Newly elected mayor of the Bega Valley Shire Council, Michael Britten, has flagged a closer working relationship with the ACT government.
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Cr Britten - who took over from outgoing mayor Bill Taylor last Wednesday - said the council had until June 2015 year to convince the state government that it was efficiently run and financially viable.
"As much as we are part of NSW, I believe we are also a logical extension of Canberra for population and economic growth and apart from extending relationships with surrounding councils we need to continue to do so with Canberra," Cr Britten said.
It was with "some trepidation" that he faced what he called the 'reinvention' of local government under the state government's plan known as Fit for the Future, he said shortly after being elected to the position by his fellow councillors last week.
"At present the council is performing better than average in NSW and it is not seriously suggested that the council should amalgamate with any other council," he said.
"We will, however, be participating in a group situation with several other councils under a new collaborative relationship ... which will include several councils in this part of NSW and bordering on Canberra.
"The intent is to rationalise where possible some facilities and services and achieve cost savings with an economy of scale."
The NSW government has announced a $1billion package to assist councils across the state to become 'fit for the future'.
Under the plan - the aim of which is to deliver better services to ratepayers - financial incentives will be given to assist councils that decide to merge.
Councils, including Bega Valley Shire Council, have until June 30, 2015, to submit their proposals to government which will then be independently assessed.
Bega Valley Shire Council general manager Leanne Barnes has previously stated that it was not one of the councils being targeted for amalgamation.
The council's financial position has been ratet as 'strong', as opposed to neighbouring Euroballa Shire Council which has a 'weak' rating.
Cr Britten - who has lived in the shire since 1974 - said in some ways the Bega Valley community was lucky to be removed from the cities.
"We also suffer from the penalties imposed by being remote," he said.
Proper development of the Port of Eden and the airport could help reduce that remoteness, he said.