MAITLAND – DUNGOG PROPOSED MERGER SUBMISSION Maitland Business Chamber opposes a forced merger as this proposition makes poor business sense. There is no basis of need upon which Maitland should seek to merge with any other Council and it is the circumstances of neighbouring Dungog that see Maitland drawn into discussion. The preferred option for both Maitland and Dungog is to stand alone.

Financial sustainability cannot be achieved through merger savings, productivity nor rationalisation of services. The merger will not bring a financial bonanza.

Additional revenue is essential for a merged council to have any prospect of achieving the challenging outcome of long term financial sustainability. An exemption from four year rating freeze would be imperative as would additional funding and support for community infrastructure improvement. (a) Financial advantages or disadvantages There is no proven financial advantage.

The KPMG report commissioned by the NSW Government shows a saving of $15M over 20 years, substantially less than 1% of the combined councils’ current operating revenue, year on year. Streamlining of administrative functions accounts for 65% of predicted savings, real world scenarios indicate that a significant increase in total staff would be required. In addition, $15M would be contributed by the state government for the merger. Even in this upside scenario the net benefit is zero. The validity of figures predicted over a 20 year horizon is questionable.

Morrison Low, in a report commissioned by Maitland City Council & Dungog council, examined the particular local circumstance. For a variety of reasons, the $1.25M per year in savings on the cost of governance, executive management, information technology and plant Page 1 of 7 ________________________________________________________________________________________________________________________________________________________________________________

· 121 Lawes Street, East Maitland NSW 2320 · P: 02 4934 3343 · E: [email protected]

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will be more than offset by required increases rather than reductions in staffing, harmonisation of service delivery and rating issues leading to a $1.3M operating deficit for the first four years. Morrison Low modelling indicates no financial savings would result from Maitland- Dungog merger. A NPV net cost of between $4.5M and $9.5M depending on the availability and allocation of any state Government funding. Dungog in particular has outstanding necessary but as yet unfunded infrastructure projects. The merged council will in all events fail to meet the IPART real operating expenditure benchmark as the merger offers few benefits. (b) Community of interest and geographic cohesion Maitland Business Chamber notes similarities and differences between Maitland and Dungog geography and community interest.

Important to opposing a merger are the increasingly divergent outlooks of the two communities. Maitland is a progressive and increasingly urban environment with a focus on diversity, development and leveraging our location to create, attract and expand business. Local economic drivers are manufacturing and construction with a focus on commercial enterprise. Dungog’s economy is driven by agriculture, forestry and tourism with a focus on preserving a rural lifestyle and a pristine natural environment. Maitland population is growing at 2.1 – 2.5% per annum from a current 75,000, close to 30% are under 19 and 13% over 65. Dungog’s population of 9,100 is static or declining and aging, 26% under 19 and 18% over 65. Health and social assistance industries are major employers in both communities. Dungog Council covers a large geographic region (2248 km2) with a small population (9100) with the associated problems of maintaining an extensive road network and other public infrastructure. Maitland Council covers a small geographic region (382 km2) with a large population (75,000+).

The city of Maitland and Dungog town are linked by rail and road. Maitland due to its larger size operates as a services and employment hub for a collection of rural communities within Dungog shire. Page 2 of 7 ________________________________________________________________________________________________________________________________________________________________________________

· 121 Lawes Street, East Maitland NSW 2320 · P: 02 4934 3343 · E: [email protected]

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PO Box 77, Maitland NSW 2320 · F: 02 4933 2974 www.maitlandbusiness.com.au

Maitland residents would have limited reason to venture into Dungog other than occasional tourism to Barrington Tops, 100kms away, 1 hour 30 minutes travel on country roads. Maitland sports teams may also venture to Dungog but this is entirely dependent on the particular sport, as boundaries may be drawn in any direction from Maitland and change season to season. (c) historical and traditional values and the impact of change on them The future of the two towns is changing in different directions from their similar historical and traditional values. Maitland seeks to promote business, development and growth with appropriate incorporation of history while Dungog adheres to a philosophy of preserving local business, history and unspoilt environments.

Maitland and Dungog share historical roots with both towns established during the early 1800s. Dungog was a prosperous agricultural town while Maitland also had strong agriculture its economy was more diverse with a river port and government settlement.

Both communities share strong pride in their region, high levels of participation and inclusiveness in decision making and a range of events and celebrations highlighting the uniqueness of each location. Tourism is actively promoted and is important to the local economies. (d) the attitude of the residents and ratepayers of the areas concerned The off again, on again nature Maitland - Dungog proposal has left the Maitland community in a position where is has been forced to respond in a tight timeframe. The Maitland community is confused about whether this is a real proposition with many residents still believing the merger is off the table. At a minimum, this warrants further consultation and additional time being allowed.

The real threat felt in Maitland is that the trust and investment to implement a special rate variation to improve service delivery will be undermined in a merger with resources necessarily diverted to Dungog. Business in particular has endured many hardships with a vision to a bright future. Maitland Business Chamber strongly supports the efforts and performance of Maitland City Council which are now starting to show dividends. Page 3 of 7 ________________________________________________________________________________________________________________________________________________________________________________

· 121 Lawes Street, East Maitland NSW 2320 · P: 02 4934 3343 · E: [email protected]

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PO Box 77, Maitland NSW 2320 · F: 02 4933 2974 www.maitlandbusiness.com.au

Dungog has certainly faced different circumstances and issues and has no doubt been disadvantaged by previous state Government decisions. Nonetheless, as an external observer is appears Dungog Council is deeply divided and has done little to help itself. Maitland citizens are aware of the many issues faced by Dungog Council particularly financial and if forced to merge will have no choice but to assist Dungog. . Maitland ratepayers are unwilling to compensate for rating and service levels in Dungog well below those in Maitland. The citizens of Maitland should not be forced to pay for failures in Dungog Shire whatever their source.

If a merger between Maitland and Dungog proceeds the NSW government must provide financial assistance to protect the benefits the community of Maitland has earned. A four year moratorium on rate rises is opposed by Maitland Business Chamber as an insurmountable barrier to a successful merger. (e) elected representation for residents and ratepayers Maitland City Council is proactive and achieves real results for business and residents. The current 4 wards with 13 representatives have generally served the community well. A mayor by popular vote is critical to a successful council in Maitland. No other model is acceptable to achieve real democracy and outcomes for the community.

Dungog Council has been somewhat effective when forced to function with limited resources. The large number of councillors to population in Dungog may have been a contributing factor in their apparent inability to reach consensus.

A merged council is challenged in securing elected representation from the Dungog LGA, special consideration may be required. Maitland Business Chamber is opposed to a forced merger of Maitland – Dungog. Should a merger proceed, the current Maitland City Council model with 4 wards, 13 representatives and a popularly elected mayor should be adopted to the new area. This has proven effective. A reduction in representatives would not meet the needs of more residents spread over a large area. Page 4 of 7 ________________________________________________________________________________________________________________________________________________________________________________

· 121 Lawes Street, East Maitland NSW 2320 · P: 02 4934 3343 · E: [email protected]

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PO Box 77, Maitland NSW 2320 · F: 02 4933 2974 www.maitlandbusiness.com.au

(e1) provision of adequate, equitable and appropriate services and facilities Maitland Business Chamber believes that a merged council will face great challenges to provide adequate, equitable and appropriate services and facilities. Maintaining existing service levels of Maitland and Dungog will leave the residents of Dungog in continued disadvantage.

If current rates are maintained Maitland will forgo services and facilities to support and improve Dungog. This will provide better services for lower contribution to a small section of the population. Alternatively, services and facilities could be allocated in proportion to contribution creating a disadvantaged community in Dungog.

Combined infrastructure backlog as currently reported is $116 million across Maitland Dungog. The majority of higher risk and more urgent items being in Dungog once again council resources will be inequitably diverted from Maitland.

To harmonise service levels staffing will need to increase adding to the cost of the merger. Rating for Dungog residents cannot be maintained at current levels for any period after a merger. Dungog residents would face rate rises of at least 100%, these changes would need to be implemented without delay. (e2) employment of the staff by the councils Maitland Business Chamber submits an exemption or variation to protections under the Local Government Act will be needed for a merger to deliver any sensible staffing consolidation.

Staffing constraints are an obstacle to achieving any savings through rationalisation of staff. For three years for all council employees below senior staff level will be protected under the Local Government Act. In Dungog, a rural centres with population below 5,000, staff numbers must be retained as far as is reasonably practicable indefinitely. This will render changes in staffing and location of staff very challenging. Even employees of the merged entity who currently travel through Maitland to work in Dungog would not be able to change office. If staff who commute to Dungog from outside the township relocate to Maitland Office the headcount at Dungog must remain the same. The current situation and regulations Page 5 of 7 ________________________________________________________________________________________________________________________________________________________________________________

· 121 Lawes Street, East Maitland NSW 2320 · P: 02 4934 3343 · E: [email protected]

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PO Box 77, Maitland NSW 2320 · F: 02 4933 2974 www.maitlandbusiness.com.au

will lead to staffing inefficiencies and increased staffing costs.

A council office in Dungog staffed by local residents would remain necessary to administer the merged council area for the foreseeable future.

Dungog and Maitland have the lowest staff to population ratios in their respective council groups. The combined number of staff for both councils is 50-90 staff below staffing ratios of councils similar in size to the merged entity. Maitland Business Chamber supports evidence that staff increases of at least 50 employees will be need to maintain service levels and address infrastructure backlog across a large geographic area with no high density dwellings, only 10% medium density, many flood prone areas and an extensive road network. (e3) the impact on rural communities Rural communities in Dungog could be negatively impacted in a number of ways including the promotion of business development that is a priority within Maitland being extended into the Dungog community against their expressed wishes to maintain a country lifestyle and protect their historical and natural environment. A dramatic increase in rates will also be an immediate negative impact. In the longer term they may benefit from better service, facilities and infrastructure provided necessary funding is available to the merged council. Improved employment opportunities could result from expansion of business development into the current Dungog area.

Maitland Business Chamber identifies Maitland as an urban community in a semi-rural area and foresees a drain on resources to advance Maitland’s commercial development as a risk of the proposed merger. The Hunter Region has suffered a number of setbacks in its economy recently and Maitland business can ill-afford redirection of priorities to maintaining small rural pockets in Dungog. (e4) desirability of wards If Dungog’s small population is to have any chance of representation in a merged council wards would be necessary. It will be challenge to represent both business and environmental concerns in Dungog area with only a single representative. It is a real risk that Dungog’s large area will not be protected as decisions will be overborn by the greater representation of Page 6 of 7 ________________________________________________________________________________________________________________________________________________________________________________

· 121 Lawes Street, East Maitland NSW 2320 · P: 02 4934 3343 · E: [email protected]

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PO Box 77, Maitland NSW 2320 · F: 02 4933 2974 www.maitlandbusiness.com.au

population centres in the Maitland geographic area. (e5) effective representation of diverse communities In a merged Maitland-Dungog council, the Dungog area could become a council within a council. The peaceful country lifestyle with a focus on agriculture in conjunction with preservation of pristine natural environments is at odds with the pervasively urban, commercial and development priorities of the Maitland community. As the population of Dungog is relatively small it is likely that their interests will be represented by only one or two members of a 13 member council. This scenario does not seem an effective voice for a much larger geographic area and stands to threaten the values of both communities. (f) other factors relevant to efficient and effective local government Other options such as boundary adjustments may be a more effective in achieving the benefits sought. An alternative might be an expanded Maitland Council area incorporating communities of interest with a manufacturing and commercial focus such as Beresfield.

It is of paramount importance that any change to councils be considered in light of the Hunter Regional Plan including Hunter City with the possibility of aligning council areas with Hunter City districts. Maitland’s future is as an urban commercial centre linked to Newcastle. Its historical position as a rural agricultural centre is diminishing. Maitland City Council has been effective in maintaining an attractive semi-rural lifestyle while sustainably advancing development. Contact Details: Craig McGregor, President - M: 0419 115 444 Fiona Buchanan, Executive Officer - M: 0429 343 340

Friday, 15 April 2016

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· 121 Lawes Street, East Maitland NSW 2320 · P: 02 4934 3343 · E: [email protected]

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PO Box 77, Maitland NSW 2320 · F: 02 4933 2974 www.maitlandbusiness.com.au