Leaders back bill to demerge amalgated councils as clock ticks down

Cootamundra-Gundagai Regional Shire Council (CGRC) hosted representatives from the Hilltops, Snowy Valleys, Snowy Monaro Regional and Federation councils at the Gundagai RSL, where they met with state government representatives and members of the United Services Union to discuss the financial sustainability of forcibly-merged councils.

In 2016, the Baird government oversaw the forced merging of councils across the state, creating many amalgamated councils in the region, including those of Cootamundra-Gundagai and the Snowy Valleys.

But the forced amalgamations have put these councils under increased strain and in August 2022 former member for local government Wendy Tuckerman announced Cootamundra-Gundagai would be de-amalgamated.

Almost 18 months on, the council is less than satisfied with the state of affairs and the lack of clarity from the now Labor Minns government.

Now, momentum is gathering to see some action - as witnessed by Monday's roundtable, which aside from local government representatives, was also attended by state government members including Dr Joe McGirr, Justin Clancy, Steph Cooke, Amanda Cohn, Rod Roberts and Stephen Lawrence.

"It was a very positive meeting," Cootamundra-Gundagai mayor Charlie Sheahan said.

"We invited forcibly merged councils, who are in the same boat as us, and had a broad discussion around the general challenges that [these councils face]," he said.

Cr Sheahan said members also explored finding a clear pathway to demerge.

"Currently that process is being clouded by the minister [for local government]," he said.

He said there is currently a lack of legal processes needed to create two new councils - something which Greens MLC Amanda Cohn addressed at the meeting - where she spoke on her Local Government Amendment Bill to help create such a legal pathway.

"Ms Cohn currently has a bill before the Parliament to amend the Local Government Act to enable that to happen," Cr Sheahan said.

The bill is set to be debated in the coming weeks.

However, Cr Sheahan was less than impressed by the response from local government minister Ron Hoenig's office, who sent representatives but the minister himself did not attend.

"I believe he should have been there in person because this is a serious issue that has attracted other members of Parliament," he said.

"[This is besides] the fact there is a private members bill before the Parliament now which addresses the very problems that he is supposed to deal with."

Despite local government elections now being just months away in September, Cr Sheahan remained hopeful the council can be split in two before then.

"We have tentatively booked for an election with the electoral office, because we don't know what our council or councils will [look like] in September," he said.

Cr Sheahan said while "a lot of work" needed to be done between now and then, he was realistic.

"You're not going to have two Rolls Royces on day one. There's going to be a transition period - even post-separation," he said.

"There will be a sharing of resources and recruiting to fine-tune those two councils."

It comes as Minister Hoenig announced the state government will implement a review of the financial model for local government to address the rising cost pressures facing councils across NSW.

The government has asked the Independent Pricing and Regulatory Tribunal (IPART) to examine the financial model for councils and key factors impacting councils' financial sustainability.

The review will assess the resources currently available to councils, their capacity to cover ongoing expenses and ability to fund core council services and infrastructure for their communities.

It will also identify ways to improve budgetary performance and accountability within the sector so democratically elected councillors are empowered to make decisions for the effective running of their councils.

Minister Hoenig said the financial sustainability of councils is "one of the most significant issues facing local government in this state".

"With the cost of delivering core services to communities rising, it's critically important councils are financially sustainable, but that needs to be balanced with the impact on tightening household budgets," he said.

"That's why we've asked IPART to make recommendations about whether the current financial model of councils enables long-term financial sustainability and whether councils have the financial capacity and mechanisms needed to deliver budget improvements."

Mr Hoenig said it is important to ensure the solution to financial challenges facing councils is not by increasing revenue through raising council rates or seeking financial support from the state government.

"This review is a key election commitment and will help ensure this vital tier of government can continue to deliver essential services to NSW communities," he said.

This announcement follows changes made to the IPART rate peg methodology last year, which give councils greater certainty about the income they can generate through the payment of council rates, while protecting residents from significant rate increases.

A statement from the minister's office said this financial modelling review will provide a holistic view of the challenges impeding the financial sustainability of the sector and ensure councils are delivering value to their communities through responsible fiscal decisions.

The draft terms of reference are now open for feedback with submissions from the public welcome until March 15, 2024.