Agenda of Demerger Transition Committee Meeting

Demerger Transition Committee Meeting Minutes

10 March 2026

MINUTES OF Cootamundra-Gundagai Regional Council
Demerger Transition Committee Meeting
HELD AT THE Council Chambers, Gundagai
ON Tuesday, 10 March 2026 AT 4:02PM

PRESENT: Cr Abb McAlister (Mayor), Cr Rosalind Wight (Deputy Mayor), Cr Penny Nicholson, Cr Ethan Ryan, Cr Gil Kelly

IN ATTENDANCE: Peter Bascomb (Demerger Transition Manager), Roger Bailey (Interim General Manager)

1 Acknowledgement of Country

The Chairperson acknowledged the Wiradjuri people who are the Traditional Custodians of the Land at which the meeting was held and paid his respects to Elders, both past and present, of the Wiradjuri Nation and extended that respect to other Aboriginal people who were present.

2 Apologies, Leave of Absence, and AUDIO-VISUAL attendance requests

2.1 Apologies

That the apology received from Cr Graham be accepted.

2.2 Leave of Absence

Nil

2.3 Audio-visual attendance requests

Nil

3 Disclosures of Interest

Nil

4 Confirmation of Minutes

4.1 Minutes of the Demerger Transition Committee Meeting held on Tuesday 24 February 2026

Committee Resolution

Moved: Cr Gil Kelly

Seconded: Cr Penny Nicholson

That the Minutes of the Demerger Transition Committee Meeting held on Tuesday 24 February 2026 be confirmed as a true and correct record of the meeting.

Carried

5 General Manager’s Report

5.1 General Manager Office

5.1.1 Modification to the Committee's Meeting Schedule

Committee Resolution

Moved: Cr Penny Nicholson

Seconded: Cr Ethan Ryan

That the Committee modify its meeting schedule as follows:

1. The May meeting be held on Tuesday 5 May 2026 rather than the scheduled 12 May

2. The June meeting be held on Tuesday 16 June 2026 rather than the scheduled 9 June.

Carried

5.1.2 Financial Sustainability Plan

Committee Resolution

Moved: Cr Gil Kelly

Seconded: Cr Penny Nicholson

That the Committee

1. Endorses the Request for Tender documentation attached to this report, including the Scope of Works and Tender Evaluation Procedure, for an updated Financial Sustainability Plan plus a Long-Term Financial Plan and Revenue Policy for each of the proposed successor councils

2. Recommends that Council delegates to the Committee the authority to appoint the preferred consultant.

Carried

5.2 Engineering Gundagai

5.2.1 Lime Spreader Business Case

Committee Resolution

Moved: Cr Gil Kelly

Seconded: Cr Ethan Ryan

The Committee recommends that Council:

1. Note the report.

2. Source a second-hand lime spreader up to a value of $175,000 (ex GST) and report to Council for consideration, prior to purchase.

3. Explore entering into a MOU with the neighbouring Council’s to utilise Council’s stabiliser at an agreed rate that ensures a commercial arrangement for the benefit of the parties.

4. Explore a ‘shared service’ arrangement for the use of plant between the two future ‘new councils’.

Carried

SUPPLEMENTARY Motion

Committee Resolution

Moved: Cr Gil Kelly

Seconded: Cr Penny Nicholson

The Committee recommends that the Interim General Manager identifies and implements savings across the board, and reports savings achieved to the Council.

Carried

The Meeting closed at 4:41pm.


CHAIRPERSON	GENERAL MANAGER

Demerger Transition Committee Meeting Agenda

15 April 2026

5.1 General Manager Office

5.1.1 Selection of Dispute Resolution Panel Chair and Members

DOCUMENT NUMBER

463992

REPORTING OFFICER

Peter Bascomb, Demerger Transition Manager

AUTHORISING OFFICER

Roger Bailey, Interim General Manager

RELEVANCE TO COMMUNITY STRATEGIC PLAN

4. Collaborative and progressive leadership

4.2 Proactive, practical Council leaders who are aligned with community needs and values

FINANCIAL IMPLICATIONS

There are no additional financial implications associated with this report.

LEGISLATIVE IMPLICATIONS

There are no Legislative implications associated with this report.

POLICY IMPLICATIONS

There are no Policy implications associated with this report.

ATTACHMENTS

1. DTDRP Expression of Interest ⇩

2. Candidate A - Confidential

3. Candidate B - Confidential

4. Candidate C - Confidential

5. Candidate D - Confidential

6. Candidate E - Confidential

7. Candidate F - Confidential

8. Candidate G - Confidential

9. Candidate H - Confidential

10. Candidate I - Confidential

11. Candidate J - Confidential

Recommendation

The Committee recommends that Council endorses the following nominations for the Demerger Disputes Resolution Panel:

1. Candidate ____ as Chair

2. Candidate ___ and Candidate ___ as members.

Introduction

This report presents the Expressions of Interest received to enable the Committee to recommend to Council its preferred Chair and Members of the Demerger Transition Dispute Resolution Panel.

Discussion

The Committee, at its January meeting, recommended the establishment of a Demerger Transition Disputes Resolution Panel (DTDRP). This recommendation was adopted by Council at its February meeting.

At its February meeting the committee endorsed the Expression of Interest (EoI) documentation for the DTDRP (attached). The EoI was subsequently advertised with an initial closing date of 26 March 2026 but due to a delay in loading the complete EoI documentation on Council’s website the closing date was extended to 7 April 2026.

The Office of Local Government advises that the applicants are considered not personnel and consequently it is not possible to close the meeting to consider the applications. It is therefore suggested that during the meeting candidates be referred to as “Candidate A” et cetera. The candidate’s expressions of interest are included as confidential attachments, but will ultimately have to made publicly available, appropriately redacted, under section 11 of the Local Government Act 1993.

The following EOIs have been received (in order of receipt):

Candidate	Date Received	Eligible*	Comment
A	11 March 2026	Yes
B	11 March 2026	Yes
C	18 March 2026	Yes
D	19 March 2025	Yes
E	20 March 2023	Yes
F	25 March 2026	Yes
G	31 March 2026	Yes
H	1 April 2026	Yes
I	1 April 2026	Yes
J	6 April 2026	Yes

1: Note: *Eligible means that the candidate has been assessed as meeting the independence criteria. The comment column is provided to allow committee members to make comments against each candidate.

Financial

Costs associated with the panel would be funded from Council’s allocated demerger budget.

OLG 23a Guideline consideration

N/a

Demerger Transition Committee Meeting Agenda

15 April 2026

5.1.2 Appointment of General Managers Designate

DOCUMENT NUMBER

463680

REPORTING OFFICER

Peter Bascomb, Demerger Transition Manager

AUTHORISING OFFICER

Roger Bailey, Interim General Manager

RELEVANCE TO COMMUNITY STRATEGIC PLAN

4. Collaborative and progressive leadership

4.4 Recognised as a premier local government Council that represents and advocates for community needs

FINANCIAL IMPLICATIONS

There are no additional financial implications associated with this report.

LEGISLATIVE IMPLICATIONS

There are no Legislative implications associated with this report.

POLICY IMPLICATIONS

There are no Policy implications associated with this report.

ATTACHMENTS

Nil

Recommendation

1. The Committee recommends that Council:

a. Establish the positions of:

i. General Manager Designate Cootamundra

ii. General Manager Designate Gundagai

b. Seek to employ both GMs-Designate by 30 April 2027 at the latest, initially as an award-based employee with remuneration package equivalent to that of the relevant GM position.

c. Seek to have the Proclamation refer to the appointment of the GMs-Designate as the Interim General Manager of the Council for which they were recruited.

d. Determine that the GMs-Designate’s role will include:

i. Review the draft structure of the organisation for which they are recruited.

ii. Recruit as many vacant positions as possible by 1 July 2027.

iii. Working with the other GM-Designate and the Interim General Manager, ensure that all new staff a properly inducted and trained.

iv. Progress the Demerger Transition Project to ensure that both successor Councils are fully operational on 1 July 2027.

v. Working with the other GM-Designate and the Interim General Manager, finalise the draft IP&R and other plans and policies for the Council for which they are recruited.

vi. Assist the CGRC Interim GM as required to ensure the continued operation of CGRC and the smooth transition to the new organisations.

2. The Committee recommends that Council, to facilitate the recruitment of the two GMs-Designate:

a. Establish two Committees of Council, being:

i. GM Cootamundra Recruitment Committee, comprising Councillors Wight, Kelly, Ryan, Collins, Cooper and Syed.

ii. GM Gundagai Recruitment Committee, comprising Councillors McAllister, Graham and Nicholson.

b. Require the Committees to follow the Guidelines for the Appointment and Oversight of General Managers issued under Section 23a of the Local Government Act 1993

c. Authorise each Committee to:

i. Elect the Committee Chair.

ii. Appoint a recruitment agency to assist with the recruitment process for each successor Council.

iii. Select the preferred candidate for each successor Council for referral to Council for formal appointment.

Introduction

Having the General Managers Designate employed well ahead of the commencement of the two successor Councils is essential to ensure that the final stages of the demerger planning is completed and staff are employed ready for 1 July 2027.

Discussion

Both the Demerger Transition Plan and the Financial Sustainability Plan allow for the recruitment of GMs and other staff prior to the commencement of the successor Councils.

Consultation with a currently active recruitment consultant suggests that the recruitment process should commence early 2027 to ensure that the preferred candidates commence employment by 30 April 2027. This is because it typically takes 6 – 8 weeks for the successful candidate to complete their notice period and, if having to relocate, to prepare for the move.

This suggests that the timetable for the recruitment could be:

Date	Activity
11 August 2026	DTC endorses recruitment consultant RfQ documentation for distribution
8 September 2026	Recruitment committees separately choose their preferred recruitment consultant (may be different)
13 October 2026	Recruitment committees meet with their preferred recruitment consultant (in person meeting) to begin preparation of the recruitment collateral. If the two committees share the recruitment consultant, then this could be a joint meeting.
October 2026 – December 2026	Recruitment consultant(s) liaises offline with recruitment committee to complete collateral. It will be the responsibility of each Committee Chair to ensure the consultant(s) receive timely feedback.
Week beginning 4 January 2027	Consultant(s) place advertisements for GMs-Designate
January-March 2027	Recruitment processes continue, culminating in short lists to be interviewed by the recruitment Committees
9 March 2027	Recruitment Committees conduct final interviews and selection of preferred candidates.
23 March 2027	Council formally confirms the GMs-Designate. To give the appointees security they would receive two letters of offer. One would be as GM Designate until 30 June 2027 and the other would be as GM from 1 July 2027.
March – April 2027	Advertise vacant positions to ensure that the GMs-Designate can interview, appoint and new staff commence in time to be inducted and trained prior to 1 June 2027.
No later than 30 April 2027	Appointed GMs-Designate commence.

This timetable provides no allowance for slippage in the process. The Committee may wish to consider commencing the process a month earlier, resulting in the recruitment advertising commencing early December.

Current advice is that with the advent of social media advertising and potential candidates typically always online, the impact of the Christmas / New Year period on recruitment is far less than it’s traditionally been.

The risk of commencing the recruitment process earlier is that, if everything goes smoothly, then the appointees may commence earlier – say late March earlier April – increasing the cost to the demerger budget.

An additional benefit of completing the recruitment of the GMs-Designate earlier is that they would have more time to recruit, induct and train new staff.

It is expected that the Proclamation would name the appointees as Interim General Manager of the relevant council, and that the new councils would meet on 1 July 2027 to, inter alia, confirm the appointment of its GM and authorise the signing of the standard GM contract.

As this is not a standard process, the Office of Local Government was asked, via 18 March email, to review the process. At the time of writing, the OLG had not responded.

Financial

The cost of employing additional staff for the successor Councils is included in the cost estimate for the transition project and therefore included in Council’s adopted budget.

OLG 23a Guideline consideration

N/a

Demerger Transition Committee Meeting Agenda

15 April 2026

5.1.3 Process to Split Reserves

DOCUMENT NUMBER

460270

REPORTING OFFICER

Peter Bascomb, Demerger Transition Manager

AUTHORISING OFFICER

Roger Bailey, Interim General Manager

RELEVANCE TO COMMUNITY STRATEGIC PLAN

4. Collaborative and progressive leadership

4.2 Proactive, practical Council leaders who are aligned with community needs and values

FINANCIAL IMPLICATIONS

There are no financial implications associated with this report.

LEGISLATIVE IMPLICATIONS

There are no Legislative implications associated with this report.

POLICY IMPLICATIONS

There are no Policy implications associated with this report.

ATTACHMENTS

1. Restricted Assets Policy ⇩

Recommendation

The Committee recommends that Council:

1. Approves the methodology for allocating Council’s reserves detailed in this report.

2. Authorises the engagement of a contractor, selected by the Interim General Manager and the Demerger Transition Manager, to undertake the work of splitting the reserves according to the approved methodology so that the successor council reserves can be provided to the consultant engaged to prepare the updated Financial Sustainability Plan.

3. Consistent with Council’s adopted Restricted Assets Policy, establish a reserve to retain the Financial Assistance Grants (FAGs) paid in advance with the reserve plus interest to carry forward to the actual year for which the FAGs were paid.

4. Acknowledge that the reserve established in part (c) above will further reduce the cash available for Council’s internally restricted reserves.

5. Acknowledge that it is possible that the division of an Externally Restricted Reserves may result in one of the proposed successor Councils having a negative balance requiring that Council to borrow to repay the other successor Council.

6. Acknowledge that Council’s Internally Restricted Reserves are not fully cash backed and require the balances of all such reserves to be reduced on a pro rata basis to the reserves are fully cash backed.

7. Require that the organisation record all future reserve transactions so that the successor council reserve balances are accurately known on 30 June 2027.

Introduction

As part of the demerger Council will need to divide its available cash between the new Councils. This report proposes a set of principles on which that division can be made. The forecast opening balances of all reserves will impact the long-term financial plan for each of the successor councils.

Discussion

There are number of ways that Council’s cash reserves which might be applicable to different reserves.

Simple Proportional Split

The simplest, and therefore the quickest and cheapest, method is to allocate the reserves of the two successor councils based on relative proportion held by the two predecessor councils at the time the reserves were merged, which from an operational level was 2018.

The downside of doing this is it assumes that the movements in the reserve have occurred in approximately the same proportion as the starting position in 2018. By way of example, if the Cootamundra to Gundagai ratio was 2 to 1 when the reserves were merged, then this method assumes that the movement in and out of the reserve for the two successor council areas was in the same 2 to 1 proportion.

Where movements are small, this may be a suitable assumption, but for large movements – such as a new treatment plant or landfill – this methodology may advantage one area over the other. It is not recommended.

Transaction Trace

This method starts with the closing balances of the predecessor councils at the time a reserve was merged, then forensically reviews each subsequent transaction to allocate it to one of the successor councils.

It becomes quite specific when, for example, there was movement into the reserve from a harmonised fee, charge or rate. Such a movement would be allocated to the successor council based on the proportion of the fee, charge or rate raised in each successor Council area.

This method will provide the Committee with confidence that the opening balances for the successor Councils will be both fair and as accurate as can be possibly achieved.

There is potential for one of the successor councils to have a negative balance in an externally restricted reserve if the expenditure for that council was substantially greater than cash available from that council area. This in effect means that one successor council area was subsidised by the other. Funds cannot be moved from one restricted reserve to another. The General Fund also cannot be used to cover a shortfall in an Externally Restricted Reserve. To ensure equity, the successor council with the negative balance will need to borrow to repay the other successor council.

The transaction trace approach to reserve division will require the engagement of a contractor with significant ability to extract and manipulate data from Council’s Civica Altitude ERP and preferably with experience with Council’s data.

If this method is adopted it is suggested that the successor council balances be calculated as at 30 June 2026 allowing for the reserves to be demerged and all future reserve transactions allocated to the relevant successor council. This process will allow the opening balances of each successor council reserve to be available 1 July 2027 (subject to audit as usual), as well as providing a more solid basis for the development of the long-term financial plan for each successor Council.

A transaction trace is the preferred methodology for most reserves.

Grants

Most grants are project based and can be split based on the location of each project based on a project’s unspent funds.

Plant

Plant is a little more complicated. The plant reserve should represent the funds accumulated to replace each item of plant. A new item of plant would have relatively little funding allocated for its replacement while an item due for replacement this financial year should have the bulk of its net replacement cost funded.

Given this, it is recommended that the plant reserve be divided up based on each successor council’s difference between a plant item’s net replacement cost minus its written down value. To clarify, the following hypothetical example illustrates the calculation:

· Estimated replacement cost: $250,000

· Estimated trade in value: $50,000

· Net replacement cost: $250,000 - $50,000 = $200,000.

· Written Down Value (from asset register): $30,000

· Nominal plant reserve funding: $200,000 - $30,000 = $170,000.

The Plant Reserve would be divided on a pro rata basis using each successor council’s total nominal plant reserve funding.

Reserves Not Cash Backed

As noted in each monthly Restricted Cash Reconciliation report, Council does not have sufficient cash cover all its internally restricted reserves. This needs to be resolved and it is recommended that each internally restricted reserve be reduced by the percentage shortfall in cash.

The March restricted Cash Reconciliation report showed that there was a shortfall of $784,138 cash shortfall from the internally restricted reserves total of $7,801,666. This represents a 10.1% cash shortfall. It is recommended that this calculation be repeated based on the cash reconciliation as at 30 June 2026 and that the current internally restricted reserves be reduced by the resultant percentage.

General Purpose Grants Paid in Advance

Council currently does not restrict that component of financial assistance grants (FAGs) paid in advance. This is poor practice based on an unsound assumption that the Commonwealth will continue to pre-pay FAGs at a consistent amount. Council’s Restricted Asset Policy does provide for such a reserve, although since that policy was adopted Council resolved not to “restrict” any FAG pre-payment.

It is recommended that Council establish a reserve to restrict pre-paid FAGs and the funding be distributed between the successor councils based on:

· General purpose component: based on estimated resident population of each successor councils

· Roads component: based on the total transport assets for each successor council

The creation of this reserve would further decrease the cash available to cover the internally restricted reserves. Failure to create the reserve risks leaving the successor Councils with a funding shortfall in their first-year of operation if the Commonwealth ceases, or modifies, its approach to prepayments.

The FAG reserve would not be subject to a decrease as a consequence of adjustments made to balance available cash with internally restricted reserves.

The recommended method for each current reserve is summarised in the following table.

	Reserve	Recommended Method	Comment
Externally Restricted	Domestic Waste	Transaction Trace
	Water Supply	Transaction Trace
	Sewerage Service	Transaction Trace
	Stormwater Infrastructure Renewal	Transaction Trace
	Developer Contributions General	Transaction Trace
	Developer Contributions – Sewer	Transaction Trace
	General Funds Unspent Grants & Contributions (incl. Starry Nights)	Project Based
	RERRF, SCF Rd1,	Project Based	SCF to be finalised this FY
	OLG Flood Unspent Grants	Project Based	Expected to be fully acquitted by 30 June 2026
Internally Restricted	Aerodrome Bitumen Resurfacing	Cootamundra
	Bradman’s Birthplace	Cootamundra
	Cootamundra Caravan Park	Cootamundra
	Heritage Centre	Cootamundra
	Development – Land & Buildings	Transaction Trace
	Employee Leave Entitlement	Based on staffing
	Quarries & Pit Restoration	Transaction Trace
	Plant Replacement	Special case	Proportional split based on difference between WDV and replacement cost.
	Cemetery	Transaction Trace
	Southern Phone	Cootamundra
	Waste Management	Transaction Trace
	Dog on Tuckerbox Land	Gundagai
New	Pre-Paid Financial Assistance Grants	Special case	Based on population or transport assets as appropriate

Financial

The cost of the external contractor has not been estimated and will be dependent on the number transactions that will need to be reviewed.

The expenditure will be funded from Council’s allocated demerger budget.

OLG 23a Guideline consideration

N/a

REPORTING OFFICER	Teresa Breslin, Executive Assistant to Mayor and General Manager
AUTHORISING OFFICER	Roger Bailey, Interim General Manager
FINANCIAL IMPLICATIONS	There are no Financial implications associated with this report.
LEGISLATIVE IMPLICATIONS	There are no Legislative implications associated with this report.
POLICY IMPLICATIONS	There are no Policy implications associated with this report.
ATTACHMENTS	1. Minutes of the Demerger Transition Committee Meeting held on Tuesday 10 March 2026