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NSW Council Amalgamation Update

The NSW Government is forging ahead with its Fit for the Future reforms to transform local government, despite facing legal actions in relation to a number of proposed amalgamations and uncertainty about when elections will occur.

In this update:

  • Councils launch legal challenges against NSW Government
  • Robert Sendt appointed Chair of Boundaries Commission
  • Councillors asked to reapply for positions
  • Ongoing uncertainty about council elections

Councils launch legal challenges against NSW Government:

The Baird Government is facing legal challenges from three councils, Ku-ring-gai, Woollahra and Botany Bay, over alleged inconsistencies in its Fit for the Future reform.

The NSW Supreme Court will today hear an action brought by Ku-ring-gai disputing the Government’s claim mergers will save NSW $2 billion over 20 years. The council is seeking an injunction to review the KPMG report commissioned by the Government in which the savings were allegedly calculated, following the rejection of its earlier application to the Premier’s office to review the same document. Ku-ring-gai is arguing it should have the opportunity to challenge KPMG’s financial modelling.

Woollahra council and Botany Bay have also launched separate actions in the NSW Land and Environment Court. Woollahra is arguing the Government has failed to conduct proper public consultation and issue reasonable notice, and that its refusal to release the KPMG report is a denial of procedural fairness. Mosman, Walcha and Kiama Municipal Councils are expected to join the action. Botany Bay is launching a separate action in the same court, objecting to its expected merger with Rockdale City Council.

Robert Sendt appointed Chair of Boundaries Commission:

Former Carr Government Auditor-General Bob Sendt has been appointed as Chairman of the NSW Boundaries Commission. In this role, Mr Sendt will be responsible for overseeing the Commission’s independent review of the Government’s plan to reduce the number of councils in Sydney from 43 to 25.
Mr Sendt will be joined by one nominee of the Office of Local Government, Ms Natasa Mitic, and two nominees of Local Government NSW, Cr Rick Firman OAM and Cr Lesley Furneaux-Cook, who will consider factors such as financial outcomes, community attitudes, elected representation, employment disruptions, and service improvements in preparation of the Commission’s advisory report to Government.

Councillors asked to reapply for positions:

Last Wednesday, Minister for Local Government, Paul Toole, wrote to all NSW councillors and mayors advising they have until April 15 to nominate the roles they would be interested in serving on amalgamated councils. Options for roles include councillor, member of a local representation committee, or member of an implementation advisory group.

Councillors have also been asked whether they are interested in serving as administrators in the interim period between the finalisation of merger agreements – expected to be some time in the middle of the year – and elections for the newly-formed councils. The Minister also wrote to general managers asking they reapply for their position on amalgamated councils.

Critics have argued the Minister’s letter indicates the Government intends to proceed irrespective of public and council sentiment. The Boundaries Commission is yet to hand down its final report, while submissions are still being received in relation to the proposed mergers of Mosman, North Sydney and Willougby Councils, as well as one half of Warringah with Pittwater and the other half with Manly.

Ongoing uncertainty about council elections:

There has been ongoing uncertainty about when council elections will occur if amalgamations are not finalised by the end of Q3 this year.

Council elections are due in September 2016. However, some commentators have speculated they could be pushed back until March 2017, by which time the amalgamation process should be finalised, or alternatively be undertaken in two tranches, the first this September and the second next March.

Any decision on election timing will ultimately be made by Cabinet, who will need to consider a number of factors:

  • Federal election: Were the Federal Government to hold an election in September this year, NSW will be forced to move local government elections to another time. It would make the most sense for this to be aligned with the date chosen for merging councils.
  • Parliamentary support: Moving the election date for non-amalgamating councils would require legislative change. While the Christian Democratic Party supports the Fit for the Future plan, passing changes to the Local Government Act could still be challenging. The Baird Government may be reluctant to open the matter for parliamentary debate once more, providing a platform for Labor and the Greens to re-vocalise their opposition.
  • Cost and risk: While moving the election date will be difficult, holding council elections on two separate dates will itself be expensive. Furthermore, there is likely to be a high degree of confusion within the electorate about which election day to attend.

Minister Toole’s current public preference, as stated in a number of media reports, is for a dual election date, with non-amalgamating council elections taking place in September 2016 and elections for amalgamated councils taking place in March next year.

Whichever option the Government settles on, there will be important ramifications for businesses whose operations are affected by local government activity.

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