Dungog's vote to wait on Port Stephens merger a "rebellion"

REBELLION: Dungog councillor Nancy Knudsen led the push against pursuing a merger with Port Stephens Council before the September election, saying more work needed to be done on the issue. Picture: Simone De Peak
REBELLION: Dungog councillor Nancy Knudsen led the push against pursuing a merger with Port Stephens Council before the September election, saying more work needed to be done on the issue. Picture: Simone De Peak

THEY’RE calling it a “rebellion”.

The Dungog councillors who on Tuesday night stuck to their guns and avoided a voluntary merger with Port Stephens say “there are other solutions” to the council’s dire financial position and that there’s no need to rush a decision.

The council voted 4-3 to stick with the motion agreed to at the start of May, which called for the general manager and mayor to begin negotiations with Maitland and Port Stephens Councils, as well as the Boundaries Commission and the NSW government, before a poll at the election in September to find out what residents want to do.

That’s against the advice of the council’s general manager Craig Deasey and mayor Harold Johnston, who both support beginning the merger process before the local government election in September.

Nancy Knudsen, who led the push to avoid jumping straight into bed with Port Stephens, said the proper discussions “still haven’t been had”.

Cr Knudsen said the council hadn’t considered the impact of increased financial assistance grant money after the reintroduced of indexation at the federal budget, and said it needs more certainty that the state government’s promise of a $15 million rescue package will be spent in Dungog, and wants to know that a new council in Port Stephens would still support the merger.

“By merging prematurely with Port Stephens without prior discussion, a new council may be hostile to Dungog Shire,” she said. 

“Engaging now for an outcome that could be acceptable to the residents of both shires after the September election would be a win-win.”

But councillors who supported pursuing a merger now question whether it will even be an option after the election.

“There will be no voluntary mergers after the election because no newly elected council is going to say OK we’ve spent all this money on an election, so now we’ll consider your merger and sack ourselves,” councillor Glenn Wall said. “I’m very disappointed …  last night was the last throw of the dice. Where we go from here into the future I don’t know, if we can't balance the budget I don’t think it will too long before the state government taps us on the shoulder.”

On the same night that the councillors rejected the merger push, they also voted to place their budget for the next financial year on the table. It paints another bleak picture of a council struggling to stay afloat. The council expects to run a deficient of $370,000, excluding about $350,000 in unsecured grant funds needed to “inspect the structural integrity and axle weight loads of the entire timber bridge network”.

“Whilst a grant submission is being lodged, there is no assurance that funding will be secured for these bridge assessments,” Mr Deasey wrote.

He also outlined the impact of the long merger proposal on staff numbers at the council. 

The report states Dungog Council currently has “no finance staff members that have been involved in the preparation of budgets let alone the development of long term financial forecasts”.

“We have no experienced rating staff that have skills in financial modelling for rates, [and] we have no asset accountants that could work closely with the council’s engineering team on asset management plans,” Mr Deasey wrote.

He said the council had amended its budget “to start engaging the community in relation to a special rate variation”, with the potential for an rates increase “greater than the 13 per cent that was included within the council’s improvement plan”. 

“The initial increase will only enable the council to address the short term financial shortfall that continues to recur annually, not the infrastructure backlog, not the long term funding of asset renewals and not the funding required by the council in the matching of funding from the Section 94 contributions fund,” he wrote. 

Mr Deasey has been forthright in his assessment of the council’s financial viability.

In a report before the council meeting on May 1 he outlined a bleak picture of the council’s finances, going as far as calling the kitchen in the council building “a bloody disgrace”.

He said that if the council eventually stood alone it would need to raise rates by 13 per cent for six years – an increase of 108 per cent with indexation – just to “meet the requirements of the asset management plans in terms of increase asset renewals and maintenance expenditure”.

He said the council would need an another 20 per cent to meet staffing costs “in an endeavour to achieve strategic capacity”, as well as finding between $3 and $4 million to upgrade the council’s administration building.

“The administration building is another element just like the timber bridge legacy both of which would need to be financed by loan borrowings,” he said.


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