Nelson City Council is considering any potential legal risks around the election of a first-term councillor with indirect financial links to the council.
Lisa Austin, who was elected in October, co-owns Austin Transport Tippers with her husband.
The company has no direct contracts with Nelson City Council but it does have dealings with two of the council's contractors.
The Local Authorities (Members' Interests) Act prevents people from being elected or appointed as a member of a council if they are "concerned or interested", either personally or through a spouse or partner, in contracts or subcontracts from the council totalling more than $25,000 per year, unless the Auditor-General grants an exemption.
Austin was sworn in on 30 October and a week later the Audit Office said the council applied for retrospective approval of her existing contracts.
The Audit Office said it did not have the legal power to approve contracts between a council and a candidate seeking election nor could contracts be approved after a successful candidate won election.
It declined to give Austin an exemption but also said it would not prosecute her as it was not in the public interest.
Last week Austin said she believed the Auditor-General's decision had resolved the matter but another councillor had been trying to oust her.
Councillors discussed the matter at a closed-door extraordinary audit risk and finance committee meeting on Thursday, but what happened remained under wraps.
Following the meeting Nelson Mayor Nick Smith said the matters were legally privileged.
The committee made no decision other than to receive the report and note the advice that would be provided to the full council, Smith said.
"As this matter remains legally privileged, council asks that the confidentiality surrounding this issue be respected until it is resolved.
"We recognise it is a matter of significant public interest and will make a public statement following the decision."
He had previously said Austin was the victim of a daft interpretation of outdated rules that were undermining local democracy.
The report and the relevant information will go to the full council for a decision in the public excluded part of its meeting next week.
This story was first published on rnz.co.nz
