Councils fear that a decision to set a threshold criterion of "sufficient scale and capacity" for councils in deciding whether they are "fit for the future" will inevitably mean they will be forced into mergers.
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The chair of the Independent Pricing and Regulatory Tribunal, Peter Boxall, told the first day of public consultations on IPART's methodology for assessing the local government sector that he was still deciding whether to set a numerical target on population as part of the threshold test.
A population target over 100,000 would force a raft of councils into considering mergers or risk being deemed unfit. Findings of "not fit for the future" throughout the sector would dramatically strengthen the Baird government's hand in moving to forced amalgamations.
A survey by the Herald found that only two Sydney councils were in favour or amalgamation, with most strenuously opposed.
At the 2011 Census, 23 of Sydney's 41 councils had populations of fewer than 100,000 residents. Of those, nine have fewer than 50,000, including Mosman, Manly, Ashfield, Strathfield and Botany Bay.
The smallest is Hunters Hill municipality with 13,900 residents across five-and-a-half suburbs.
It is firmly in the firing line as the state government pushes ahead with its Fit For the Future program to reduce the number of Sydney councils from 42 to about 15.
The Minister for Local Government, Paul Toole, said population targets were a question for IPART. A previous Office of Local Government report has suggested 250,000 as the minimum size for councils.
Mr Boxall said it was open to councils to put in submissions to stay as they are but they needed to meet all the criteria including the threshold scale and capacity question. This includes financial scale, the ability to expand services, assess complex planning projects and be capable of engaging with state and federal government.
A picture is emerging that many councils prefer to stay as they are, but present a submission to IPART to form what it calls a Joint Organisation – a strategic alliance with some shared services. These might include tendering, payroll, childcare, road making and waste services. Councils already work together in some areas, particularly in tendering and waste management.
Mr Boxall said councils could propose joint organisations, but this would be considered after the first stage in which they were assessed against the criteria and deemed fit or not fit.
One query raised by several councils was what would happen if one member of a proposed merger cluster was declared "fit for the future" but others were deemed not fit.
Leichhardt councillor Darcy Byrne said Leichhardt would submit that it met all seven benchmarks but he anticipated that others in the proposed merger group of six would not meet the criteria.
Mr Boxall said he would take the question "on board".
Manly council raised the requirement of demonstrating that it would have a more robust revenue base in the future. "'What does that mean? We are lucky, we already have very expensive parking. Do we need to do more?"
Councils will be evaluated based on four criteria: scale and capacity; sustainability; infrastructure and service management; and efficiency.
Councils' stances on proposed amalgamations
NO: Hunters Hill, Ryde, Lane Cove, Ku-Ring-Gai, Manly, Pittwater, Auburn, Holroyd, Botany Bay, Leichhardt, Strathfield, Ashfield, Canada Bay, Burwood, Hurstville, Marrickville, Woollahra, Mosman, Fairfield, North Sydney, Kogarah, Randwick, City of Sydney, Liverpool, Canterbury
YES: Hornsby, Warringah
UNDECIDED: Willoughby (still consulting), Rockdale (still doing consultation), Parramatta (still consulting), Waverley (preparing report on consultation for council)
NO MERGER REQUIRED: Bankstown, Blacktown, Blue Mountains, Camden, Campbelltown, Hawkesbury, The Hills, Penrith, Sutherland, Wollondilly
