Council will demonstrate its sustainability into the future in a Council Improvement Proposal (CIP), as part of the state government $1 billion Fit for the Future package announced in September 2014.

The state government has called on all local governments to demonstrate their strength to develop and improve the communities they serve and go through a "self-assessment" process, after which they would submit a roadmap to demonstrate how they would remain 'fit for the future'.

Part of the package considered amalgamating some councils. In the Illawarra, Shellharbour would partner with Kiama and Wollongong. However, a report tabled at this week's council meeting stated "this is not proposed for (Shellharbour) council".

This was based on the findings by the Local Government Review Panel Final Report that each council appeared sustainable in the medium term, boundaries do not pose urban management problems and water and sewerage were separate.

The council was noted as having a moderate-negative outlook, but the implementation of the Special Rate Variation (SRV) would address the issues the council faced.

The council report stated that while council could not achieve the benchmark in sustainability, efficiency and infrastructure and service management, it could "meet the requirements" of the Independent Pricing and Regulatory Tribunal (IPART) criteria.

The CIP will be submitted to the OLG on June 30.