In my mind, Rochester has always been a City, for the simple reason that it has a cathedral. Medway Council was created after a referendum of the good citizens of the former Rochester City Council and Gillingham Borough Council. The first referendum didn't give the government the answer they wanted (we had the audacity to vote NO). So, we had another for which there was little publicity and next to no campaigning and of the small number who bothered to vote, well, the government got their way.
Once the "merger" happened, Medway Council inherited Gillingham Council 's large cash surplus. The merger itself was actually more a takeover.