Three Shellharbour councillors have questioned the appointment of Labor councillor John Murray to the council's new business unit advisory board.
Five people were appointed this month to the board which will give "an outside commercial perspective" on the business activities of the council, the priority being Illawarra Regional Airport.
At a meeting last October, Shellharbour City Council general manager Michael Willis said it was his preference that no councillors be appointed to the board and councillors said they were surprised when Cr Murray was announced as one of the five.
Councillors Peter Moran, Kellie Marsh and Helen Stewart signed a rescission motion after they learnt board members would be paid $500 per meeting.
At Tuesday night's council meeting, they questioned if Cr Saliba had declared an interest when interviewing her Labor colleague, Cr Murray.
However Mr Willis said Cr Murray had been selected based on his business experience only, adding that because he was a serving councillor he was not entitled to any of the payments the other board members would receive.
An angry exchange followed between Cr Saliba and Cr Moran after Cr Murray labelled the rescission motion "grubby".
Cr Saliba said her integrity and honesty had been questioned, with Cr Moran angrily denying he had called the Mayor dishonest.
Cr Saliba said she only became part of the selection panel after fellow councillors put her there.
Cr Moran said he was disappointed Cr Murray was chosen after the general manager made it clear he didn't want councillors on the board.
He said the revelation Cr Murray was not being paid the $500 fee was relevant, but the three councillors acted on information they had received from council staff.
Cr Moran said regardless of this, the funds for the board would have been better spent hiring a consultant with airport experience.
Cr Murray said he was keen to use his business acumen and serve on the board without payment as it was of interest to him and thought if anything being a councillor would harm his chances of being selected.
Cr Marsh questioned the local business knowledge of the new board, before Cr Saliba pointed out a part owner of Wilsons Holden was one of five selected.
"Do they sell planes now?" Cr Marsh asked.