Agenda of Demerger Transition Committee Meeting

MINUTES OF Cootamundra-Gundagai Regional Council
Demerger Transition Committee Meeting
HELD AT THE Alby Schultz meeting Centre, Cootamundra
ON Tuesday, 11 August 2026 AT 4:01pm

PRESENT: Cr Rosalind Wight (Deputy Mayor and Chair), Cr Abb McAlister (Mayor) (online), Cr David Graham, Cr Penny Nicholson, Cr Gil Kelly, Cr Ethan Ryan

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

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

2.1 Apologies

Apology

Committee Resolution

Moved: Cr David Graham

Seconded: Cr Gil Kelly

That the apology received from Cr Cooper be noted.

Carried

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 14 July 2026

Committee Resolution

Moved: Cr Gil Kelly

Seconded: Cr Ethan Ryan

That the Minutes of the Demerger Transition Committee Meeting held on Tuesday 14 July 2026 be confirmed as a true and correct record of the meeting.

Carried

5 Reports

5.1 General Manager Office

5.1.1 GM-Designate Recruitment - Request for Quotation

Committee Resolution

Moved: Cr Gil Kelly

Seconded: Cr David Graham

That the Committee:

1. Endorses the General Manager-Designate Recruitment - Request for Quotation documents attached to this report.

2. Authorises the immediate public release of the Request for Quotation consistent with Council’s Procurement Policy.

3. Recommends to Council that the recruitment committees be renamed as recruitment ‘panels’.

Carried

5.1.2 Confirmation of Successor Councils' Governance Arrangements

Committee Resolution

Moved: Cr Ethan Ryan

Seconded: Cr Gil Kelly

1. The Committee recommends that Council confirm the following preferences for the governance arrangements for the successor councils:

(a) That the boundaries of the proposed Cootamundra and Gundagai Shire Councils be the same as existed immediately prior to the 2016 merger.

(b) That both Cootamundra and Gundagai Shire Councils be undivided - that is, neither council will have wards.

(c) That Cootamundra Shire Council have seven councillors.

(d) That Gundagai Shire Council have five councillors.

(e) That for both successor councils the Mayor be elected in accordance with the Local Government Act 1993 section 227(a), namely elected by the councillors from among their number.

2. The Committee recommends that Council request that the first election of councillors be conducted at the same time as the next local government general elections, currently scheduled for September 2028.

3. The committee recommends that Council request that, for the period from commencement on 1 July 2027 until the first councillor election, the Proclamation specify:

(a) that the governing bodies be

(i) For Cootamundra Shire Council, those Councillors holding office at 30 June 2027, and not suspended from office, whose primary residence is within the proclaimed boundary for the Cootamundra Shire local government area.

(ii) For Gundagai Shire Council, those Councillors holding office at 30 June 2027, and not suspended from office, whose primary residence is within the proclaimed boundary for the Gundagai Shire local government area.

(b) That each governing body established under part (a) above is authorised to:

(i) Elect a Chief Administrator to chair meetings and perform the roles of the Mayor as described in the Local Government Act 1993 section 226.

(ii) Determine the remuneration of Chief Administrator and Administrators in the same manner as councils determine the remuneration for the Mayor and other councillors.

Carried

The Meeting closed at 4:29pm.


CHAIRPERSON	INTERIM GENERAL MANAGER

Demerger Transition Committee Meeting Agenda

15 September 2026

5.1 General Manager Office

5.1.1 Report from GM-Designate Recruitment Panels

DOCUMENT NUMBER

481625

REPORTING OFFICER

Peter Bascomb, Demerger Transition Manager

AUTHORISING OFFICER

Peter Bascomb, Demerger Transition 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

That the Committee note the report and endorse the appointment of LG Services Group Pty Ltd (ABN 606 6178 8389) by both Recruitment Panels.

Introduction

Both the Cootamundra GM-Designate Recruitment Panel and the Gundagai GM-Designate Recruitment Panel (CGMRP and GGMRP respectively) held their inaugural meetings on Tuesday 8 September 2026. This report provides a summary of the Panels’ determinations.

Discussion

The agenda for both Panels was identical an included only two items.

Election of Chair

The Council resolution that established the Panels authorised each Panel to elect its own Chair.

As they were the inaugural meetings, Council’s Demerger Transition Manager (DTM), as the delegate of the Interim General Manager, opened each meeting and called for nominations.

Cr Abb McAlister was elected as the Chair of the Gundagai GM-Designate Recruitment Panel.

Cr Ethan Ryan was elected as the Chair of the Cootamundra GM-Designate Recruitment Panel.

Appointment of Recruitment Consultant

The Council resolution that established the Panels authorised each Panel to appoint a consultant to assist with the recruitment of the GM-Designate.

The request for quotation was published on VendorPanel on 12 August 2026 and closed at 12Noon on Monday 31 August 2026. VendorPanel notified over 100 pre-qualified consultants. Council received 14 responses before the advertised closing time and 2 after the RfQ closed.

It was possible for both Panels to select different consultants, in the end both Panels selected LG Services Group Pty Ltd (LGSG).

Both LGSG and the unsuccessful consultants were advised of the Panels’ decisions on Wednesday 9 September 2026.

Financial

The cost of recruiting the GMs-Designate, and their subsequent remuneration, will be funded through Council’s allocated demerger budget.

OLG 23a Guideline consideration

N/a

Demerger Transition Committee Meeting Agenda

15 September 2026

5.1.2 Allocation of Council Cash Reserves between the Successor Councils

DOCUMENT NUMBER

481644

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

1. MLA Cash Allocation Report ⇩

Recommendation

The Committee recommends that Council:

1. Allocate its 2026-2027 financial year cash reserves opening balances based on Morrison Low Advisory cash analysis allocation, namely:

2. Fund the current $6,153,964 externally restricted cash shortfall by a pro-rata reduction in Council’s internally restricted cash reserves except for Employee Leave Entitlements and Advanced Financial Assistance Grants.

3. Distribute Council’s unallocated funds to the proposed successor Councils based proportion of general rates raised in FY27 from each successor council area.

4. Acknowledge that the figures used in Part (a) and Part (b) may vary following completion of the current audit of Council’s financial statements.

Introduction

This report presents the outcome of the project to identify the appropriate split of Council’s cash reserves across the two councils.

Discussion

Council’s Resolution 099/2026 from its April 2026 meeting included the following:

2.6. That Council:

2.6.1. Approves the methodology for allocating Council’s reserves detailed in the report for item 5.1.3 in the Demerger Transition Committee Business Paper for its 15 April 2026 meeting.

2.6.2. 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.

2.6.3. Consistent with Council’s adopted Restricted Assets Policy, establishes 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.

2.6.4. Acknowledges that the reserve established in part 2.6.3 above will further reduce the cash available for Council’s internally restricted reserves.

2.6.5. Acknowledges 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.

2.6.6. Acknowledges 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.

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

Morrison Low Advisory (MLA) was subsequently appointed to undertake most of the work while Vanguard Consulting were to review the allocation of unexpended grants as part of their work completing Council’s FY26 Annual Statements. MLAs final report is attached.

The adopted methodology for each reserve is outlined in the following table.

Table 1: Adopted Split Methodologies

	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

Unfortunately, the work undertaken by MLA has not gone as smoothy as anticipated. As identified in their report MLA encountered difficulty in accessing historical data and identifying the rationale for several reserve movements. Prior to mid-2018 Council maintained the financial systems of the two predecessor councils. Unfortunately, Council has not been able to access the FY17 financial information from the archive of the former Gundagai system which is no longer supported by the system’s vendor. A contractor has been retained to attempt to gain access at a database level but without success to date.

While the lack of complete data is unfortunate, MLA have been able to deduce the data for Gundagai. For example the total water access charge collected by Council is known as is the amount collected from the former Cootamundra Shire area, meaning that the amount collected from the Gundagai area can calculated as the difference between the two. Further, the expenditure on Gundagai water is known is for the subsequent 9 financial years (FY18 – FY26 inclusive). An average of those years was used as an estimate for the FY17 year. While this is not ideal, it is assessed that any variation is unlikely to be material in consideration of Council’s overall financial position.

MLA also uncovered multiple changes in policies and accounting practices which complicated the allocation of transactions. There were also multiple instances of reserve movements for which no documentation existed. One example is the closing balance contained in the audited financial statements for the Sewerage Service Reserve on 30 June 2021 of $6,514,000 which differs by $920,000 from the opening balance contained in the audited financial statements on 1 July 2021 of $5,594,000. Documentation supporting this discrepancy has not been located.

Another example is the two waste management reserves. MLA’s examination revealed that Council’s waste finances have not been well managed with income and expenditure not been accurately recorded, with no expenditure in some years. For a more complete explanation of the issue and the approach adopted by MLA to resolve it please see the relevant section in the MLA report.

MLA’s report outlines these difficulties and the rationale for the various ways they allowed for them. Notwithstanding the difficulties encountered, Table 2 gives MLA’s recommended distribution of Council’s cash reserves.

Table 2: MLA's recommended distribution

The implication of MLAs distribution is that Council’s externally restricted reserves are not fully cash backed as legislatively required. This cash shortfall of $6,153,964 further implies that some cash has been used for purposes other than for which it was raised and/or Council’s fees and charges have been too high given the level of expenditure.

If Council were to adopt the MLA distribution it would need to transfer $6,153,964 from the general fund to the externally restricted reserves. Council does not have that level of unrestricted cash available.

Given this lack of cash Council has two options, neither of which impact Council’s unrestricted cash balance.

1. Use the MLA balances

This is the intent of part 2.6 of Council’s resolution 099/2026. Council could “find” the cash to fully fund the shortfall in externally restricted cash in two ways.

The first is the method envisaged by part 2.6.6 of resolution 2026/99, namely reduce the internally restricted reserves by the shortfall in external restrictions. It is recommended that Employee Leave Entitlement and Advanced Financial Assistance Grants reserves remain untouched.

The second is to leave the internally restricted reserves and accept a significant negative unrestricted cash balance. This is not recommended as it creates the illusion that there is in fact cash available to fund, say, a full plant replacement program.

2. An alternative methodology

It can be argued that Council’s reserve balances have been subject to audit by the NSW Auditor General since 2017 and therefore it is unnecessary, even inappropriate, to significantly change the balances based on adjustments to previous years. If this argument is accepted, then Council could accept the final audited FY26 balances and split the balances between the balances between the two successor councils.

If Council accepts this path, it is recommended that Council allocate the balances between the two successor Councils in the same proportion as the balances recommended by MLA.

The reserve balances as submitted for audit with the FY26 financial statements are as follows, noting that this table includes the unexpended grants which were not investigated by MLA. These balances may vary during the finalisation of the audit.

Table 3: Reserve balances submitted for audit

Using these balances the recommended distribution is as follows, noting that the percentage split is the critical figure as the actual reserve balance in the final audited statements may vary from those submitted for audit.

Table 4: Recommended Distribution pending finalisation of audit

There are two primary advantages to using this approach:

1. Council’s internally restricted reserves are not impacted, meaning Council’s current expenditure plans can remain intact.

2. Given that the method relies on FY26 audited balances and not implicitly altering past financial year data it is unlikely that Council will be required to restate past financial years.

Financial

The cost of the work undertaken by Morrison Low Advisory has been funded from Council’s allocated demerger budget.

A council’s externally restricted reserves must be fully cash backed. Council cannot afford to fully fund the externally restricted reserve balances identified by MLA.

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 11 August 2026