2014-01-13 Item 6.3 Appendices 1-5

9. Contracts
9.1. Application of existing contracts
Where there is a current contract to which the continuing council is a party, if the
context permits, it is taken to be a contract with the new council or both the
continuing council and new council pursuant to section 50 of the LGDIR.

For example, a contract for the:

      employment of staff

      construction of a new building or other infrastructure which is entirely within
       the new council area, would be deemed to be a contract related to the new
       council or

      provision of maintenance services (e.g. waste collection, mowing, public
       facilities maintenance and cleaning services) which applies across both the
       continuing and new council areas would be deemed to be a contract with
       both the continuing and new council.

The transfer committee must agree and maintain a schedule of all contracts which,
after changeover day, will apply to the:

      new council only

      continuing council only

      new and continuing council.

In relation to those contracts that will continue to apply to both the continuing and
new councils, the transfer committee must decide, within the terms of the contract,
the extent of the liability of each council and the process for managing the contract
beyond changeover day.

All costs associated with determining the status of each contract are deemed to be a
de-amalgamation cost pursuant to section 35(1)(d) of the LGDIR.


9.2. Entering into new contracts—continuing
     council
It is acknowledged that circumstances may arise whereby it is absolutely necessary
in order to ensure continuity of business and delivery of essential services, that the
continuing council may need to enter into new contracts that will bind the new
council, prior to changeover day.

Section 57 of the LGDIR provides a specific approval process for major contracts.




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