Part of the four-day tarmac rally, for classic and modern cars and including more than 30 stages, has been held in Toodyay for the past nine years.
Public liability insurance of $100 million has been taken out by Targa West to cover the event.
At its January 21 council meeting, the shire voted in favour of signing the memorandum of understanding and agreed that the benefits of the popular rally far outweighed any problems associated with it.
Shire of Toodyay President David Dow said some members of the community had seen the rally as controversial. ‘Some people love it, some people hate it,’ Mr Dow said.
‘Some people are unhappy that it means certain roads are closed and people can’t get access to their properties.
‘But it does put Toodyay on the map and we get some good publicity from it.’
Included in the MOU are that any negative impacts on the community be minimised and all economic and tourism benefits be maximised.
The shire will work to identify and support companion events, identify and support fundraising opportunities for local community groups and charities, and meet stakeholders and the community twice a year to discuss any problems with the rally.
The MOU will state that there is no commitment to funds or services from either party.