IPART has further recommended that the shire enter into a JO (Joint Organisation) with Clarence Valley (deemed unfit), Coffs Harbour City (fit) and Bellingen Shire (unfit).

IPART Chairman Dr Peter Boxall said 52 of the 139 proposals received were found to be ‘fit’ under the Fit for the Future criteria established by the Government last year. These included four merger proposals (covering nine councils) and 48 proposals from councils proposing to stand alone.

“All proposals to either stand-alone or merge were assessed according to whether they delivered the scale and capacity, financial sustainability, the ability to effectively manage infrastructure and services, and efficiency for the community as required under the criteria,” Dr Boxall said.

“Of the 87 proposals found to be unfit, 60 (around 43% of all proposals received) did not have sufficient scale and capacity, 18 did not meet the financial criteria and nine did not meet either of these criteria.

”As we have said from the outset, our assessment of scale and capacity is about more than population and, in making these assessments, we have considered the Independent Local Government Review Panel’s preferred option and whether the proposal demonstrates the council can achieve the key elements of scale and capacity.

“Despite smaller populations, more regional councils were assessed as satisfying the scale and capacity criteria than metropolitan councils because the ILGRP’s preferred option for regional councils recognised the local circumstances and in many cases did not propose a merger.”

For Nambucca Shire's general manager, Michael Coulter, the result is a welcome vindication that the council is on the right track.

"We have had to make a lot of hard decisions like shedding assets, taking on the protests of residents when it comes to bridge repairs and the restructure that saw us lose 10 per cent of our staff ... none of that has been easy or fun," Mr Coulter said.

Steve McGrath, Coffs Harbour City Council's general manager, had a similar response.

"This is a really good result and personally I am very satisfied," Mr McGrath said.

"It shows an organisation that is committed to its strategies and is delivering, which bodes well for Coffs."

He added that while this result was good, the council needed to remain resolute: " We will be closely watched".

For its part Bellingen Shire Council officers are currently analysing the report.

As one of 58 proposals assessed as not ‘Fit' at this point based on IPART’s assessment of the Fit for the Future ratios, the council is seeking clarity around a number of matters relative to the report.