Dungog councillors face case of no right decision in merger vote

SPARE a thought for the eight Dungog councillors who, on Tuesday, will be asked to vote on the future of their shire.

And, while you’re at it, spare another for the mayor, Harold Johnston, who is likely to have the deciding vote should it be split 4-4 as expected.

The stark reality is that no matter what they do, there is no right answer.

Whether the councillors decide to push ahead with the proposed merger with Port Stephens or not, the residents of Dungog will see their rates rise.

Dungog council finds itself in the most unenviable of financial positions.

The reality is this: a low income base with little prospect of financial relief coupled with a large and growing backlog of ageing infrastructure and, most worryingly, what the general manager Craig Deasey calls a lack of “strategic capacity” to become sustainable.

If they decide to stand alone, the council will apply to IPART seeking a rates rise of 13 per cent for six years.

But, as Mr Deasey has already conceded, even that won’t be enough. The council’s administration building needs updating or replacement – a cost he estimates at between $3 and $4 million – and, in order to make the council sustainable there will need to be another rate rise of about 20 per cent.

Compare that with the case for a merger with Port Stephens. Assuming it goes ahead – and even if councillors vote for it on Tuesday there would still be a long way to go – Dungog ratepayers would likely see themselves quarantined from their new compatriots and face a specific rate rise of about 29 per cent. That would still leave a chunk of Dungog’s infrastructure backlog unfunded, but the expectation is that Port Stephens – with its state-funded roads and better bottom line – would be in a better position to eventually meet the debt.

But – and this is the variable that Dungog councillors will have to decide whether or not to gamble on – those assumptions are based on a $15 million grant from the state government that no one is certain will be available.

The Stronger Communities fund – as it was called – was made available for councils that were subject to state government mergers. But now the proposal is off the table thanks to the Nationals. Deputy Premier John Barilaro says he’ll fight for the funding to be given to the council if they merge, but so far there are no promises.

Issue: 38,491

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