It's time to review the boundaries of south-west councils, according to former local government minister Roger Hallam who oversaw the biggest municipal shake-up in the state's history 25 years ago.
It's something that has the backing of at least two former Warrnambool mayors who say the government "got it wrong" back then and that the boundaries of Warrnambool City and Moyne Shire councils were "a big mistake".
Talk of council mergers and boundaries changes were raised last week in the wake of the Essential Services Commission allowing Warrnambool to lift its rates above the state government-imposed rate cap.
News that Warrnambool ratepayers would have to pay more while those just down the road in neighbouring shires, where rates are already lower, were spared such a hike, led to calls from some in Bushfield and Woodford to be able to switch to Moyne shire.
Moyne councillor Daniel Meade said any move to change shires would have to be led by the community. "That's the only way it's going to happen, if it ever does happen," he said.
While council amalgamations that merged 279 into 78 municipalities may have happened a quarter of a century ago, Warrnambool council still points to it as a factor in its current financial position.
Amalgamation partly to blame
In its application to the ESC, it said a structural anomaly arising from amalgamation had resulted in a constrained rate base for the range of services it provided the wider region beyond its municipal borders.
New CEO Peter Schneider said that any review or merger was a matter for the Victorian government. However, he said the municipal boundary placed financial limitations on Warrnambool given it provided services to the wider region.
While the commission acknowledged that the council was in the process of reviewing its spending priorities, it said the financial modelling showed that "the sought-after rate increase only served to postpone (by about two year) an ongoing deterioration in council's financial sustainability".
"While we recognise that Warrnambool's application identifies significant challenges, too many questions remain unanswered about how the council proposes, at a minimum, to stabilise its financial sustainability over the medium term.
"It is also clear that the council faces immediate and ongoing funding pressures under any likely future scenario."
Advice from economics group Deloitte, which is included in the commission's report, said it was clear that Warrnambool needed to improve its financial performance. Deloitte said that even with the extra rate revenue, the council still needed to make further improvements such as increasing user charges, reviewing service levels and lifting overall efficiency.
Mr Schneider said the council this year would embark on a review to determine the most effective organisational structure. A separate review will look at operational efficiencies, service levels, cost savings and alternative income sources.
The commission described the rate increase Warrnambool asked for as "very significant" and would have seen rates rise by over 14 per cent over three years.
It allowed council to raise rates for two years instead of the three it had sought, saying it was "inappropriate" to approve the full rate hike above the cap because the council did not provide sufficient evidence of long-term funding needs. "It is not clear to us that the council has done all it can to stabilise its financial position," it said.
Plans for bigger shire shot down
Former Warrnambool mayor and Moyne Shire commissioner David Atkinson said moves to bring Port Fairy, Koroit and Peterborough into one coastal council with Warrnambool were "shot down" early in the merger talks of the early 1990s.
It ended up taking on just part of the old Shire of Warrnambool, something that came as a surprise to some who saw other major centres soak up more of their surrounding municipalities.
Former city mayor Toni McCormack said Shepparton, which was at the time about the same size as Warrnambool, became much bigger after the merger compared to Warrnambool. "Warrnambool's boundaries didn't change very much and that was probably a surprise," she said.
According to Mr Atkinson: "The government definitely got it wrong. No doubt in my mind whatsoever."
He said a merger would be a good idea because most people in Moyne use Warrnambool for their shopping, business and schooling. "Why not just have one municipality and be done with it," he said.
While a wider rate base might bring lower rates, the increase expenditure could mean the numbers could come out much the same, he said. "It's hard to say without doing the figures," he said.
Boundaries were a big mistake
Former Warrnambool mayor Jack Daffy, who was on council when mergers took place, said the boundaries of Warrnambool City Council were not extended far enough and it was time they were reviewed.
"A big mistake was made at the time," Mr Daffy said. "Whilst the shire does contribute in one way or the other, I think they should be contributing much more."
Mr Daffy said Warrnambool council seemed to be forced to provide services that were the responsibility of state government. "More and more the city of Warrnambool seems to be taking on projects that people need, for sure, but it's costing the ratepayers money," he said.
Boundaries never written in stone
Mr Hallam, who oversaw council reforms, said "it was never written in stone" as to where municipal boundaries would be and it was always expected they would change as society changed.
"It's time. In my view it's appropriate to go back and review because the world has changed," he said.
Mr Hallam said changes to local government, of which mergers were just one part, created a lot of controversy and was absolutely unpopular "particularly in the eyes of those whose soap boxes had been knocked over".
He described the changes as "brave" but said they were the right call. "I don't think there are too many people who want to go back to where we were. That's a pretty good indication of how much of the agenda we got right," he said.
Change never going to happen
Vern Robson, who was city manager for Warrnambool council prior to amalgamations, said he didn't think a merger would happen in the short or long term.
He said that over the past 25 years Moyne had been well managed, and the only disappointment from Warrnambool's point of view was that expanded boundaries would have given it an economic base to grow as a regional centre.
Moyne CEO Bill Millard said a merger was not on the radar.
Council takes knife to costs
In a bid to find a path to financial stability, Warrnambool City Council has already begun to make cutbacks to services and staff.
The Essential Services Commission report has shone a light on just where those cuts have been made in recent years.
Since 2017, council has made about 40 changes which saved more than $1.5 million, the report says.
Removing asbestos from ageing buildings and replacing light poles at sports grounds are listed as some of the works that have been stopped or deferred, it says.
Other cost-saving measures undertaken include saving: $170,000 a year on cleaning, $13,000 on better mobile phone plans, $80,000 on reducing staff at AquaZone and $64,000 by reducing the level of customer service.
Warrnambool is also working with neighbouring councils to deliver services such as road maintenance, information technology and looking to share corporate services. The report also reveals that council sold several parcels of land in recent years, but now has limited surplus land.
The $860,000 annual cost of running Flagstaff Hill was listed as a factor in the need to apply for a rate rise above the State Government-imposed cap.
While car parking revenue had increased from $1.2 million to over $1.4 million in four years, income from children's services, child-care and saleyards had dropped due to competition.
About 51 per cent of the council's $79.6 million budget for 2019-20 will come from rate revenue and 19 per cent from user fees. The rest comes from grants and other income. The rate increase will bring in an extra $3.4 million for asset renewal.
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