A number of amendments to the Local Government Act 1993 (the Act) have been made following the Local Government Amendment Bill 2019 (the Bill) receiving assent on 25 June 2019. While some of the changes to the Act have already commenced, others will take effect on a date that is yet to be proclaimed.

An overview of some of the notable amendments to the Act is provided below.

Changes to procurement procedures

The tender threshold for councils to go to tender has now been increased from $100,000 to $250,000 in a bid to cut the red tape associated with unnecessary expense and delays.

Previously, section 55(3)(n) of the Act provided that if a contract involved an estimated expenditure or receipt of an amount greater than $100,000, council was required to invite tenders before entering into contracts.

The alternative threshold of $150,000 specified in the regulations will continue to apply for those specific contracts which involve the provision of services where those services are, at the time of entering the contract, being provided by employees of the council.

Mutual recognition of section 68 approvals

New provisions are to be introduced to enable regulations to be made which provide a scheme for the mutual recognition of certain council approvals issued under section 68 of the Act.

Section 68 approvals are required for a range of activities identified under section 68 of the Act. This includes activities such as the carrying out waste management activities in public spaces, swinging or hoisting items over a public road, the carrying out of water supply work or engaging in trade or business on community land.

When the provisions are introduced and a scheme is established, it is expected that approval requirements for those businesses which operate across local government areas and require multiple approvals from different councils, will be simplified. The new provisions will allow a council that is willing to delegate certain regulatory functions to another council, to do so, provided the other council accepts that function.

12-month extension to rates freeze for amalgamated councils

Of relevance to those councils that merged in 2016, an amendment has been made to section 218CB of the Act regarding the transitional provision for the maintenance of pre-amalgamation rate paths. Under this provision, the Minister is authorised to make a determination which requires an amalgamated council, in levying rates for land, to maintain the same rate path that last applied to the land by the relevant former council.

Previously, if a determination applied to the levying of rates by a new amalgamated council, this was to continue for 3 rating years immediately following the rating year from which the relevant proclamation provided for the levying of rates.

The amendment to section 218CB(2) of the Act extends the rates freeze period to 4 rating years, providing those councils that are not ready to harmonise their rates from 1 July 2020 onwards, an additional 12 months to prepare for this.

This change also applies to existing determinations that were in force when the amendment to section 218CB(2) of the Act commenced on 25 June 2019.

Exemption from the regulatory requirements for fees

A new section 612 is to be inserted under Part 10 of Chapter 15 of the Act, which will provide an exemption for councils from the usual regulatory requirements for fees.

This new provision will enable regulations to be made by councils in relation to specified commercial activities only, exempting them from the standard requirements to advertise council fees or determine fees in accordance with a pricing methodology formally adopted and set out in council's operational plan.

Previously the Court has held that a council has a general power to contract with persons in respect of work to be performed, but that a council's "general power to contract" does not empower it to charge fees for work performed outside the mechanisms established by Chapter 15 Part 10 of Act (Adrenaline Pty Ltd v Bathurst Regional Council [2015] NSWCA 123 at [48]).

These amendments (in combination with the increased tender threshold) are intended to strengthen the purchasing power of councils when negotiating contract fees and competing against other service providers. This is because councils will no longer be commercially disadvantaged by requirements that their fees be advertised and made known to competitors or the requirement that the pricing methodology in their operational plan be adopted.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.