The Government has formally told the council it would not refund the amount and the City has no plans to consider legal action to get it back.
Last year�s City of Swan budget absorbed the $2.2 million hit � a budget that asked ratepayers to fork out an extra 5 per cent in rates and pay specified area rates for several big-ticket items.
There is not expected to be any impact on the impending 2015-16 budget.
The City was one of few local governments to comply with the merger plans and was shocked when the Government aborted the plans.
Mayor Charlie Zannino said Swan�s merger planning was the most advanced of all local governments.
�At that stage (when mergers were cancelled) we didn�t know how much we had spent because we weren�t keeping an absolute tab,� he said.
�We knew it was expensive, it was only after the whole thing was called to an abrupt halt that (executive manager corporate) Colin Cameron went back and did a calculation. I don�t think we�d go as far as taking legal action� it would cost a lot and you�d be wasting a lot of ratepayer money.�
Mr Zannino said the $2.2 million could have been spent on local infrastructure.
�There are many projects recommended by councillors, such as footpaths, new play equipment, verge maintenance � the list goes on and on,� he said.
An initial $1.7 million was provided to the local government sector when the State Government�s merger plans were first initiated.
However, the City�s planning went above the State Government�s criteria, resulting in �claimable� costs (as determined by the State Government�s guidelines) of $810,000 and �non-claimable� costs (under the same guidelines) of $1.41 million.
Local Government Minister Tony Simpson has indicated further funding would only be considered when or if councils successfully initiated their own reforms.
The City has already approached neighbouring councils but none are interested.
�From the time the reform process was announced, the City of Swan worked hard to voluntarily affect amalgamations with our neighbours,� Swan chief executive Mike Foley said.
�The only meaningful dialogue commenced when the Town of Bassendean considered local government reform would be mandated, as the Town of Bassendean is opposed to an amalgamation with the City of Bayswater.�