Monaro Council/Shire Mergers

The following is NDAI’s submission to the review:

27 February 2016

Council Boundary Review
Bombala, Cooma-Monaro Shire and Snowy River Shire Councils

Numeralla and District Activities Incorporated (NDAI), the community association representing the interests of the Numeralla district of Cooma Monaro Shire, strongly objects to the proposed merger of Bombala, Cooma-Monaro Shire and Snowy River Shire Councils.

NDAI has reached this position after reviewing the documentation made available by the NSW Government supporting the merger. The documentation appears flawed in many ways. Even if we were to accept it at face value, there appears to be no substantiative evidence to support a merger. The documents considered are:

1. KPMG Merger Business Case Report 18 May 2015
2. Fit For The Future Information Sheet; Cooma Monaro Shire Council
3. Community Consultation Findings 12 June 2015
4. Assessment on IPART site; Fit For Future; Cooma-Monaro Shire Council – CIP
5. Merger Proposal Bombala Council, Cooma-Monaro Shire Council, Snowy River Shire Council January 2016

Specific Issues Identified

• At odds with the assertion that there has been four years of extensive consultation, NDAI believes that there has been negligible community consultation to date:

o We note that the KPMG Merger Business Case Report is dated 18 May, 2015 and Cooma-Monaro Shire Council had to lodge its response for assessment as shown on the IPART site by 12 June 2015.

Part of the input required was the Community Consultation Findings; these findings are dated 12 June 2015 to meet the deadline.

How much consultation can be expected in less than 4 weeks from the release date of the Report?

Many people here are now just becoming aware of what is proposed.

• Doc 1, Key Findings states:

o “An analysis of the potential financial impacts of a merger of all three councils indicated a net benefit of $3.71 million over the ten year period”

and:

o “When the NSW Government financial support to assist with council mergers is included in the analysis, the net financial benefit from the proposed merger increases to $13.76m”

Minister Paul Toole, stated in his foreword to the Merger Proposal, Doc 5, that there is a total benefit of $33 m over 20 years. This appears to be made up of the $13.76 m as stated in the KPMG Report, and referred to in the Executive Summary of the Merger proposal, and the $20 m from State Government, referred to in the Minister’s foreword.

However, the KPMG Merger Business Case, doc 1 above, already includes the State Government financial support. The KPMG document refers to a 10 year horizon. It appears that in effect $30 m of the $33 m identified benefit is coming directly from the State Government.

If this interpretation is incorrect, then its communication is poor. If this interpretation is correct, then it’s no justification at all. The numbers don’t add up!

• Nevertheless, whatever the actual amount, State Government money is actually OUR money, it’s OUR taxes that fund our Government. How can this significant expense be ignored in the financial case? It would be better for us in the three Shires if it was divided up and provided directly for, say, infrastructure development instead of the new stationery that will no doubt be required by a merged entity.

• An assumption is made that fewer councillors will be prorata cheaper? Fewer councillors will incur:
o higher per capita expenses, not reduced or equal, due to additional travel and overnight expenses of councillors and support staff
o harder access for community members, so more indirect community costs are incurred
o harder for councillors to be across all the issues in a much larger shire
o nevertheless, the amount presumed to be saved, $500,000, as a result of fewer elected officials appears wrong. Mayoral and councillor expenses across the 3 shires are not much more than that now. Or does this imply there will be no elected officials in the merged shire?

• Cabramurra and the Alpine areas are referred to as an inclusion in the merged Shire. They are currently inside Kosciuszko National Park? Is the Park to be annexed by the merged Shires too?

• Why was there no normalisation of road depreciation?

o Cooma depreciates their roads at $4,500/km
o Bombala depreciates their roads at $1,800/km

With about 800 km of roads each, this is a significant inconsistency in the financial analysis.

• The report states that the total infrastructure backlog for the three shires is $146 million. The Shires currently report it at $23.19m as follows:

Bombala $5.380m
Cooma $6.449m
Snowy River $11.361m
Total $23.190m
KPMG $146m
Discrepancy $122.81m

What has gone on here? Aren’t KPMG supposed to be financial experts?

• Doc 5, the KPMG business case, does not identify any guaranteed benefits. There are many “may” and “potential” benefits, with almost none actually identified let alone quantified.

o It’s stated that; “Scale and capacity is a minimum requirement as it is the best indicator of a council’s ability to govern effectively and provide a strong voice for its community.”

‘Scale and capacity’ seems to be the holy grail. What is ‘scale and capacity’, and how much is enough. The need for it is not backed up by any evidence, how does it relate to effective governance as stated?

Further; “The proposed merger will provide significant opportunities to strengthen the role and strategic capacity of the new council to partner with the NSW and Australian governments on major infrastructure projects, addressing regional socio-economic challenges, delivery of services and focus on regional priorities.”

What regional priorities, socio-economic challenges, which region? What’s strategic capacity? Not just provide opportunities, but ‘significant’ ones!

More waffle.

• Doc 4 says that, Cooma Monaro Shire currently fails in 2 of the areas of the ‘Fit for Future’ assessment. As a merged entity, that entity fails to meet the criteria in 3 areas. How is that better for all, if it’s such an important criteria?

• One of the failed aspects in the Fit for the Future assessment is that Cooma Monaro Shire Council will need to seek increased rates above the pegging rate in the future. It’s then stated that under the merged entity, that this will still be a requirement. It’s another apparent disconnect that will occur no matter whether the merger happens or not.

• Doc 1, KPMG Key Findings states “the three councils’ resources are already stretched…” and “a merger will likely lead to a loss of approximately 19 FTE”. (FTE; Full Time Employees) How is that good for the future of services provided to the community? Fewer councillors won’t be further stretched as well?

• Doc 5 cherry picks examples, with no explanation as to their merit, as further justifications for the merger:

o Lithgow City Council has 9 councillors, 4551 km2, therefore the 15,000 km2 merged entity will also function ideally with 9 councillors. Cooma Monaro Shire alone is already 5229 km2
o There are merged larger Shires in Queensland and Victoria, so it therefore must be good for rural NSW and the Monaro. How so, why are they exemplars?
o Nine councillors cannot be in touch with issues across a diverse merged ‘Monaro’ Shire with an area of about 15,000 km2. Local Government will no longer be local for much of a merged Shire

• Numerous identified benefits can be realised by cooperation without the merger, as per numerous existing examples like the Library and Community Transport. Consistent planning laws, like a number of other issues, are no doubt desirable, however they are not dependant on a merger.

• History shows merging of organisations, rather than adsorption, invariably results in increased layers of management and responsibilities and consequent increased costs, witness RFS and LLS in recent times in NSW.

• Doc 5; why is it that flood risk management for Cooma is somehow dependant on the merger? Is this bribery, a threat, coercion, confusion?

• If for a moment we were to accept all the flawed arguments in favour, and the merger progressed, the bottom line financial justification is that there will be approximately 1% net improvement in the merged entities’ financial position. This is a number seemingly based on best case assumptions and still down around or below the error ‘noise’ of a future financial projection. This is at the cost of local representation on Council for much of the community. This is a cost that is not justified.

It appears that a political decision has been made to merge our shires for reasons not clear to us in the bush. Perhaps there is a political need to sort out Sydney councils in some way and we are just collateral damage? This is being railroaded though with negligible consultation and fundamentally flawed justification.

Doc 5 again; “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.”

As this has not been demonstrated to us in any way by the process to date, NDAI strongly objects to the merger based on the non-justification made by the NSW Government.

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