Port Stephens Council is in a fortunate position for a couple of reasons - it has been identified as a sustainable stand-alone council and its general manager Wayne Wallis has been at the coalface of merger processes in both regional Victoria and Queensland.

Mr Wallis believes all councils - even those coming from a position of relative strength - need to be asking critical questions of themselves.

"The Baird Government's Fit for the Future blueprint for local government has seen 152 councils across the state mobilise in order to prepare their responses to the criteria set out before the June 30 deadline," Mr Wallis said.

"The reform package comes with a significant carrot for councils, with almost $1 billion on offer to encourage councils to amalgamate [including $5 million for any two merging councils].

"Boundary changes are also likely to be considered, however there are no government dollars on offer."

Mr Wallis said that Port Stephens had been identified by both Treasury Corp and the Independent Local Government Review Panel as being financially sustainable with the scale and capacity to meet its community's needs.

"Therefore it was recommended for no change," he said.

"For this we can thank a rolling schedule of structured business reviews which commenced in 2011 and have played a big part in turning annual deficits into underlying surpluses.

Mr Wallis said council would be engaging both at Hunter Councils level, and also with its neighbouring councils on a more one-on-one basis.

"We will continue to talk and listen with councils and [consult with] the community when it is appropriate to do so.

"Boundary realignment is not a priority for Port Stephens; however this position is no reason to rest.

"With a State election looming we are conscious of the fact that things can, and may, change.

"This work is ongoing and will be completed in lock step with our councillors with the end goal being to remain a sustainable organisation into the future."