COFFS Harbour councillor Sally Townley has spoken out to clarify her position on the council's sponsorship of Rally Australia's WRC round to be held on the Coffs Coast in November.
Cr Townley was one of four councillors who voted not to approve sponsorship for the 2016 and 2017 events - a decision she said was "not taken lightly."
Referring to the council's Code of Conduct, Cr Townley said she had difficulty voting the money through, due to possible perceived conflict of interest because the council's general manager, Steve McGrath, authorises sponsorship at the same time as being a director on Rally Australia's board.
It's a claim refuted by Mr McGrath who said he has sub-delegated authority of negotiating the Rally Australia sponsorship contract to the council's director of business services, Andrew Beswick.
Cr Townley said she was not making any suggestion of improper activity, but had concerns that the perception of how council governs its sponsorship funds "may not stand up to scrutiny in the future."
"The test of conflict of interest is whether a reasonable and informed person could perceive that you could be influenced by a private interest when carrying out your public duty," Cr Townley said.
"It's like a lawyer being asked to represent both parties in a court case. It's impossible to be sure they are representing both to the best advantage."
Mr McGrath has held a 'non-paid' position on the Rally Australia board, since the council in 2010 voted in favour of his appointment.
Cr Townley suggested there may be more suitable ways to arrange the financial transactions and sponsorship in the future, such as Mr McGrath not sitting on the board.
It's a view supported by councillor John Arkan.
"It's not a question of whether we want the Rally, of course we do. The question is around making sure our governance is in order," Cr Arkan said.
Cr Townley further questioned the allocation for 2017 sponsorship, saying until the fixture was set, and council were presented with detailed information about cost and sponsorship needs, it would be inappropriate to allocate ratepayers' money for the event.
Cr Mark Sultana also raised concerns over the need for the 2017 allocation, as did Cr Nan Cowling and Cr Arkan.
Mayor Denise Knight said the council had to plan for the long-term.
"If you don't have things in place for the next year and start looking at sponsorship money then we don't get anything in Coffs Harbour," Cr Knight said.
"Coffs Harbour has a 2030 plan and you can't just take things one year at a time. You've got to look and plan ahead."
Cr Townley said she hopes for a suitable resolution to these issues at the next meeting.