Checklist for council amalgamations

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Council amalgamations and sharing of resources are on the agenda in West Australia, South Australia and New South Wales, and local council administrators and managers have a wide catalogue of issues they need to consider, according to Maddock’s local government partner, Prue Burns.

The most active amalgamation program is in NSW where an independent review identified that a third of NSW councils are at risk, either because of inadequate revenue or declining population or both.

Burns says the most obvious matter is to have a plan around the needs of ratepayers, community, and other stakeholders, including a well-constructed communications proposal.

“Developing an overall strategic plan is also vital to help direct the amalgamation,” according to Burns.

This ensures a consistent approach to planning and land management and enables differing demographic and geographical conditions to be addressed.

Maddock’s senior associate Todd Neal says the most important lesson for councils looking to share their back office resources is to ensure both parties are firmly committed to making it work.

“In our experience, binding enforceable relationships are preferable as they provide certainty as to the participation of the councils,” says. Loosely worded memoranda of understanding are weak as they will allow councils to cherry pick the extent of their involvement to the detriment of the collective purpose.

For councils considering mergers, Burns says a plan to address human resources and cultural issues between the councils is arguably the most important matter to prepare for.

“We often find employment issues to be very challenging and an area where sound legal advice is needed to ensure a smooth transition.”

“There are specific legal requirements set out under the relevant local government legislation as well as a raft of other statutory requirements,” says Burns.

“Financial considerations — including any loans and commitments to state Treasuries — need to be identified, as well as asset management and the infrastructure requirements of the merged organisations.”

“Technology integration is often complex and general managers need to consider the skills of staff and what remote access technology is needed to enable field staff to carry out tasks out of the office. Where the amalgamated council has a much larger geographic area there will also be a need to support satellite offices.”

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