So when Shellharbour won the A R Bluett Memorial Award - at the state's annual Local Government Conference on Tuesday night - it was a significant moment on the city's trip back from the governance wilderness.

Named for a respected former local government secretary, the A R Bluett award recognises "excellence and innovation" and is contested by councils who want to be recognised as the most progressive in the state.

And as Mayor Marianne Saliba said on Tuesday night, Shellharbour's progressive credentials have been earned through some tough years.

"What has not changed is the spirit of our residents and the strength of our community," she said.

"It is a genuine honour and privilege to be Mayor of Shellharbour City."

The council was sacked for being dysfunctional in 2008, placed under the control of government-appointed administrators for several years.

In 2015 it imposed an unpopular rate rise while funding a civic centre that had divided public opinion. The centre has since opened to some local and national acclaim.

Then from late 2015 the council faced a bid by the then-Baird government to merge Shellharbour with Wollongong (and possibly Kiama).

The merger would have gone ahead had Shellharbour not taken legal action, eventually saving not just itself but also Wollongong's standalone status when the government backed down.

"[That] was a terribly difficult time for staff, councillors and residents," Cr Saliba said of the merger period.

"Yet our community rallied. They believed in this city and its unique identity. They stood with council and fought for Shellharbour."

Cr Saliba said the award recognised the councillors, staff and residents of the city.

"We have demonstrated courageous leadership, responsiveness, responsibility and care for our community ... a shining example of how commitment, teamwork, innovation and integrity can transform a city," she said.

"It has been truly remarkable. We are forging a new identity, bridging our dual personas as one of NSW's oldest local government areas and newest cities. We embrace our entire community, from those whose roots in Shellharbour go back generations to newcomers attracted by our stunning environment and enviable housing opportunities."