WITH just hours remaining for NSW local government bodies to lodge their submissions for the State Government's 'Fit for the Future' review, a good many councils across the Mid North Coast are jumping about like cats on a hot piece of corro.

And with fair reason too - as despite repeated assurances from the Government of no forced amalgamations, many - at least off the record - claim a trap has been set.

That is, those councils ruled to be financially doomed may have little choice but to explore getting together with their neighbours.

Associate Professor Roberta Ryan, director of the Centre for Local Government within the University of Technology, Sydney, said the stakes are high, especially so in rural and regional communities.

While the argument for some consolidation of councils in metropolitan centres is fairly strong, Prof Ryan said there would be significant impacts for smaller communities if shire councils found themselves compelled to merge.

A telling factor would be jobs 'on the ground', as councils are the single biggest employer in 60 of Australia's Local Government Areas (LGAs).

"I've always said if you want to strengthen the region, strengthen local government because they are a significant employer. And it's employment from professional people like accountants and engineers through to outdoor staff. It's a very diverse employment pool," Prof Ryan told Fairfax North Coast.

"What's going to happen if you close a council and relocate it to another area? That source of employment in that locality is going to be hard to get back."

Prof Ryan said the Fit for the Future exercise though could prove beneficial.

"There's always an opportunity to take a look at how we can do things better in local government, there's no question about that," she said.

"My experience is that people in out of metropolitan areas have a lot of concerns that they are going to lose local representation if council areas get bigger.

"Spatially, the areas are really large, and it is possibly more difficult for people to have direct contact with their elected members if councils are larger.

"The State Government's still saying there's no forced amalgamations, they haven't changed their policy on that.

"Some councils will be struggling with financial sustainability, and having a close look at that I think can be good. Then I guess it's up to the Government to say what's going to happen from there.

"Putting councils together that are already struggling is not going to help."

Prof Ryan underlined that larger councils do have some inherent advantages:

"Bigger councils can do more complex service provision. The things local governments do are much more complicated every year. Once upon a time we had swimming pools, now we have leisure centres, and libraries used to be the places where people borrowed books but now libraries do much more complicated things than that etc.

"There's arguments on one side I think for bigger organisations to potentially employ more qualified staff and deal with some of the more complex service delivery that local government does. But on the other side there is the concern of how do you keep things local?

"If there's opportunities for a couple of councils that are doing pretty well to come together or a bigger regional council to potentially work with some smaller outlying councils, then I think that's always been the idea behind the original approach."

Prof Ryan noted there would be a myriad of challenges and costs associated with any amalgamation of councils.

Individual councils often had distinct IT systems, financial management approaches, and different ways in which they assess their assets and their service levels.

"There can be significant costs involved with just the process of bringing people together," she said.

And the arguments both for and against local government consolidation are not holistic.

"Fit for the Future goes to the question of what do you think the main purpose here is - and the conversation is dominated by financial drivers, but there's a whole lot of things that local government does that communities value - and communities pay for, anyway," Prof Ryan said.

"Communities pay for the level of service that they receive and they are usually involved in those decisions.

"Communities have been working through their own financial sustainability with councils for years. So communities are often quite well educated about this is regional and rural areas."

VIEWPOINT: Nambucca mayor Rhonda Hoban

FACED with a growing infrastructure backlog and report cards labelling almost half of the councils in NSW as financially weak with a negative outlook, reform is essential.

The risk of business as usual is critical asset failure - the failure of vital assets leaving communities disadvantaged and potentially isolated.

I was pleased when State and local government agreed to work together to make local government financially sustainable and 'Fit for the Future'.

Councils must work with their communities to identify priorities, agree on service levels and ensure that what limited funds they have are spent wisely and efficiently. 

However it seems that the promised reform has dwindled to Joint Organisations and the possibility of forced amalgamations. I am not convinced that merging cash-strapped councils to achieve "scale and capacity" is going to solve financial woes. It may well only produce cash strapped mega-councils.

Forced amalgamations have occurred in both Victoria and Queensland but we don't see them held up as shining examples of financial sustainability. One has to ask, why not?

The proposed Joint Organisations appear to be organisations of individual councils that will collaborate on regional strategic planning; inter-governmental collaboration and regional leadership/advocacy. I see nothing in Joint Organisations that will improve financial sustainability. There is a danger that they will become an extra layer of government requiring administrative staff at an additional cost to ratepayers.

There is however a real opportunity for councils to gain all of the potential benefits of mergers without losing local identity or local representation and this is by sharing services.

There are many administrative functions of councils that could be shared to achieve economies of scale without having any impact on a community's local identity. In fact they are not visible to the average ratepayer. Functions such as human resources, information technology, records management, purchasing, safety and risk management, internal audit, and governance are carried out by every council in NSW.

We are bound by the same regulatory requirements so for these back-of-house services, our requirements are the same. These are areas where councils could work together and share resources to achieve economies of scale.

As an example, all councils have rate notices printed and distributed. Whether they are printed by 152 different firms at a premium price or just one at a discount for volume makes no difference to the ratepayer.

The ratepayer looks to the bottom line on the bill, and that is what this reform exercise needs to be about.

VIEWPOINT: Nambucca general manager Michael Coulter

THE FINAL report of the NSW Independent Local Government Review Panel in October 2013, 'Revitalising Local Government', triggered some difficult but necessary scrutiny and debate about the direction of NSW local government.  

It has thrown welcome light on the parlous state of local government finances in most of regional NSW, including the Mid North Coast.

Like many councils, Nambucca Shire Council has been recording continuous and significant annual operating deficits in the millions of dollars, meaning that the council has been unable to satisfactorily fund the replacement of its road, bridge, buildings and other physical assets as they wear out.  

The problem is not new and has many contributing factors including constraints on revenue growth and an expansion of the range and scope of local government services.

In the case of the Mid North Coas,t we have some particular revenue and expense disability factors. 

These include the large proportion of land (National Parks and State Forests) which yields no rate revenue; the higher percentage of ratepayers who qualify for a pensioner discount; our topography requiring many bridges to provide access to rural residents; and of course our relatively higher rainfall which causes roads and bridges to deteriorate at a faster rate.

And what is Nambucca Shire Council doing to be Fit for the Future?

* We have reduced the assets we are responsible for by transferring them to other organisations. The Macksville Showground and Saleyards; a Senior Citizens Centre; Museum; Public Hall and Pre-School are examples.

* We critically review the assets we maintain and replace. Does the bridge have to be two lanes? Can it be a single lane or is there suitable alternate access so we don't need to replace the bridge at all?

* We have introduced labour saving technology such as an electronic business paper, electronic filing and solar powered compacting garbage bins.

* To achieve economies of scale, we will share service provision with neighbouring councils, such as through our shared waste service with Bellingen and Coffs Harbour councils. 

* We are reviewing all the services we provide to critically assess whether or not we can reduce those services or their cost of provision.

* We have reviewed our organisation structure and reduced our equivalent full time staff by about 10 per cent.

* And on the revenue side we have consulted with our community about our finances and obtained approval for eight special rate variations over the past 10 years.