It comes as local roads are in the worst condition in living memory after five months of unrelenting rain, expected to at least double the $28 million maintenance backlog. 

The 2014-15 federal budget decision to freeze indexation of a general purpose grant – which council relies on for 10 per cent of its overall operating income – has begun to bite.

Councillors have been told to expect a budget reduction of $1.9 million over three years, beginning with $362,278 this financial year.

New mayor Greg Conkey said council will have to slash services. 

“Right now need to look at our priorities and work out what services we have to cut,” Cr Conkey said.

“The federal government collects all the revenue and what they're dishing out to us is paltry.

​”Our roads are appalling as everyone knows and its a major priority to find funds to fix them, but it doesn't help when we're treated this way by the federal government.

“We will sit down with (Riverina MP) Michael McCormack to express our displeasure.”

Cr Conkey claimed the state government was compounding the problem by shifting $3.4 million of costs to council every year.

Councillor Paul Funnell said council’s costs grow by 4 per cent a year, exacerbating the funding squeeze.

“They're boasting about saving money at the federal level but residents are paying; either through reduced services or increased rates,” Cr Funnell said.

“Federal and state governments offering to help council apply for roads grants is a lame duck solution when they’re collecting hundreds of millions of dollars in excise meant for road repairs.”

Mr McCormack said councillors had neglected to mention the recent $13 million Roads to Recovery federal handout.

“The increase in Roads to Recovery has more than compensated for the freezing of FAG grants,” Mr McCormack said.

“I agree councils are carrying more of the burden that were once domain of state governments to resource communities.

“But councils need to prioritise their commitments when roads are so bad.

“Expenditure on items like public art and events should be reassessed.”