A percentage of ratepayers across the region have failed to pay their rates for this financial year leaving smaller councils exposed financially.
Balranald Shire Council, Murray River Council and Buloke Shire Council are struggling to recoup outstanding rates which they rely on to run their day-to-day operations.
At the most recent Balranald Shire Council meeting, an audit was conducted that revealed 14.8 per cent of rates were outstanding.
As of February 15, the total amount of outstanding rates amounted to $214,193.
This figure included water and sewer rates as is the statutory requirement in NSW.
Balranald Shire Council general manager Aaron Drenovski said rates were critical for council's income.
"We are reliant on the income rates generate," Mr Drenovski said.
"When it gets beyond a certain amount, council can pursue legal action.
"There is a policy that talks about processes we will take to retrieve unpaid rates and is available for the public to view on our website."
Currently Balranald Shire Council have 13 separate instances of ratepayers owing debts of more than $5000, two of which they have sought legal action towards.
"People pay interest on any unpaid rates which is an incentive to pay rates on time," he said.
"Grants are our main source of income, however rate income is still extremely important."
Carl Millington of Pitcher Partners — an accounting, audit and advisory firm — conducted the audit for Balranald Shire Council and said the results were not uncommon for small councils.
"It's always a challenge for regional and country councils to get the number of rates outstanding down," Mr Millington told the meeting.
"What councils need to do is look at what prompts these numbers and what can be done to explain them.
"It is high, but council are going to struggle to get (the debt) much lower than that."
Buloke Shire Council currently has $2.4 million worth of rates outstanding, compared to $1.5 million this time last year.
A spokesperson for the council said it should be noted that the last instalment of rates still needed to come in at the end of May.
Buloke Mayor David Pollard said rates were crucial for the council's finances.
"The big issue the small councils have is that rates are our biggest income, along with grants," Mr Pollard said.
"If we don't get rates and grants, we don't exist."
He said there were many options for people to pay their rates.
"People can pay on either a monthly, quarterly or annual basis, there are always options for them," he said.
Murray River Council's recent amalgamation between Wakool Shire Council and Murray Council has greatly affected their outstanding rates.
Due to the timing of the amalgamation, the most recent reporting period ended before the due date for the fourth instalment of rates.
As a result, the amount of outstanding rates in June 2016 was 20.49 per cent, compared to 6.23 per cent in June 2015.
While smaller councils have experienced difficulties in recouping outstanding rates, Swan Hill Rural City Council has projected to have a rate determination surplus of $224,900 — better than their projected forecast for the 2016/17 financial year.
Swan Hill Rural City Council chief executive officer John McLinden said unlike some of the smaller councils, rates were not a big concern for council.
"Because our rates are relatively low, we find that we have a pretty high compliance with people paying their rates," Mr McLinden said.
"For people who do have large outstanding debts, we have legal avenues we can follow which have been really effective."
Mr McLinden said only a small proportion of Swan Hill's rate payers failed to pay their rates.
"Some have financial difficulties, others just forget, so the number isn't overwhelming.
"But we should absolutely be chasing up unpaid rates. It requires every other ratepayer to pick up the slack."
To read more about this story, grab a copy of Wednesday's Guardian (March 15).