Demalgamation could be costly for Guyra, mayor Simon Murray warns

The cost of going it alone: disaster for Guyra?

Going it alone could be costly for Guyra, Armidale Regional Council mayor Simon Murray warns.

That could be bad news for Save and Grow Guyra, which hopes state elections in March will lead to the restoration of the former Guyra Shire Council, forcibly amalgamated with Armidale Dumaresq two years ago.

Cr Murray – a Guyra resident, and the former council's deputy mayor – and Hans Hietbrink, last mayor of Guyra, have both stated that Guyra was struggling financially before the merger, and simply cannot afford to stand by itself.

“The reality is: we didn’t meet financial requirements; we were struggling all the time,” Cr Murray said.

“Look at the cold, hard facts, not the emotion.”

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Labor, the Greens, and the Shooters, Fishers and Farmers Party have all promised a plebiscite if they get in.

“There was, however, never any mention of providing funds to accommodate a demerger,” Cr Murray said.

“You’ve still got to have all the ratepayers you had before; you need a general manager, a planner, a health officer, rangers, all the outdoor staff, a stack of indoor staff – from a population of 3500, on top of the actual separation costs.”

All the IT has been amalgamated into one system – so, if Guyra were to separate, Cr Murray said, it would have to set up its own independent systems.

Those figures could be too expensive for Guyra; a council in Tasmania recently paid $3.5 million for their IT alone.

Even before the merger, Guyra and Armidale used to work together.

Armidale and Guyra – as well as Walcha and Uralla – were under threat of amalgamation years ago, and got out of it by saying they would work together.

IT was done out of Armidale Dumaresq, while Guyra managed the payroll.

“If there’s a demerger, though,” Cr Murray said, “I could see Armidale Regional Council just saying: ‘Well, start up again.’ But to do that, they’ll need a lot of money.”

Rates hike

Residents of a resurrected Guyra shire could see rates increase by at least 55 per cent, judging by Uralla’s experience, Cr Murray believes.

Uralla council narrowly escaped a forced merger in 2015, by agreeing to a 10 or 20 per cent rate variation. Now, residents are faced with a rate hike of more than 54.5 per cent in the next financial year.

By 2020, the Uralla council’s unrestricted cash reserves are expected to fall into the red, leading it to fail many Office of Local Government performance measures. 

Without the hike, the Uralla council won’t be able to provide current service levels, and assets will deteriorate.

Uralla is double Guyra’s population, with 3500 people, but has a similar road network to maintain.

“Guyra’s rates increase would have to be far higher than the 54 per cent at Uralla,” Cr Murray said.

The Fit for the Future scheme that amalgamated Guyra would have increased rates in the old Guyra Shire by 30 per cent. That was when Tingha was part of the shire; now, Now, Tingha is heading to Inverell Shire.

“This council has in the old Guyra Shire a thousand kilometres of rural roads to maintain,” Hans Hietbrink said at Save and Grow Guyra’s public meeting in October. “Now you're looking at a population that's reduced if Tingha goes to 3,500. It is unsustainable.”

Councils in NSW, Mr Hietbrink explained, will always be behind the eight-ball because of IPART (Independent Pricing and Regulatory Tribunal NSW), which determines the maximum percentage amount by which a council may increase its general income for the year (the rate peg).

For almost all councils, general income consists entirely of rates income. Councils cannot increase rates or the rate pool without a special rate variation, but can readjust rates accordingly.

Rates are frozen for three years after the merger; that is, councils are forbidden to increase rates – but at the end of that period, they will need to increase rates.

“Costs have gone up,” Mr Hietbrink said; “rate peg has been minimal; and even prior to the amalgamation, Guyra Shire Council, we said quite blatantly if we're going to stand alone, we are going to have to put in for a special rate variation.

"You cannot provide services without money,” Mr Hietbrink said, “and at the moment, councils are going downhill because they are not getting enough money.”

Save and Grow Guyra (formerly known as Guyra Anti Council Amalgamation – ANTY) will hold a demalgamation meeting at the Bowling Club this Thursday, at 7pm.