This week it was branded 'not fit' by the Independent Pricing and Regulatory Tribunal (IPART) against 'Fit for the Future' criteria set by the NSW government last year.

The 'not fit' title is not exclusive to Greater Taree City Council, with neighbouring councils, Gloucester Shire and Kempsey Shire also failing to meet the criteria. Great Lakes Council and Port Macquarie-Hastings were deemed 'fit' by IPART.

IPART made the assessment of Greater Taree City Council based on information provided by council, long-term financial reports and other available data, according to IPART chairman Dr Peter Boxall.

Two options are on the table: for Greater Taree City Council to merge with Gloucester or become a council in a Mid North Coast joint organisation. They are two options available to council as recommended by the Independent Local Government Review Panel in 2013 - it is important to note that IPART did not make any merger recommendations.

However, Greater Taree City Council may be working on a third option following its decision at a meeting of council on Wednesday to consult with the community about a Special Rate Variation (SRV) to secure millions more from ratepayers to help it to manage its infrastructure maintenance requirements. News of the 'not fit' title did not surprise the Greater Taree City Council senior leadership team or councillors and according to mayor Paul Hogan "we fail because of our disproportionate road infrastructure."

"None of this is news to us and it merely reflects a 2012 report by NSW Treasury Corporation for the NSW government," Cr Hogan said.

According to Cr Hogan, the 'Fit for the Future' process has resulted in almost all metropolitan councils being deemed unfit as they did not meet the scale and capacity test.

"In regional NSW, councils like Greater Taree were deemed unfit as we cannot meet our financial benchmarks although we do have scale and capacity," he explained.

"The Premier stated at the NSW Local Government Conference last week that councils need to be responsible for their own future. Neither the Premier nor the Minister (for Local Government) are referring to new funding structures in their view of the future."

This week State member for Myall Lakes, Stephen Bromhead urged council to "hold discussions with neighbouring councils and the NSW Government, so they can deliver better value for money for ratepayers across the region now and into the future."

Mr Bromhead said the NSW Government had made a three-point guarantee to give regional communities extra confidence that reforms would deliver tangible benefits and stronger councils.

He said council mergers would reduce waste and red tape and explained that all the savings would go to better services, more infrastructure, lower rates and that local representation would be maintained.

However, in June this year Mr Bromhead told The Manning River Times: "Gloucester and Great Lakes councils talked with each other and said, 'let's have a look at it' and hired a consultant that was approved by the local government department to look at it, and that report has come out saying, don't amalgamate."

He also rejected the idea that Greater Taree and Gloucester Shire councils may be forced to amalgamate.

"What's the point of amalgamating one bankrupt council with another one. That won't answer it.

"That doesn't make them Fit for the Future - it just makes them both unfitter for the future," Mr Bromhead said.

The 'Fit for the Future' local government reform process has been on council's radar for more than a year. In its submission to IPART, council highlighted the necessity for increased rates if the NSW Government's benchmarks are to be achieved and indicated how it would improve between now and 2020 against all benchmarks. However its improvement was dependent on a significant rate increase, such as the proposed SRV that is now up for community consultation.

Earlier this year council's general manager, Ron Posselt spoke to his concerns about the NSW Government's 'Fit for the Future' process.

"It provides no changes to any funding models for regional and rural councils and largely ignores the key issue of infrastructure maintenance and renewal. Ratepayers in Greater Taree have a huge infrastructure burden of 1700km of local road and 200 local bridges," Mr Posselt said.

"The Fit for the Future process asks councils to cash fund depreciation, fully-fund road, bridge and stormwater maintenance and operate with more than 60 per cent of own source revenue. This approach requires ratepayers to fund their infrastructure.

"We strongly believe regional and rural communities deserve assistance from the federal and State governments and are asking that Federal Financial Assistance Grants be allocated on an infrastructure basis and not a per capita basis.

"Seventy per cent of Financial Assistance Grants are allocated on a per capita basis. That means financial assistance is provided to councils with bigger populations yet the bigger a council's population, the more rates income they have and they are already able to cover their own costs."

Greater Taree City Council now has a 30-day consultation opportunity to respond to the IPART findings.

ainslee.dennis@fairfaxmedia.com.au