An "accounting trick" will help mask a $2.5 million debt to Shellharbour City ratepayers incurred by The Links Shell Cove golf course, according to Councillor Peter Moran.
On Tuesday night, Shellharbour councillors will be asked to write off "accumulated operational deficits" of $890,000 at the Links, clearing an internal "negative restriction" on the council's cash reserves.
Council staff say the write-off would have no impact on the council's bottom line as "this debt has never been officially reflected in council's financial reports".
Cr Moran said the problem arose after the sale of six residential lots at the golf course failed to cover money owed to ratepayers.
Cr Moran said for years, the six lots had been used as an excuse to fund a range of projects at the golf course and cover ongoing losses, which in recent times have been more than $300,000 a year.
"The golf course was racking up losses but each time it was said 'it's OK, we have these blocks of land to cover the costs'," Cr Moran said.
"In 2011, a report to council stated the golf course owed the community $1.6 million ... these six lots have been sold and now we are being asked to write off $900,000.
"These lots were a community asset and could have been sold to invest in a productive asset ... we keep being told it is unsustainable to sell assets to fund operating costs."
On Tuesday night, councillors will once again meet behind closed doors to discuss the future of the golf course, which staff say has been "underperforming to an unsustainable degree".
Last year, the council resolved to consider a range of options for the course, including the sale of the entire site, sale of the Links Hotel and the proposed accommodation site and the long-term lease of the course.