Shellharbour residents face the prospect of hefty rate increases as councillors decide whether to push ahead with a request for extraordinary rate rises from next year.
The council is expected to vote tonight to tell the state's pricing regulator it intends to seek a rates variation above next year's 3.4 per cent rate pegging limit.
While the decision is yet to be made, most councillors see rate rises as the only way to rein in the city's $45 million maintenance backlog without cutting services to the community.
Figures revealed last month showed increases of up to 42 per cent by 2016-17 would be needed to bring the city's asset renewal in line with the state average.
Average homes would be slugged with a $414 increase over four years under the proposal, taking the average general rate from $976 to $1390.
If the council agrees to push ahead tonight, it will have until March to speak to residents and finalise an application to the Independent Pricing and Regulatory Tribunal.
Mayor Marianne Saliba said Shellharbour had a "demonstrated need" for higher rates and she would support notifying the tribunal.
"One of the things ... brought to our attention time and time again is our asset renewal, the fact that we have roads and sport fields and facilities that are just not up to scratch," she said.
While the council had taken measures to cut costs, including a major internal restructure, further cost cutting would lead to a reduction in services, she said.
Deputy Mayor Paul Rankin acknowledged rate increases would be unpopular, but said past councils had failed to maintain the city's existing assets.
However, not all of Shellharbour's councillors are in favour.
The issue has arisen as the council also considers the $55 million City Hub project, making it one of the most divisive matters since the council was elected in September last year.
Rates would not be used to fund the hub, but several councillors said it was inappropriate to seek a rate rise while splashing out on a new building.
"If the City Hub project wasn't going ahead we wouldn't be in this position," former mayor Kellie Marsh said.
"I'm a firm believer that all businesses need to be constantly economically gardening and looking for ways that they can cut expenditure and reduce their costs."
Numerous residents have also spoken out against rate rises.
Several councillors urged residents to speak up, including via the council's online budget calculator.
Shellharbour's group manager finance Tony Gearon said feedback would help create a priority list for asset renewals.
"The council's backlog of asset rehabilitation ... is growing faster than we can reduce it, and the only way that the council can ... get on top of that backlog is by a reduction of services ... or by raising additional revenue," he said.