THE rollout of a contentious federal government freeze on council grants is under way with the City of Ballarat expected to loose $350,000 from next year's budget.
Municipal Association of Victoria president Bill McArthur said at the end of last month, Victorian councils would start to feel the impact of the freeze with $5.65 million missing from the first quarterly payments.
Mr McArthur said some councils had already taken extreme measures, like scaling back road maintenance and other council services, to make up for the shortfall.
He said rural areas were expected to suffer the hardest with grants providing more than 30 per cent of total funding in some communities.
The council's chief financial officer, Glenn Kallio, said the council had not been advised by the Federal Government on whether the freeze would be ongoing.
He warned it would be difficult for the City of Ballarat to foot the bill for this freeze and there was a possibility rates would increase by a half a per cent to meet the costs.
"There is also a possibility the council would try and reduce costs from other projects to pay the costs associated with this freeze," Mr Kaillio said.
He added the council had directed officers to contact the MAV and Australian Local Government Association to research what opportunities were available for the council to join collaborative action in the sector including lobbying the federal government directly on this issue.