The forecast $30 million “financial benefit" of a merger between Maitland and Dungog councils should not be confused with savings, Maitland general manager David Evans says.
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Local Government Minister Paul Toole noted in the foreword of the Maitland-Dungog merger business case, conducted by KPMG, that the new council stood to gain $30 million in financial benefits over two decades.
“The merger is expected to lead to about $15 million in net financial savings over 20 years and provide a total financial benefit of $30 million,” the report noted.
But Mr Evans the community should be careful not to confuse the $30 million total as savings.
He said half that figure was made up of a $5 million grant to help pay for direct costs of the merger and a $10 million community infrastructure grant on offer for councils that opt to merge.
It means the merged council would save about $750,000 a year, on average, over 20 years.
Mr Evans said the $5 million grant would cover about half the predicted merger cost.
The $10 million infrastructure grant could be spent on the combined $100 million infrastructure backlog predicted for the merged council.
“Those [$15 million in grants] are not savings. That’s money to do stuff with,” Mr Evans said.
“The $5 million is not a saving, it’s offsetting the cost to the community of a merger. They [the government] call it a saving.
“The other $15 million over 20 years, would save the two communities $375,000 a year [each] relative to the way the councils operate on their [KPMG’s] assessment.”
Mr Evans said Maitland council worked to a 10 year financial plan and described a 20 year financial forecast as rubbery.
The prospect of a merger between Maitland and the financially struggling Dungog council came back into the frame in recent weeks, despite the government supporting an alternative union between Dungog and Gloucester Shire Council late last year.
Maitland Council is encouraging residents to read its independent merger business case, conducted by Morrison Low, which has been published on the Maitland Your Say website.
Residents can visit the NSW Boundary Review website to lodge feedback and register for a public forum about the merger in Maitland on April 7.
