A person dressed as a banana and handing out bananas in protest against mayoral expenses has disrupted a local shire council meeting north of Melbourne.

The stunt was apparently a barb directed at Mitchell Shire's mayor Sue Marstaeller over her trip in her council car to Coffs Harbour, which has a tourist attraction known as the Big Banana.

The Broadford meeting was called to a halt after the large banana wandered around the chamber.

Former mayor Bob Humm said it was unfortunate a council meeting was cut short by the person's antics.

"I think it was very disappointing for probably a couple of the councillors because a couple of them had some fairly important items on the agenda that they needed to get moved and passed through the council," he said.

"I was a little bit surprised that the meeting was completely adjourned; the councillors possibly could have gone to the council room — called the meeting off for half an hour, got [to] the council room, then come back and completed the meeting.

"But obviously the mayor was quite offended, which she has the right to be offended because she'd been given the opportunity, the right, to be able to use that vehicle by the CEO in the first place."

Mr Humm said it was not the first time locals had resorted to the tactics. Someone dressed as a gorilla ran around the chamber when the shire was discussing circuses about 10 years ago.

Mitchell Council had 'serious' issues to discuss

Mr Humm said he believed the person dressed as a banana was a local being disruptive.

"I think there's been enough said and enough put around in the local papers in regard to the mayor and the trip up to Coffs Harbour ... I think it's time we put it aside and got on with more serious things," he said.

Mitchell Shire ratepayers have a fortnight to decide whether they want to seek an exemption to new laws that will see all Victorian local council rate increases capped at the inflation rate of 2.5 per cent, starting in mid-2016.

The council has notified the Essential Services Commission that it is considering the exemption option, and it has until the end of March to make a final decision.

Ms Marstaeller said under a 2.5 per cent cap $633,000 would be cut from the budget for the next year and a total of $44 million over the next decade.