Further service cuts are likely to improve the bottom line, but it still equates to a $153 loss for every Wollongong ratepayer.

If grants are included the deficit is about $3.2 million.

The situation is likely to get worse before it gets better, according to the council's annual report, details of which were released yesterday.

"A continued trend of deficit results means that over a period of time council will not be able to carry out its existing levels of service, and maintain and replace its assets ... at the time when they need to be replaced," the report said.

"Continual losses may indicate concern about council's ability to be financially viable in the longer term."

The deficit is the third highest over the past five years.

General manager David Farmer said he was not "planning" to seek a rate rise to address the problem.

"We are not planning on seeking a special rate variation for the upcoming year."

Yet according to the report, there are few options.

"Council's long-term sustainability (is in question) without a reduction in expenditure, increase in income, or both," the report said.

The figures come from a summary of the annual report document published on the council's website. The council's full annual report is due next month.

The consecutive deficits follow decades of under-investment in the region's infrastructure including roads, bridges, drainage, parks and buildings.

In September engineer and financial forecaster Professor Percy Allen said ratepayers would have a $1 billion infrastructure repair bill within 20 years if money wasn't found.

A set of five consecutive rate rises were aimed at addressing the issue, but the funds raised fell well short of what was needed.

Council efforts to turn finances around though are already bearing fruit with the deficit dropping from a reported $15 million deficit in April.

The council aims to cut its deficit to $4.4 million next year and by 2013 record a surplus of $2.4 million.