City of Burnside Elected Member Composite Training Felice DAgostino - - PowerPoint PPT Presentation

Felice D’Agostino Partner

City of Burnside

Elected Member Composite Training

Overview of Workshop

• Conflict of interest
• Informal gatherings
• Role of elected members on external boards

Conflict of Interest

Key Terms

• Material conflicts of interest
• Actual conflicts of interest
• Perceived conflicts of interest

Material Conflicts of Interest

Section 73

• You have a material conflict of interest in a matter to be

discussed at a meeting of the Council if you would: – gain a benefit, or suffer a loss; – directly or indirectly; and – whether of a person or pecuniary nature depending on the outcome of the consideration of the matter at the meeting.

Material Conflicts of Interest

Who Else?

• your relative
• body corporate of which you are a director
• proprietary company in which you are a shareholder
• a beneficiary under a trust or an object of a discretionary trust of

which you are a trustee;

• your partner;
• a person from whom you have received, or might reasonably be

expected to receive, a fee, commission or other reward for providing professional or other services; and

• a person of a prescribed class (none so far prescribed)

Exemptions

Section 73(2) You will not be taken to have a material conflict of interest where:

• the benefit or loss would be enjoyed (or suffered) in

common with all or a substantial proportion of the ratepayers, electors or residents of the Council area;

• r
• your relative (except for your spouse or domestic

partner) has an interest and you do not know, and could not reasonably be expected to know, of the interest

Exemptions

Members of an Agency or Instrumentality of the Crown If you are a member, officer or employee of an agency or instrumentality of the Crown, you will be regarded as having a material conflict of interest only if the matter directly concerns that agency or instrumentality of the Crown. An agency or instrumentality of the Crown includes:

• an administrative unit of the Public Service
• a body corporate comprised of, or including or having a governing

body comprised of or including, a Minister or Ministers of the Crown

• r a person or persons appointed by the Governor or a Minister or
• ther agency or instrumentality of the Crown

Dealing with Material Conflicts

• f Interest

If you have a material conflict of interest in a matter to be discussed at a meeting of the Council, you must:

• inform the meeting of your material conflict of interest in

the matter; and

• leave the meeting room (including any area set aside for

the public) so that you cannot view or hear any discussion or voting at the meeting, and stay out of the meeting room while the matter is being discussed and voted on.

Approval by Minister

You will not have contravened Section 74(1) if you have been granted approval by the Minister and you are complying with the conditions of the approval. The Minister may grant you an approval to take part in the meeting, or be in the Chamber, if:

• due to the number of members having a material conflict
• f interest, conduct of the meeting would be obstructed if

the approval were not given or;

• it appears to the Minister to be in the interests of the

Council’s community and area

Recording a Disclosed Material Conflict of Interest

If you have disclosed a material conflict of interest, the minutes of the meeting and a website determined by the CEO must record:

• your description of the nature of the interest; and
• if applicable, that you took part in the meeting, or were in

the Chamber during the meeting under the Minister’s approval. Material conflicts of interest provisions do not apply to a matter of ordinary business of the Council of a kind prescribed by regulation.

Maximum Penalty

If you vote on the matter: $15,000 or 4 years imprisonment In any other case: $5,000

Actual and Perceived Conflicts

• f Interest

What is a Conflict of Interest? - Section 75 A conflict of interest is a conflict between: – your interests (whether direct, indirect, personal and/or pecuniary); and – the public interest that might lead to a decision that is contrary to the public interest

Actual and Perceived Conflicts

• f Interest

Section 75A(1) If, in relation to a matter to be discussed at a meeting of a Council, you:

• have a conflict of interest in the matter (an actual conflict
• f interest); or
• could reasonably be taken, from the perspective of an

impartial, fair-minded person, to have a conflict of interest in the matter (a perceived conflict of interest), you must deal with the actual or perceived conflict of interest in a transparent and accountable way.

Exemptions – Actual and Perceived

You will not be regarded as having an actual or perceived conflict of interest merely where:

• you have an engagement with a community group,

sporting club or similar organisation undertaken in your capacity as a Council member;

• you are a member of a political party;
• you are a member of a community group, sporting club or

similar organisation (except if you are an office holder for the organisation);

Exemptions – Actual and Perceived

• you were a student of a particular school, or you are involved

with a school as a parent of a student at the school

• you are nominated or appointed as a member of a board of a

corporation or other association if you were nominated for appointment by Council;

• and other prescribed circumstances.

You also will not be taken to have a conflict of interest in a matter if the interest in the matter is held common with all or a substantial proportion of the ratepayers, electors or residents

• f the Council area.

Dealing with Actual and Perceived Conflicts of Interest

Section 75A(1) Where you have:

• an actual conflict of interest; or
• a perceived conflict of interest

you must deal with the actual or perceived conflict of interest in a transparent and accountable way. What is considered a transparent and accountable way?

Dealing with Actual and Perceived Conflicts of Interest

Inform: Section 75A(2) You must inform the meeting:

• of your interest in the matter; and
• if you propose to participate in the meeting, how you

intend to deal with the actual or perceived conflict of interest

Dealing with Actual and Perceived Conflicts of Interest

Is there a Quorum: Section 75A(3) If a quorum at a meeting cannot be formed because you propose to exclude yourself pursuant to Section 75(1), you will not be taken to have contravened Section 75A(1) by participating in the meeting in relation to the matter, if your attendance, together with any other required number of members, forms a quorum for the meeting. Participating includes, for example, voting.

Dealing with Actual and Perceived Conflicts of Interest

Section 75A(5) To avoid doubt, it is declared that non-participation in a Council meeting is not the only way in which the Council member may appropriately deal in a transparent and accountable way with the actual or perceived conflict of interest of the Council member in a matter to be discussed at the meeting

Dealing with Actual and Perceived Conflicts of Interest

Ordinary Business of the Council: Section 75A(6) Section 75 does not apply to a matter of ordinary business

• f the Council of a kind prescribed by regulation

Dealing with Actual and Perceived Conflicts of Interest

Committees and Subsidiaries: Section 75B The conflict of interest provisions extends to:

• committees;
• members of committees;
• subsidiaries; and
• board members of a subsidiary

Local Government (General) Variation Regulations 2016

• Came into force 24 November 2016
• Amended the Local Government (General) Regulations

2013

• Main changes:

– conflict of interest – ordinary business exemption – informal gatherings

Conflict of Interest: Ordinary Business Exemption

The ‘ordinary business’ exemption applies to all types of conflicts of interest

Ordinary Business Matters Exemption

• Section 12 ‘representation review’
• Allowances and benefits policy (only if policy treats all

members equally)

• Training and development policy
• Strategic management plan
• Annual business plan
• Budget
• Declaration of rates (other than separate rate) or charge

with the character of a rate

• Matters already discussed before a subsidiary or committee
• f the Council (where the interest which arises is the interest
• f the Council)

Subsidiary and Committee Ordinary Business Matters Exemption

• See new Reg 8AAA(1)(h), and 8AAB
• Meant to deal with difficulties that Councils, subsidiaries,

regional subsidiaries and committees presently face

• ‘The relevant interest in the matter is the interest of the

Council’

For Members on Committees, Single-council subsidiaries and regional subsidiaries:

• An interest which arises at a committee/subsidiary

meeting will be ‘ordinary business’ if: – the matter relates to the purpose for which the committee/subsidiary was established; and – The relevant 'interest' is of the Council Note: 'substantial proportion of constituent Councils' test for regional subsidiaries]

For Members on Committees, Single-council subsidiaries and regional subsidiaries:

• A discussion or decision at a Council meeting in respect
• f a matter discussed by a committee/subsidiary where

interest is of the Council, is ‘ordinary business’ under Reg 8AAA(1)(h)

Fact Scenario 1

You are the patron of a local community organisation that has a funding application before the Council. Neither you nor any person or body close to you stand to gain a personal or pecuniary benefit or suffer a personal or pecuniary loss depending on the outcome of the community organisation’s funding application. Your role is an honorary role and you have no administrative, management role or influence in the community organisation. You were asked to be the patron for the community organisation prior to your election to the

• Council. The amount of funding being sought is less than

$1,000. Do you have a material, actual or perceived conflict of interest?

Fact Scenario 2

The Council is considering the granting of a lease to Telstra to erect a telephone tower on one of its reserves. You own Telstra shares. Do you have a material, actual or perceived conflict of interest?

Fact Scenario 3

Your daughter attends Lincoln College, a private school in the Council’s area. The Council is considering making a road process order to close part of a road adjacent to Lincoln College and transferring the closed road to Lincoln College, which Lincoln College intends to use as an

• verflow carpark for parents and students.

Do you have a material, actual or perceived conflict of interest?

Fact Scenario 4

Your wife owns a company, in which you have no shares or interest, which submits a tender to the Council for the provision of cleaning services. Due to the contract amount, the decision to award the tender will be made by the Council at a Council meeting. Do you have a material, actual or perceived conflict of interest?

Fact Scenario 5

The Council has identified a vacant piece of land that it wishes to redevelop as a park and playground. A draft master plan for the park and playground have been prepared and the Council is currently consulting the community on the draft master plan. At the upcoming Council meeting, the Council will be deciding whether or not to endorse the plan and to go out to tender for the landscaping and recreational facilities works to redevelop the land as a park and playground. Prior to the Council meeting, you discover that you have unexpectedly inherited a piece of land overlooking the proposed new park. Do you have a material, actual or perceived conflict of interest?

Fact Scenario 6

A local community run childcare centre has applied to the Council for a discretionary rebate of Council rates. In support of its application, the childcare centre states that the rebate of Council rates will assist it to maintain its childcare fees at the current level as otherwise it would be required to increase its fees to cover increasing costs. Your granddaughter attends the childcare centre. Do you have a material, actual or perceived conflict of interest?

Fact Scenario 7

The Council receives a petition calling for the renaming of Hines Street to Hines Lane and a revitalisation project for the street as part of the Council’s Vibrant Laneways

• Project. You own a property on Hines Street. Do you have

a material, actual or potential conflict of interest?

Fact Scenario 8

The Council is considering applications for its Local Young and Emerging Artists award. The recipient of the award will be engaged by the Council to produce a piece of artwork to be installed in the foyer of the Council’s civic centre. One of the shortlisted artists is a close friend of yours. Do you have a material, actual or perceived conflict of interest? What if

• ne of the shortlisted artists was your daughter. Do you

have a material, actual or perceived conflict of interest?

Fact Scenario 9

The Council is considering the adoption of the Riverside Neighbourhood Plan which proposes significant revitalisation and redevelopment of the Riverside area. The Australian Services Union and the Australian Labor Party

• wn premises within the Riverside Area. You are a member
• f the ASU and ALP. Do you have a material, actual or

perceived conflict of interest?

Fact Scenario 10

The Council has received and is considering a petition from the Riverside Orthodox Church for the installation of traffic lights on the footpath outside the church. You are a parishioner of the church and also have a personal relationship with many of the leading members of the church community. Do you have a material, actual or perceived conflict of interest?

Fact Scenario 11

The Council is a constituent council of ABC Regional Subsidiary (ABCRS). You are a board member of ABCRS and receive an allowance for this position. Do you have a material, actual or perceived conflict of interest in any of the following circumstances: (a) the Council is considering the draft annual report for ABCRS; (b) ABCRS has resolved to request the Council (and only the Council) make a financial contribution to ABCRS of $50,000

Fact Scenario 11

(c) The Council is considering your reappointment to the Board of ABCRS following the expiry of your term of appointment (d) The Council is considering the draft budget and annual business plan for ABCRS which requires the approval of all constituent councils before adopting its budget and ABP (e) The Council is considering provision of funds to the ABCRS being a matter that has not already been considered by the ABCRS

Fact Scenario 12

The Council is considering appointing Cr Smith as a board member to an external organisation. Board members receive no remuneration. Does Cr Smith have a material, actual or perceived conflict

• f interest?

Informal Gatherings

Informal Gatherings

Local Government Act 1999 – Section 90(8) (8) The duty to hold a meeting of a Council or Council committee at a place open to the public does not in itself make unlawful informal gatherings or discussion involving: (a) members of the Council or Council committee; or (b) members of the Council or Council committee and staff, provided that a matter which would ordinarily form part of the agenda for a formal meeting of a Council or Council committee is not dealt with in such a way as to obtain, or effectively obtain, a decision on the matter outside a formally constituted meeting of the Council or Council committee

Local Government Act Section 90(8)

Legislative examples of informal gatherings:

• planning sessions associated with the development of

policies or strategies;

• briefing or training sessions;
• workshops;
• social gatherings to encourage informal communication

between members or between members and staff. ..... are you in an informal gathering right now?

Local Government Act Section 90(8a)

(8a) In addition, an informal gathering or discussion under subsection (8) may only be held if: (a) the Council has adopted a policy on the holding of informal gatherings or discussions; and (b) the informal gathering or discussion complies with the policy No Policy = No Informal Gatherings

Local Government Act Sections 90(8b) – 8(c)

(8b) A policy adopted under subsection (8a) must comply with any requirements prescribed by the regulations, and the regulations may (for example) include requirements that the policy provide for: (a) the imposition of limitations on the holding of informal gatherings or discussions; and (b) procedures for approval of informal gatherings or discussions; and (c) the capacity of the council to impose conditions on an approval. (8c) A Council may from time to time alter its policy, or substitute a new policy.

New Regulations

Local Government (General) Regulations 2013 As in force from 24 November 2016, varied by the Local Government (General) Variation Regulations 2016 Regulation 8AB 'designated informal gathering or discussion' means an event organised and conducted by or on behalf of the Council or CEO to which members of the Council or Council committee (as the case may be) have been invited and that involves discussion of a matter that is, or is intended to be, part of the agenda for a formal meeting of the Council or Council committee.

New Regulations

Regulation 8AB (cont) Policy requirements in respect of ‘designated informal gatherings or discussions’:

• must be advertised online
• generally must be open to the public
• may only be held in confidence if it is a

– planning session of a general or strategic nature, or – a briefing in relation to information or a matter within the ambit

• f Section 90(3),

and the CEO or Council has determined to hold the gathering in confidence (must be on a case-by-case basis)

New Regulations

A closer look at Regulation 8AB(1)(b)(ii)(A) ... What is ‘a planning session of a general or strategic nature'?

Role of Elected Members on External Boards

External Appointments

• Local community committees, regional organisations such

as School Councils, Business Groups, and Committees of Management of Council facilities, and committees and boards of external organisations.

• Relationships with various community and business bodies

who require Council representation in accordance with their Constitutions / Rules of Associations.

• Important for building effective two way communication

between Council and the community.

External Appointments

• A fiduciary responsibility to Board or committee.
• Important that elected members:

– understand basis of the Council nominated appointment – understand fiduciary duties to Council and external body and alert to conflicts – remain objective and not seek to influence Council in

• rder to give preferential treatment to such bodies

Incorporated Associations

• Management Committees are appointed by Incorporated

Associations to run the affairs of the Association: – in accordance with the law; and – their Rules of Association

• Elected Members are often requested to sit on these

Management Committees

Incorporated Associations

• Committee Members of Incorporated Associations have

legal duties and management responsibilities.

• Important before joining a committee, Elected Members

understand: – what the association does; – the finances and financial arrangements of the association; – the Rules of Association (or Constitution); – previous minutes of the Committee’s Meetings; – the insurance cover to protect members; and – the time commitment.

Incorporated Associations

• Council Members seeking nomination on the

Incorporated Association must be mindful of: – their fiduciary responsibilities to the Incorporated Associations they join; – their duties to the Council; and – the conflict of interest provisions at Council meetings under the Local Government Act 1999.

Incorporated Associations

• Elected members cannot merely be a "Council

representative" in their capacity as a board member of the external body.

• Rather, the elected member becomes a board member in

addition to their role as an elected member.

Incorporated Associations

• Board member must act in the best interests of the body,

support its decisions, maintain confidentiality and not have regard to any irrelevant matters.

• Conversely, the elected member must act in the best

interests of the Council and is not at liberty to divulge Council confidences to the external board.

• Conflicts of duties can arise

Incorporated Associations

Another approach

• Many councils do not now appoint elected members to

external boards;

• instead members act as a 'liaison' so that they do not

become a member of the board, do not have voting rights, and can be excluded from board meetings for confidential matters.

Unincorporated Associations

• No legal status
• Attendance and representation occurs only as a ‘natural

person’

• Potential for council insurance and protections under the

Local Government Act 1999 not to apply

• Potential for individual members of unincorporated

associations to be liable for the actions of the association Approach with caution