Introduction
It seems that almost every newspaper in WA this year has run a story on possible forced amalgamations of local governments, a hot political potato – it ignites local governments and members of the public alike.
Much of the coverage however has focused on the issues of sustainability – we are going to avoid those today and look from a purely legal view at what avenues are available for a state government to force two or more local governments to amalgamate.
Now before we descend into the Local Government Act 1995 I do want to make one thing clear. As many of you will be aware I was the Principal Policy Advisor for a number of local government Ministers – what I am about to detail today is not a hidden master plan that this state government or the previous state government was waiting to spring on the unsuspecting local government sector. It is purely an analysis that Kott Gunning has produced to assist our local government clients understand from what direction a threat may appear from.
The amalgamation provisions in the Local Government Act
The Local Government Advisory Board plays a very important role in forced amalgamations of local government districts therefore we will quickly look at how this board is appointed. Schedule 2.5 of the Local Government Act 1995 sets this out.
“Schedule 2.5
Membership of Advisory Board
The Advisory Board consists of 5 members appointed by the Governor of whom —
(a) one person is nominated by the Minister;
(b) 2 persons are to be persons having experience as a member of a council appointed from a list submitted to the Minister by WALGA under clause 4(1);
(c) one person is to be a person having experience as the chief executive officer of a local government appointed from a list submitted to the Minister by the Local Government Managers AustraliaWA Division under clause 4(2); and
(d) one person is to be an officer of the Department nominated by the Minister”
The primary function of the Local Government Advisory Board is to consider proposals for:
- creating new local government districts;
- changing the boundaries of a local government district;
- abolishing a district ( that is amalgamation); or
- a combination of any of the above.
These proposal types are contained in section 2.1 of the Local Government Act 1995.
The next consideration is who can make a proposal.
This is detailed in Schedule 2.1 of the Local Government Act 1995, clause 2
“2. Making a proposal
(1) A proposal may be made to the Advisory Board by —
(a) the Minister;
(b) an affected local government;
(c) 2 or more affected local governments, jointly; or
(d) affected electors who —
- (i) are at least 250 in number; or
- (ii) are at least 10% of the total number of affected electors.
(2) A proposal is to —
(a) set out clearly the nature of the proposal, the reasons for making the proposal and the effects of the proposal on local governments;”
So if you happen to be sitting next to one of your neighboring councils today – don’t steal their dessert. Interestingly, although there is a requirement that geography can be taken into account, there is nothing in the Act which prohibits amalgamations between geographically distant local government districts – so maybe don’t steal anyone’s dessert.
It is important to remember that affected electors means the affected electors in all of the affected districts – so if it is a proposal for the amalgamation of 2 districts and the affected electors are putting the proposal to the Advisory Board – the proposal must be signed by 250 affected electors or 10% of the total number of affected electors in both districts.
Let’s assume that a proposal has been made to amalgamate your local government with another local government. What happens now?
Bolting the barn door with the horse still inside stage
The Advisory Board has a number of options under clause 3 of schedule 2.5.
If the Advisory Board believes that the proposal is essentially the same as one in which they have considered an made a recommendation to the Minister within the last 2 years or that the majority of the affected electors who made the proposal no longer support it or that the proposal is frivolous or not in the interests of good government, the Advisory Board can decide to recommend to the Minister to reject a proposal without that brand of torture unique to the local government sector- a formal inquiry.
“3. Dealing with proposals
(1) The Advisory Board is to consider any proposal.
(2) The Advisory Board may, in a written report to the Minister,recommend* that the Minister reject a proposal if, in the Board’s opinion —
(a) the proposal is substantially similar in effect to a proposal on which the Board has made a recommendation to the Minister within the period of 2 years immediately before the proposal is made;
(aa) where the proposal was made by affected electors under clause 2(1)(d), that the majority of those electors no longer support the proposal; or
(b) the proposal is frivolous or otherwise not in the interests of good government.
* Absolute majority required.
(3) If, in the Advisory Board’s opinion, the proposal is —
(a) one of a minor nature; and
(b) not one about which public submissions need be invited, the Board may, in a written report to the Minister, recommend* that the Minister reject the proposal or that an order be made in accordance with the proposal.
* Absolute majority required.
(4) Unless it makes a recommendation under subclause (2) or (3), theAdvisory Board is to formally inquire into the proposal.”
Formal Inquiry Stage
The Formal Inquiry stage starts with notifying all the affected parties that a formal inquiry is going to be carried out, setting out details about the inquiry and advising that submissions will be taken for not more than 6 weeks after notification. As we all know – 6 weeks in a local government can mean (particularly for smaller local governments) that there are only two council meetings to consider the issue and make a submission. So, do not delay if you receive such a notification.
If the scope of the inquiry changes then new notification to affected parties must occur but the time frame for submissions in this circumstance is not contained in the Act so it might be shorter.
“4. Notice of inquiry
(1) Where a formal inquiry is required the Advisory Board is to give —
(a) notice to affected local governments, affected electors and the other electors of districts directly affected by the proposal; and
(b) a report to the Minister.
(2) The notice and report under subclause (1) are to —
(a) advise that there will be a formal inquiry into the proposal;
(b) set out details of the inquiry and its proposed scope; and
(c) advise that submissions may be made to the Board not later than 6 weeks after the date the notice is first given about —
- (i) the proposal; or
- (ii) the scope of the inquiry.
(3) If, after considering submissions made under subclause (2)(c), theAdvisory Board decides* that the scope of the formal inquiry is to besignificantly different from that set out in the notice and report undersubclause (1), it is to give —
(a) another notice to affected local governments, affected electors and the other electors of districts directly affected by the proposal; and
(b) another report to the Minister.
(4) The notice and report under subclause (3) are to —
(a) set out the revised scope of the inquiry; and
(b) advise that further submissions about the proposal, or submissions about matters relevant to the revised scope of the inquiry, may be made to the Board within the time set out in the notice.
* Absolute majority required.”
Submissions to a formal inquiry of the Advisory Board should address the matters contained in clause 5 of Schedule 2.5;
“5. Conduct of inquiry
(1) A formal inquiry is to be carried out, and any hearing for the purposesof the inquiry is to be conducted, in a way that makes it as easy aspossible for interested parties to participate fully.
(2) In carrying out a formal inquiry the Advisory Board is to considersubmissions made to it under clause 4(2)(c) and (4)(b) and have regard, where applicable, to —
(a) community of interests;
(b) physical and topographic features;
(c) demographic trends;
(d) economic factors;
(e) the history of the area;
(f) transport and communication;
(g) matters affecting the viability of local governments; and
(h) the effective delivery of local government services, but this does not limit the matters that it may take into consideration.”
In addition if your local government believes that there are other items that should be considered (we would suggests sustainability) then include those matters– but make sure that each of the matters outlined in clause 5(2) are covered well. It is also worth noting that any party affected by the proposal can make a submission – so you may have community members or groups that feel very strongly about a proposal to amalgamate, if then you can inform them that they can make a submission to the Advisory Board on the matter.
When the submission period closes, the Advisory Board will review the matters and provide a report to the Minister.
6. Recommendation by Advisory Board
(1) After formally inquiring into a proposal, the Advisory Board, in a written report to the Minister, is to recommend* —
(a) that the Minister reject the proposal;
(b) that an order be made in accordance with the proposal; or
(c) if it thinks fit after complying with subclause (2), the making of some other order that may be made under section 2.1.
* Absolute majority required.
(2) The Advisory Board is not to recommend to the Minister the making of an order that is significantly different from the proposal into which it formally inquired unless the Board has —
(a) given* notice to affected local governments, affected electors and the other electors of districts directly affected by the recommendation of its intention to do so;
(b) afforded adequate opportunity for submissions to be made about the intended order; and
(c) considered any submissions made.
* Absolute majority required.
It is important to note that clause 6 allows the Advisory Board to make a recommendation for an order different from the proposal which was advertised. However if the recommendation likely to be substantially different then the proposal advertised then everyone affected must be given the opportunity to make submissions.
Is the Advisory Board’s recommendation binding on the Minister?
The Advisory Board’s recommendation is not binding on the Minister but the Minister can not make an order under section 2.1 unless there is a recommendation from the Advisory Board to make that order.
“10. Minister may accept or reject recommendation
(1) Subject to subclause (2), the Minister may accept or reject arecommendation of the Advisory Board made under clause 3 or 6.
(2) If at a poll held as required by clause 8 —
(a) at least 50% of the electors of one of the districts vote; and
(b) of those electors of that district who vote, a majority vote against the recommendation, the Minister is to reject the recommendation.
(3) If the recommendation is that an order be made and it is accepted, the Minister can make an appropriate recommendation to the Governorunder section 2.1.”
It will be clearly seen from clause 10 subclause 1 that the Minister may accept or reject a recommendation of the Advisory Board, unless a poll has been held – which I will deal with shortly.
However take a look at subclause 3.
“3) If the recommendation is that an order be made and it is accepted, the Minister can make an appropriate recommendation to the Governorunder section 2.1.”
And then look at section 2.1
“2.1. State divided into districts
(1) The Governor, on the recommendation of the Minister, may make an order —
(a) declaring an area of the State to be a district;
(b) changing the boundaries of a district;
(c) abolishing a district; or
(d) as to a combination of any of those matters.
(2) Schedule 2.1 (which deals with creating, changing the boundaries of, and abolishing districts) has effect.
(3) The Minister can only make a recommendation under subsection (1) if the Advisory Board has recommended under Schedule 2.1 that the order in question should be made.”
So this is one of those Sir Humphrey moments – the Advisory Board recommendation is both binding and not binding. It is binding in that the Minister can not recommend to the Governor that an order be made that has not already been recommended to the Minister by the Advisory Board but it is not binding in that the Minister can refuse to make the order.
To simplify – the Minister can refuse to make an order that the Advisory Board wants him or her to do but if the Minister wants to make an order he/she can only make an order that the Advisory Board is happy with. So the Minister has a choice in relation to this subsection – do nothing or do what the Advisory Board wants.
Polls
Now this is important – the result of a poll in which at least 50% of the electors in one of the affected districts voted is binding on the Minister, where the majority of those electors voted against a proposal. However a poll result can not change the position that the Minister can make up his / her own recommendation for orders to the Governor – any recommendation to the Governor has to first have started as a Advisory Board recommendation to the Minister.
“10. Minister may accept or reject recommendation
(1) Subject to subclause (2), the Minister may accept or reject arecommendation of the Advisory Board made under clause 3 or 6.
(2) If at a poll held as required by clause 8 —
(a) at least 50% of the electors of one of the districts vote; and
(b) of those electors of that district who vote, a majority vote against the recommendation, the Minister is to reject the recommendation.
(3) If the recommendation is that an order be made and it is accepted, the Minister can make an appropriate recommendation to the Governorunder section 2.1.”
Polls can occur in two ways, either the Minister can require the poll or at least 250 electors of one of the affected districts or at least 10 % of the electors of one of the affected districts have signed a request a poll to be conducted. This request must be made to the Minister and must be received by the Minister within 1 month of the notice to affected electors advising them of their right to request a poll. If this occurs the Minister must order a poll.
The relevant clauses are 7 and 8 in schedule 2.5.
“7. Minister may require a poll of electors
In order to assist in deciding whether or not to accept a recommendation of the Advisory Board made under clause 6, the Minister may require that the Board’s recommendation be put to a poll of the electors of districts directly affected by the recommendation.
8. Electors may demand a poll on a recommended amalgamation
(1) Where the Advisory Board recommends to the Minister the making ofan order to abolish 2 or more districts (the districts) and amalgamatethem into one or more districts, the Board is to give notice to affectedlocal governments, affected electors and the other electors of districtsdirectly affected by the recommendation about the recommendation.
(2) The notice to affected electors has to notify them of their right torequest a poll about the recommendation under subclause (3).
(3) If, within one month after the notice is given, the Minister receives arequest made in accordance with regulations and signed by at least 250, or at least 10%, of the electors of one of the districts asking for the recommendation to be put to a poll of electors of that district, theMinister is to require that the Board’s recommendation be put to a poll accordingly.
(4) This clause does not limit the Minister’s power under clause 7 torequire a recommendation to be put to a poll in any case.”
If you are of the opinion that the Advisory Board is likely to make a recommendation to the Minister which your Council and community do not agree with. It would be useful for you to make plans for the drafting and circulation of a request for a poll, assuming, of course, that this is in the best interests of the good governance for your district.
The poll procedures are straight forward –
“9. Procedure for holding poll
(1) Where, under clause 7 or 8, the Minister requires that arecommendation be put to a poll —
(a) the Advisory Board is to —
- (i) determine the question or questions to be answered by electors; and
- (ii) prepare a summary of the case for each way of answering the question or questions; and
(b) any local government directed by the Minister to do so is to —
- (i) in accordance with directions by the Minister, make the summary available to the electors before the poll is conducted; and
- (ii) subject to subclause (2), declare* the Electoral Commissioner, or a person approved by the Electoral Commissioner, to be responsible for the conduct of the poll under Part 4, and return the results to theMinister.
* Absolute majority required.
(2) Before making a declaration under subclause (1)(b)(ii), the localgovernment is to obtain the written agreement of the ElectoralCommissioner.”
It is worth noting that the written report from the Advisory Board may contain recommendations in relation to names, wards and representation or this may occur after a Minister has accepted a recommendation to amalgamate. It is important to know that such recommendations can come from the Advisory Board so two amalgamating councils who wish to retain a particular structure, for example wards which have subcommittees in the same geographic areas as the existing councils – should think about make representations in relation to that matter as soon as possible after a Minister has accepted a recommendation. You may wish to in your submissions in relation to the first proposal indicate that if amalgamation is recommended that you would like an opportunity to provide further submissions on names, wards and representations (or even include those submissions in your initial submissions, if the scope of the Inquiry allows).
“10A. Recommendations regarding names, wards and representation
(1) The Advisory Board may —
(a) when it makes its recommendations under clause 3 or 6; or
(b) after the Minister has accepted its recommendations under clause 10,in a written report to the Minister, recommend the making of an order to do any of the things referred to in section 2.2(1), 2.3(1) or (2) or 2.18(1) or (3) that the Board considers appropriate.
(2) In making its recommendations under subclause (1) the AdvisoryBoard —
(a) may consult with the public and interested parties to such extent as it considers appropriate; and
(b) is to take into account the matters referred to in clause 8(c) to (g) of Schedule 2.2 so far as they are applicable.”
Then there are, of course, powers to make regulations about transitional provisions where an amalgamation is going to occur.
“11. Transitional arrangements for orders about districts
(1) Regulations may provide for matters to give effect to orders madeunder section 2.1 including —
(a) the vesting, transfer, assumption or adjustment of property, rights and liabilities of a local government;
(b) the extinguishment of rights of a local government;
(c) the winding up of the affairs of a local government;
(d) the continuation of actions and other proceedings brought by or against a local government before the taking effect of an order under section 2.1;
(e) the bringing of actions and other proceedings that could have been brought by or against a local government before the taking effect of an order under section 2.1;
(f) if the effect of an order under section 2.1 is to unite 2 or moredistricts, the determination of the persons who are to be the first mayor or president, and deputy mayor or deputy president, of the new local government;
(g) the continuation of any act, matter or thing being done underanother written law by, or involving, a local government.
(2) Subject to regulations referred to in subclause (1), where an order ismade under section 2.1 any local governments affected by the order (including any new local government created as a result of the order) are to negotiate as to any adjustment or transfer between them of property, rights and liabilities.
(3) Where an order is made under section 2.1 the Governor may, by order under section 9.62(1), give directions as to any of the matters set out in subclause (1) if, and to the extent that, those matters are notresolved by regulations referred to in that subclause or by negotiationunder subclause (2).
(4) A contract of employment that a person has with a local governmentis not to be terminated or varied as a result (wholly or partly) of an order under section 2.1 so as to make it less favourable to that person unless —
(a) compensation acceptable to the person is made; or
(b) a period of at least 2 years has elapsed since the order had effect.
(5) The rights and entitlements of a person whose contract of employment is transferred from one local government to another, whether arising under the contract or by reason of it, are to be no less favourable to that person after the transfer than they would have been had the person’s employment been continuous with the first local government.
(6) If land ceases to be in a particular district as a result of an order under section 2.1, any written law that would have applied in respect of it if the order had not been made continues to apply in respect of the land to the extent that its continued application would be consistent with —
(a) any written law made after the order was made; and
(b) any order made by the Governor under subclause (8).
(7) Regulations may make provision as to whether or not, or themodifications subject to which, a written law continues to apply inrespect of land under subclause (6).
(8) The Governor may, in a particular case, by order, vary the effect ofsubclause (6) and regulations made in accordance with subclause (7).”
Another less likely but equally frightening scenario
Panel Inquiries
If the Local Government Minister asks a local government to consider whether they should amalgamate or not – our advice would be to make sure that a thorough consideration of that issues is undertaken and demonstrable.
It is our opinion that, if a local government refuses to consider this issue or does not consider it fully, the Minister could form the view that good governance is not being achieved in that Local Government. This in turn could lead to the appointment of an panel inquiry into the Council and possible suspension of the Council’s Elected Members whilst that Inquiry is carried out and a decision made about the actions of the Council.
As everyone in this room knows, Panel Inquiries are unpleasant for all concerned. They are usually long and very costly – and there are provisions in the Act which can be used to bill the local government for the cost of the Inquiry into it.
Perhaps the most important of all for our purposes today, is that in the scenario where the Council is suspended and Commissioners appointed – the Commissioners or the Panel Inquiry would carry out the assessment of whether amalgamation should proceed.
Summary – Current Provisions
- If asked to by the Minister, conduct a thorough and meaningful examination of whether your local government should amalgamate.
- Speak to your neighboring local governments – they may well have the same view as you.
- Make sure that any consideration of the amalgamation issue is well documented.
- If the Advisory Board launches a formal inquiry – take action immediately – do not delay because there is maximum of a 6 week deadline and it may be much less than that.
- Make sure that you consider the categories that the Advisory Board may consider (see above).
- Think about wards, names and representation if amalgamation occurred and consider making submissions on those issues to the Advisory Board.
- Once your submission is in, think about the next step – put in place plans for what you will do if the decision is not favourable – do you want electors to ask for a pool?
- Upon receiving notification of the decision put in place your plans early – if you do want a poll you only have 1 month from the notification of the decision for the electors to request one.
If you have any questions about amalgamations or the process to be followed, please contact Anne Wood on (08) 9321 3755 or awood@kottgunn.com.au.
The information published on this website is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.