Cr Murray said there was a projected deficit of 3.8 million for June 2019, if council did not address the problem.

"There are a number of reasons for our position, but as mayor of Armidale Regional Council I take full responsibility for the current position,” Cr Murray said

"I do not wish to, or believe it to be productive to, blame anyone for our current position, we have to move forward."

Cr Murray said he had held discussions with CEO Susan Law who was working with senior staff and looking at ways to reduce the deficit.

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"I will warn you there will be significant cuts across the board. Further information on where and how we reduce this deficit will be worked through in a workshop next month," Cr Murray said.

Cr Dorothy Robertson thought council's position was not as bad as it seemed from a first glance.

"Despite all the doom and gloom about deficits, effectively the value of council's assets has increased over the year by $17.6 million, from $861 to $879 million," she said.

"Yes, there are difficulties, but on the other hand we have got successes and our assets have increased."

Cr Andrew Murat agreed with Cr Murray and said the issue needed to be addressed.

"It's not all doom and gloom, but we can't just let things go on the way it is with increased deficits every year," he said.

Cr Ian Tiley said council had an operating surplus of more then $16 million at the end of June 2017.

"In large part merger money from my friend Mike Baird," he said.

"It's not all doom and gloom. We do have quarterly budget reviews.

It's incumbent upon us to convey to our staff that they need to come back [to] us with a methodology where we can come back to at least a zero situation at the end of June 2019.