A Riverina council has been forced to commit $230,000 of ratepayers' money towards its demerger bill as it fights to keep the deal alive.
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Cootamundra-Gundagai Regional Council announced it had allocated the funds for "demerger planning" on the back of a recent visit by the minister for local government Ron Hoenig where the council was told it would have to jump through yet another hoop to demerge.
After months of lobbying by the council, the minister finally met with councillors on October 3, only to announce that Labor had been unsuccessful in finding a statutory mechanism under the current legislation to enable the de-amalgamation of the councils into two independent and fully functioning entities.
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"I'm asking the councillors to set up two different councils and to divide each of those councils and if they are able to do that then I am prepared to proclaim two separate councils so they can go to the polls next year," Mr Hoenig told the council.
This is despite former minister for local government Wendy Tuckerman announcing the council would be demerged in August 2022.
It has now been well over a year since that announcement and CGRC mayor Charlie Sheahan recently expressed his "extreme frustration" at demerger delays, arguing that the current situation was creating a lot of uncertainty for staff with many already leaving.
Cr Sheahan also reminded the minister of Labor's strong criticism of the forced mergers while in opposition and that it had supported an amendment to the Local Government Act 1993 that would put the cost of demerging onto the state government.
![Cootamundra-Gundagai Regional Council mayor Charlie Sheahan with member for Cootamundra Steph Cooke earlier this month. Picture by Ash Smith Cootamundra-Gundagai Regional Council mayor Charlie Sheahan with member for Cootamundra Steph Cooke earlier this month. Picture by Ash Smith](/images/transform/v1/crop/frm/172474527/e747c377-b935-40bb-873e-ccc730aadd92.jpg/r0_23_1017_597_w1200_h678_fmax.jpg)
The council late last week said Mr Hoenig had "effectively...put the ball back into [our] court requesting [we] present a case to him... [showing] how the two councils would be financially viable if a demerger was to be granted."
A council spokesperson said councillors were "disappointed" at the minister's statement and the reasoning he used in deciding not to proceed with the demerger under the current legislation.
The general manager Steve McGrath has now investigated the matter and presented a detailed report to the council outlining where it will stand should it decide to proceed with the demerger.
As a result, council has now agreed to seek further legal advice and engage a senior counsel for assistance.
The council has also agreed to prepare a detailed implementation plan that would create two sustainable councils and lodge that with Mr Hoenig and the Local Government Boundaries Commission.
Council agreed to allocate $230,000 from its 2023/24 budget for demerger planning, in an effort to reduce the projected operating surplus for the present financial year.
Meanwhile, councillor Logan Collins called for a meeting with shadow minister for local government Wendy Tuckerman and member for Cootamundra Steph Cooke to discuss the implications of Labor's new demerger method as a matter of urgency.
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