Local Government Reform

Background

In May 2016, the area south of the M2 Motorway was removed from Hornsby Shire by the State Government and given to the City of Parramatta Council. Hornsby Shire Council strongly protested that decision. The NSW Government’s plan at the time was to merge Ku-ring-gai Council with the remainder of Hornsby Shire Council  That plan did not proceed.

The residents of Hornsby Shire remain significantly disadvantaged by the boundary changes that occurred, despite promises from the NSW Government that Council and residents would not be worse off.

Effect of the NSW State Government decision

The loss of territory has stripped $10 million net per annum from the budget bottom line of Hornsby Shire Council. In an attempt to remedy that situation, Council submitted an Alteration of Boundaries Proposal to the Minister for Local Government and repeatedly produced evidence demonstrating the real impact that the loss of the area has had on Council’s ability to provide services to its residents.

The NSW Government has resisted Council’s attempts to have the area south of the M2 Motorway returned to Hornsby Shire, but it has publicly promised that Council and the residents of Hornsby will not be worse off as a result of the Government’s actions.

NSW State Government partial compensation

The Government’s first steps in meeting this promise was to provide Council with a grant of $90 million to assist in the rehabilitation of Hornsby Quarry ($50 million) and the development of parkland on the former Westleigh Water Board site now owned by Council ($40 million). The rehabilitation of the quarry will take a spoiled piece of land and turn it into 50 hectares of parkland a short walk from Hornsby’s CBD, while the Westleigh project will provide much needed sporting fields and recreational spaces. It is important to note that the grants from the Government will not meet the full cost of the two projects.

Although the grant money was welcomed by Council, it is not enough to undo the damage caused by the Government’s actions. The Government has publicly committed to providing further compensation, with a number of specific assurances that this would be forthcoming before the March 2019 State election, but it did not materialise.

Council's resolution

It is important for all relevant information to be included on the public record so that the Hornsby Shire community is fully aware of the consequences of the failed local government reform process as it applies to Hornsby Shire Council. It is also important that residents are aware of the efforts that have been undertaken by Council to seek justice in this matter. To achieve this aim, Deputy General Manager’s Report No. CS7/19 was submitted for Council’s consideration at the 13 March 2019 General Meeting.

Report No. CS7/19 was structured to provide Council with a complete record of the local government reform process that has been in train since 2011; to show Council’s significant contribution to the reform process; to detail Council’s struggle to convince the Government that its actions have had an ongoing and significant financial impact on Hornsby Shire; and to advise on the compensation that has so far been forthcoming from the Government.

Following Council’s consideration of the Report, it was resolved in part that:

• Council note that to date, the NSW Government has provided $90 million tied to specific capital projects to compensate Hornsby Shire for the loss of these lands and note that BIS Oxford Economics have identified that a further amount of $168 million would be required to fully compensate Hornsby for the loss of the lands south of the M2 Motorway.
• On behalf of the residents and ratepayers of Hornsby, Council place on record its disappointment that during the current term of this NSW State Government they have failed to address the issue of the outstanding compensation for Hornsby Shire despite ongoing negotiations and the provision of additional financial information requested by the Government.
• As advocates for the Hornsby Shire, Council continue to press this issue with whomever forms Government in NSW after 23 March 2019.
• Deputy General Manager’s Report No. CS7/19 and all other relevant documentation associated with the Fit for the Future Local Government Reform Program be placed on Council's website, so that interested residents can view the issues and Council's response.
• Council write to both the NSW Premier and the Opposition Leader seeking their commitment to fully compensating Council for losses sustained as a result of the loss of land south of the M2 Motorway should they be elected. This compensation must contain a cash component not tied to projects in order for Council to adequately invest the funds for ongoing long term revenue.

Documents

In line with Council’s resolution, the following documents are provided for the information of the residents of Hornsby Shire:

• NSW Treasurer's letter to the Mayor dated 24 July 2019
• NSW Premier’s letter to the Mayor dated 15 July 2019
• Mayor’s letter to the NSW Treasurer dated 27 June 2019
• Mayor’s letter to the NSW Premier dated 26 June 2019
• NSW Premier's response to Mayor's letter of 18 March 2019
• Deputy General Manager’s Report No. CS7/19 – NSW Government’s Local Government Reform Process and Compensation for Council (submitted for consideration at Council’s 13 March 2019 General Meeting).
• Letters dated 18 March 2019 to The Hon Gladys Berejiklian (Premier of NSW) and Mr Michael Daley (Leader of the Opposition).
• Council’s Alteration of Boundaries Proposal seeking the return of the former Hornsby Shire Council area south of the M2 Motorway which was transferred to the City of Parramatta Council on 12 May 2016.
• Crosby Textor Research – provides insights into the community’s view about reforms proposed by the Independent Local Government Review Panel in its April 2013 Discussion Paper.
• PWC Research – Preliminary Analysis of a Hills/Hornsby Council merger - provides details of the potential issues, benefits, and disadvantages associated with Hornsby Shire Council amalgamating with its neighbouring councils.
• KPMG Research - Analysis of local government reform options in the Northern District area. Final Report | Summary.

Timeline