Snowy Monaro Regional Council mayor, Cr Chris Hanna, said he is shocked and concerned council could lose $5 million following the NSW Grants Commission releasing its proposed changes to the distribution of financial assistance grant funding.

Council was informed last week it stands to lose $5.12 million, a crisis Cr Hanna said is the biggest facing our region.

At this week’s council meeting, a report will come before councillors detailing the risk the organisation faces if the grants commission does not amend its re-modelling for our region.

“It’s the biggest concern facing council. I’m annoyed that we have been going on the right track to improve our financial sustainability, then we could have $5 million ripped out,” Cr Hanna said.

“This will put us back at least four years. We’ve made hard decisions with a special rate variation. The state government needs to intervent and say no, this can’t happen.

Council is seeking an extension to provide its feedback, citing the short timeframe for responses and a lack of details on the modelling.

Deputy mayor, Cr Tricia Hopkins, said a lot of discussions need to happen urgently.

“Lots of conversations need to happen quickly, this will have a massive impact on our community," Cr Hopkins said.

"We have worked hard to identify inefficiencies. The lack of detail around the new methodology the commission will adopt also doesn't help our submission.

"How does $5 million just disappear without better reasoning."

Cr Hanna said some councils will receive more money under the changes, but many others including Snowy Monaro are much worse off.

"By the time the review is completed, it will take some months. We will have to start making hard financial decisions straight away," Cr Hanna said.

In the report to council, it states 'not a lot of details are available on the modelling itself. Only high-level generic statements are provided'.

'This makes it difficult to determine what aspects of the methodology is impacting on individual councils. It also makes it difficult to determine exactly what approach is being used in the methodology. Initial review by staff indicates there are a few areas that will need investigation,' the report continues.

Council is expected to vote in favour of submitting a review of the commission's new funding model.