Rick Hunter says Kingsclear may be better off on its own rather than merging with Hanwell. (Kingsclear)

The chairman of New Brunswick's Kingsclear local service district says he's not opposed to a merger with Hanwell's local service district, but says Kingsclear might be be better off on its own.

A feasibility study is looking at governance options for the two local service districts (LSDs) near Fredericton, including a possible merger.

The other two options are for each to become a separate rural community or to remain LSDs.

Rick Hunter, chairman of the Kingsclear LSD, says the community's population is growing at about five per cent a year, but community development is hindered by its current status.

"We can't borrow money as an LSD. The reason we have a firehall now is that the people built it, through volunteering and potluck suppers. It's a beautiful facility. But we can't borrow money to go out and build a piece on it," Hunter said.

"We've had stakes in the ground now for three months and we can't get the money to actually go ahead and do that project and complete it within one year as an LSD."

Local Government Minister Bruce Fitch announced the study on Tuesday. It's the latest of a series of changes to how small municipalities and unincorporated areas are governed.

The study will assess potential boundaries, a name for the new community, a number of councillors, potential services and tax levels.

Local residents, organizations and businesses are being consulted through a roundtable process, which is being led by Peter Michaud.

Hunter says even if the community remains an LSD, there are services the communities can share to reduce costs, such as firefighting.

He says there's been some discussion of setting up a new satellite fire station in Hanwell.

Susan Cassidy, the chairwoman of the Hanwell LSD, says all three options have their merits.

She says the regional community option would give the residents more control over the way their taxes are spent.