Merger Proposal: Armidale Dumaresq Council Guyra Shire Council JANUARY 2016 and authors Figure 1: Proposed new local government area Page 1 MINISTER’S FOREWORD Four years of extensive consultation, research and analysis have demonstrated that change is needed in local government to strengthen local communities. Independent experts have concluded that NSW cannot sustain 152 councils – twice as many as Queensland and Victoria. After considering the clear need for change, the Independent Local Government Review Panel (ILGRP) research and recommendations, the assessment of councils by the Independent Pricing and Regulatory Tribunal (IPART), council merger preferences, community views and the unique needs and characteristics of each region, I am putting forward the proposal to merge the local government areas of Armidale Dumaresq and Guyra. The proposed merger will create a council better able to meet the needs of the community into the future and will provide significant benefits for the community. This document details the benefits the merger will provide to communities, including: a total financial benefit of $21 million over a 20-year period that can be reinvested in better services and more infrastructure; potentially reducing the reliance on rate increases through Special Rate Variations (SRVs) to fund local infrastructure; greater capacity to effectively manage and reduce the infrastructure backlog across the two councils; improved strategic planning and economic development to better respond to the changing needs of the community; effective representation by a council with the required scale and capacity to meet the future needs of the community; and providing a more effective voice for the region’s interests and better able to deliver on priorities in partnership with the NSW and Australian governments. With the merger savings, NSW Government funding of $15 million – and a stronger voice – the new council will be better able to provide the services and infrastructure that matter to the community, projects like: investment into Armidale as a major urban and service centre; significant ongoing replacement and enhancement of the local road network; investment into the airport precinct in Armidale; and supporting the sports, education and health industries through investment into local facilities and improving quality of service. The savings, combined with the NSW Government’s policy to freeze existing rate paths for four years, will ensure that ratepayers get a better deal. A suitably qualified delegate of the Chief Executive of the Office of Local Government will consider this proposal against criteria set out in the Local Government Act (1993), and undertake public consultation to seek community views. I look forward to receiving the report on the proposal and the comments from the independent Local Government Boundaries Commission. Minister Paul Toole January 2016 Page 2 EXECUTIVE SUMMARY The northern tablelands communities of Armidale Dumaresq and Guyra share common characteristics and connections and will benefit by up to $21 million from a merged council with a stronger capability to deliver on community priorities and meet the future needs of its residents. Introduction The new council for the new local government area will not only oversee an economy that shares This is a proposal by the Minister for Local many similar residential, workforce and industry Government under section 218E(1) of the characteristics, but will have enhanced scale and Local Government Act (1993) for the merger of capacity to help it deliver on local infrastructure Armidale Dumaresq and Guyra local 1 priorities such as improvement to the local water government areas. This merger proposal sets and sewerage services. out the impacts, benefits and opportunities of creating a new council. Impacts, Benefits and Opportunities The creation of this new council will bring together A range of benefits and opportunities has been communities with similar expectations in terms of identified from the proposed merger, including a demands for services, infrastructure and facilities. stronger balance sheet to meet local community The proposal has been informed by four years of needs and priorities. extensive council and community consultation and Analysis by KPMG shows the new council has the is supported by independent analysis and potential to generate net savings to council modelling by KPMG. operations. The merger is expected to lead to $6 The proposal is consistent with the 2013 findings million in net financial savings over 20 years. of the Independent Local Government Review The analysis also shows the proposed merger is Panel (ILGRP) as well as the Independent Pricing expected to generate, on average, around and Regulatory Tribunal (IPART) 2015 $700,000 in savings every year from 2020 assessment that each of these two councils is ‘not onwards. Savings will primarily be from the fit’ to remain as a standalone entity. redeployment of back office and administrative IPART determined that Armidale Dumaresq and functions; streamlining of senior management Guyra Shire did not satisfy key financial roles; efficiencies from increased purchasing performance benchmarks. IPART also assessed power of materials and contracts; and reduced that operating individually, each council would expenditure on councillor fees.2 have limited scale and capacity to effectively The NSW Government has announced a funding deliver on behalf of residents and meet future package to support merging councils which would community needs. result in $15 million being made available should the proposed merger proceed. 1 The end result if the proposal is implemented is that a new local government area will be created. For simplicity 2 throughout this document, we have referred to a new council NSW Government (2015), Local Government Reform: rather than a new local government area. Merger Impacts and Analysis, December. Page 3 These savings could enable the new council to improving liveability and boosting housing reduce the need for rate increases to fund new supply to meet population growth; and improved community infrastructure. delivering regional priorities of sustainable Each of the two councils is currently seeking and population growth, focusing on community has recently received approval for Special Rate health issues such as air quality, and Variations (SRVs) from IPART. For example: protecting local cultural heritage landmarks; Armidale Dumaresq Council had an approved and SRV of 10.0 per cent for a one-year period in supporting economic growth and urban 2014–15 and is considering applying for a development, while enhancing the standard of SRV of 10.0 per cent for a one-year period in living and lifestyle that local residents value. 2022-23; and While a merged council will increase the current Guyra Shire Council had an approved SRV of ratio of residents to elected councillors, the new 5.7 per cent for a one-year period in 2014–15 ratio is likely to be comparable with levels and intends to apply for a SRV of 27.5 per currently experienced by other communities cent for a one-year period in 2016-17. across regional NSW. The proposed merger is also expected to result in Next Steps simplified council regulations for residents and businesses in the Armidale Dumaresq and Guyra This merger proposal will be referred for Shire council areas, given each council is examination and report under the Local currently responsible for separate and potentially Government Act (1993). inconsistent regulatory environments. Regulatory Local communities have an important role to play benefits include consistency in approaches to in helping ensure the new council meets their development approvals, health and safety, current and future needs for services and building maintenance, traffic management and infrastructure and will have an opportunity to waste management. provide input on how the new council should be The proposed merger will provide significant structured. opportunities to strengthen the role and strategic Local communities will have an opportunity to capacity of the new council to partner with the attend the public inquiry that will be held for this NSW and Australian governments on major merger proposal and an opportunity to provide infrastructure projects, addressing regional socio- written submissions. For details please visit economic challenges, delivery of services and www.councilboundaryreview.nsw.gov.au focus on regional priorities. This could assist in: reducing the existing $39 million infrastructure backlog across the Armidale Dumaresq and Guyra region; Figure 2: Map showing boundaries for the proposed new council with Wagga Wagga City Council highlighted for comparison Page 4 INTRODUCTION This merger proposal has been informed by an extensive four-year consultation and review process. The NSW Government has been working with local councils and communities since 2011 to strengthen council performance and ensure local government is well placed to meet future community needs. A first key step in that process was the ILGRP’s comprehensive review of local government and subsequent recommendations for wide-ranging structural reform and improvements to the system. In response, the NSW Government initiated the Fit for the Future reforms that required each local council to self-assess against key performance indicators and submit proposals demonstrating how they would meet future community needs. The NSW Government appointed IPART in 2015 to assess each council’s submission.