Shared Services Legal Implications

1. 16 April 2007 'Shared Services' – Legal Implications

2. Overview Self-evidently sensible! Fits with principles Statutory basis a bit tricky Process varies Some random issues/suggestions

3. Principles In performing its role, a local authority should – collaborate and co-operate with other local authorities and bodies as it considers appropriate to promote or achieve its priorities and desired outcomes, and make efficient use of resources s.14(1)(e) LGA

4. Principles cont … In performing its role, a local authority should - ensure prudent stewardship and efficient and effective use of its resources in interests of the district s.14(1)(g) LGA also sound business practices and sustainability ((f) and (h)) s.101(1) prudent management promoting current and future community interests.

5. Council’s role to enable democratic local decision-making and action for and on behalf of its communities, to promote social, economic, environmental and cultural well-being of its communities, to perform its statutory functions ss 10 and 11 LGA

6. Council’s powers For the purposes of performing its role, it has full capacity to carry on or undertake any activity or business, do any act, or enter into any transaction (with full rights, powers and privileges)

7. Council’s powers cont … Subject to the LGA, any other Act, and the general law Territorial authority must exercise its powers wholly or principally for the benefit of its district Regional council must exercise its powers wholly or principally for the benefit of all or a significant part of its region and not for the benefit of a single district s.12(2) –(5)

8. Shared services “exceptions” 2 or more local authorities engaging in a joint undertaking, a joint activity, or a co-operative activity transfer of responsibility from one local authority to another in accordance with the LGA the activities of a CCO s.12(6) LGA

9. Importance of decision-making Part 6 LGA Under any other Act – s.13 LGA; RMA etc

10. Regional/Territorial Triennial agreements – protocols for communication and co-ordination among all councils in a region s.15 Significant new activities by a regional council s.16 Transfer of responsibilities RC to TA/TA to RC substantive transfer/delegation s.17 LGA/s.33 RMA

11. Different Concepts transfer of responsibilities - s.17 or reorganisation order delegation joint undertaking, joint activity, co-operative activity contract for supply of goods or services partnership trust, arrangement for the sharing of profits, union of interest, co-operation, joint venture or similar

12. CCO/CCTO entity in respect of which 1 or more local authorities, whether or not jointly with other local authorities or persons have: control of 50% or more of votes at any meeting of members or the controlling body; or right to appoint 50% or more of trustees/directors/managers of the entity

13. CCO/CCTO cont … ‘entity’ means any partnership, trust, arrangement for sharing of profits, union of interest, co-operation, joint venture … excludes a joint committee a CCO which operates a trading undertaking for purpose of making a profit is a CCTO

14. CCO/CCTO Implications SCP to establish or become “a shareholder” statement of intent/reporting/monitoring principal objective/appointment of “directors” contracts for supply of goods and services company CCO or CCTO taxable CCTO prohibition on guarantees/restrictions on lending generally not subject to local government constraints

15. Process – SCP or worse! section 16 – significant new regional activity – LTCCP section 17 – transfer regional/territorial – SCP section 56 – establish CCO – SCP section 88 – change in mode of delivery of significant activity – SCP section 97 – significant change to service level, cost, capacity etc - LTCCP

16. Regulatory Activities generally can’t contract out of statutory regulatory responsibilities specific legislation will be relevant eg – s.33 RMA - s 233-236 Building Act

17. Regulatory Activities cont … Schedule 7, clause 32(5): a local authority may delegate to any other local authority … the enforcement, inspection, licensing and administration related to bylaws and other regulatory matters appointment and warranting of enforcement officers, authorised officers etc

18. Joint Committees avoids CCO’s statutory authority for delegated responsibility shared governance

19. Private Sector Participation arrangements which also include private sector parties may require compliance with s.107 policy “water services” – ss.130, 136, 137 significant constraints if private sector participation more risk of inadvertent CCO Just One Life Ltd v QLDC

20. 16 April 2007 'Shared Services' – Legal Implications