At June 30, 2021, council required $93m to meet the needs of both internally and externally restricted reserves but total cash was $85m.

However state and federal government debtors alone stood at $16.9m of funding owed to council for grants on Disaster Recovery Funding and other projects, acting CEO Anthony McMahon told councillors. Although $5m of that $16.9m was for work carried out late in the year, or for which government funding milestones had not yet been met.

Council has not drawn down the loan in relation to the Merimbula Airport terminal. "When this is drawn, the funds raised will also be assigned to reimburse the reserves against which the terminal works have been applied," Mr McMahon said.

"Therefore, it is proposed that the internally restricted funds released at June 30, 2021 will be reinstated in 2022 from the funding received via outstanding government debtors and loan funds," Mr McMahon said.

Crs Robyn Bain, Mitchell Nadin and Tony Allen wanted to highlight the issue of government not paying its bills and block transfer of the $8m which would have resulted in a qualified audit.

Finance officer Judy Jordan strongly cautioned against the move pointing out council had $18m of contract liabilities attached to other government funding which was for work, yet to be carried out.

Mayor Russell Fitzpatrick said there would be $13m in the unrestricted fund by August. Council agreed to transfer $8m temporarily and advocate to government on financial impacts of carrying their unpaid debts.