsection (2). (4a) A report under subsection (1) must not be prepared by a person who has an interest in the relevant project (but may be prepared by a person who is an employee of the council). (4b) A council must give reasonable consideration to a report under subsection (1) (and must not delegate the requirement to do so under this subsection). (6) A council may take steps to prevent the disclosure of specific information in a report under subsection (1) in order to protect its commercial value or to avoid disclosing the financial affairs of a person (other than the council). (6a) For the purposes of subsection (4a), a person has an interest in a project if the person, or a person with whom the person is closely associated, would receive or have a reasonable expectation of receiving a direct or indirect pecuniary benefit or a non‑pecuniary benefit or suffer or have a reasonable expectation of suffering a direct or indirect detriment or a non‑pecuniary detriment if the project were to proceed. (6b) A person is closely associated with another person (the relevant person)— (a) if that person is a body corporate of which the relevant person is a director or a member of the governing body; or (b) if that person is a proprietary company in which the relevant person is a shareholder; or (c) if that person is a beneficiary under a trust or an object of a discretionary trust of which the relevant person is a trustee; or (d) if that person is a partner of the relevant person; or (e) if that person is the employer or an employee of the relevant person; or (f) if that person is a person from whom the relevant person has received or might reasonably be expected to receive a fee, commission or other reward for providing professional or other services; or (g) if that person is a relative of the relevant person. (6c) However, a person, or a person closely associated with another person, will not be regarded as having an interest in a matter— (a) by virtue only of the fact that the person— (i) is a ratepayer, elector or resident in the area of the council; or (ii) is a member of a non‑profit association, other than where the person is a member of the governing body of the association or organisation; or (b) in a prescribed circumstance. (6d) In this section, $4 000 000 (indexed) means that that amount is to be adjusted for the purposes of this section on 1 January of each year, starting on 1 January 2011, by multiplying the amount by a proportion obtained by dividing the CPI for the September quarter of the immediately preceding year by the CPI for the September quarter, 2009. (6e) In this section— employee of a council includes a person working for the council on a temporary basis; non‑profit association means a body (whether corporate or unincorporate)— (a) that does not have as its principal object or 1 of its principal objects the carrying on of a trade or the making of a profit; and (b) that is so constituted that its profits (if any) must be applied towards the purposes for which it is established and may not be distributed to its members. (7) The provisions of this section extend to subsidiaries as if a subsidiary were a council subject to any modifications, exclusions or additions prescribed by the regulations.