First thoughts on the Wollongong/Shellharbour Merger

First thoughts on the Wollongong/Shellharbour Merger

Submitted by James Purser on Fri, 01/08/2016 - 12:03

So we finally have some actual detail about how the proposed Wollongong/Shellharbour LGA merger might work. Not just the fluff about "so many millions" that might be spent, but actual structural information.

First off let's have a look at how the proposed new LGA is going to work from a representative point of view.

Wollongong currently has the following:

  • 3 Wards: Four Councillors in each
  • 1 Separately Elected Lord Mayor
  • 1 Councillor (including Lord Mayor) for every 15,907 residents

Shellharbour currently has the following:

  • 7 Councillors (the entire council area is the ward essentially)
  • Mayor is elected from within and by the currently sitting Councillors
  • 1 Councillor for every 9,823 residents

The new proposed LGA is going to have the following:

  • 13 Councillors
  • 1 Councillor for every 21,197 residents
  • Nothing is mentioned about Mayor selection

I'm not sure how to feel about this. On the one hand, it is an obvious reduction in Councillors to residents, especially for those coming from the Shellharbour LGA. On the other hand, even if the number of Councillors was boosted to 15 (the maximum allowed under current legislation) we're still looking at a Councillor to Resident ratio of 1:18370.

There are two other questions about representation that are not tackled in the proposal. Selection of Mayor (remember Wollongong has a Mayor elected by the electorate and Shellharbour is voted on by Councillors), and whether or not the new body will work with Wards, or a simple single ward system.

Personally I prefer the electorate to elect the mayor and wards ensure that Councillors at least nominally represent the distinct regions within the LGA. We'll have to wait and see what happens.

The financial part of the proposal is interesting as well.


Both Wollongong and Shellharbour have approval for Special Rate Variations (the ability to raise rates beyond the nominal cap imposed by the State Government). Wollongong has a cumulative 11.3% (3 years starting 14/15) and Shellharbour has a cumulative 28.9% (4 years starting 13/14). While the proposal suggests that the savings to be found in reduction of duplication in the newly merged body could reduce the pressure on rate rises, I think it's going to take a little while before the community will start seeing those benefits flow through in reduced rates bills.

Cost Reduction

Most of the cost reductions mentioned in the proposal focus around elliminating duplication in the new organisation.

  • $8 million from "streamlining senior positions"
  • $56 million from "redployment of back office and admin functions"
  • $19 million through  increased purchasing power (more bang for your buck)
  • $2.5 million from reduction of elected officials

Note all of the above numbers are spread out over 20 years. So that's meant to be a saving of about $3.75 million a year.

That's all very good and looks great.

Except, how much is going to be spent on merging the two councils systems. Just the two different IT systems are going to cost a fair chunk to merge properly (and that's assuming that things don't go wrong), then you need to look at front desk, library systems and so on. I honestly think that the estimates given are optimistic to say the least.

Infrastructure Management

The other thing I have thoughts about in this proposal is infrastructure management.

Both Shellharbour and Wollongong have large developments occuring within their borders. West Dapto has an infrastructure backlog as long as your arm, Albion park is continuing to be built out and there's an ongoing list of issues around flood management to the north of the City.

How exactly will the merged entity be any better at managing the demands, especially with the expected reduction in "back office" staff who deal with this every day?

Honestly I'm not sold on the merger. The proposed economic benefits don't really stack up, at least from a Wollongong Council point of view. For those coming from Shellharbour? Yeah I can see having access to the resources of a larger council being a benefit, but they definitely lose in terms of access to their elected reps.

We shall see.

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