The issue will be raised at the council meeting on May 4 when council discusses the exhibition of its Integrated Planning and Reporting documents.

Council staff are recommending councillors endorse Scenario 2 - Maintain, contained in the Long Term Financial Plan (LTFP) 2023-2032 which currently models "a single year special variation increase to rates of 35 per cent permanently applied in the rate base, acknowledging the immediate and significant need council has to generate additional revenue to cover increasing costs and ongoing asset management needs".

It is one of three scenarios in the LTFP, with two of those outlining the need for a special variation to rates to generate additional income.

Council is predicting a loss of $9.45 million in its general fund for the next financial year, 2022/23.

It had originally predicted a loss of $7 million in its general fund for this current year 2021/22 but at the halfway mark at the end of December it was revised downwards to a loss of $8.3 million.

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"Without an SV (Special Rate Variation), council is not able to remain financially sustainable. Rising costs exceed our capacity to generate income and meet the needs of our community with service provision and asset maintenance. Increasing our revenue source is required," newly confirmed CEO Anthony McMahon said in his report to council.

There have been previous warnings by the mayor, Russell Fitzpatrick of council's unsustainable financial position.

Council has applied for - and is likely to get - approval for a 2.5 per cent increase to rates for the coming financial year, 2022/23. It had been given approval by IPART (Independent Pricing and Regulatory Tribunal) for a 0.7 per cent increase, which would not have covered rising costs.

The 2022/23 capital program totals $81million with $45 million being funded from grants.

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"Developing the 2022-23 budget has been incredibly challenging given our limited capacity to increase income and the numerous external cost increases we must absorb including fuel, insurance and construction costs," Mr McMahon said.

If endorsed by councillors, council proposes to start the process with IPART for a 35 per cent increase in the 2023/24 financial year. Part of that process is to demonstrate consultation with the community on the matter and a number of community meetings are planned starting with Bemboka on Saturday, May 7, 10-11.30am at the hall car park.

Council has been aware of the strains on its finances since 2016, and in 2020 the then general manager Leanne Barnes said it had been taking steps to reduce the deficit.

"This situation has escalated since the start of 2020 as a result of cost pressures created by the 2020 Bega Valley bushfires and the economic impacts of COVID-19," Ms Barnes said in June 2020.

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