A council in greater Hobart is "perilously close" to insolvency and is considering a rate increase of up to 19 per cent to survive, the Mayor says.

Glenorchy City Council, in Hobart's north, has had a turbulent past, with all aldermen sacked in October by the Tasmanian Government following years of dysfunction and in-fighting, with an election held in January for council positions.

A scathing report released by a board of inquiry late in 2017 found a culture of animosity, defiance and distrust among aldermen, with Lord Mayor Kristie Johnston being undermined by her colleagues.

Alderman Johnston, who was re-elected in January with a large personal vote, told ABC Hobart she blamed her predecessors for the poor state of the council's finances.

"It is that serious, that with a series of deficits that have occurred over a number of years, major project failures, the cost of the board of inquiry and significantly reduced cash reserves, we are perilously close to insolvency," she said.

"That could be, depending on the decisions we make, as soon as 12 months, so it's quite a serious concern to us."

Alderman Johnston said council would be "leaving no stone unturned" to identify where saving can be made, saying "asset sales, lowering employee costs, core and non-core services", were on the table, admitting a double-digit rate increase percentage would need to be considered at the June budget meeting.

"We haven't yet set a figure … but we are looking at something in the high teens," she said.

"It's not a fair situation and I am angry, and the community is angry."

Residents pay for others' mistakes

The news of the steep hike was not well received by some Glenorchy constituents.

Resident Michelle Austen said the rate increase would greatly affect homeowners.

"A lot of families that are struggling to survive will now have another bill that's gone up again," she said.

"It'll affect families and the elderly folk, and having a hike on the rates will make matters worse."

Michelle Austen said those struggling would find a large rate rise hard to cope with. ( ABC News: Carla Howarth )

Ms Austen said it was unfair current residents would pay for the mistakes of previous councils.

"It will put a strain on the family income," she said.

On Alderman Johnston's Facebook page, the reaction was mixed.

Ross Harris did not mince words.

"Maybe all rate-payers withhold paying the 'extra' amount until those arseholes are made accountable," he wrote.

Recent arrival to the area Jeremy Sibson said he was "very annoyed".

"But as I've never paid rates before, I will have nothing to compare it to so I guess that's the bright side of it all," he wrote.

Brenda Schloss described it as an "appalling situation".

"Raising rates is not the solution to what is corrupt and inefficient operations. There needs to be a sound and solid internal review of current management practices and a decrease in outsourced contracts which are costing a fortune. There also needs to be a rationalising of staff.

"I am sick of going into the council offices and seeing staff sitting around doing nothing. This is what we are paying for."

But John Mountford said the Glenorchy community "needs to get behind our council and support their efforts to fix the mess".

"Don't expect any free kicks from the lads in the CBD we are going to have to sort this ourselves. Go Kristie!"

Amalgamation 'won't keep rates down'

Alderman Johnston said the council had previously entered into amalgamation discussions between the four metropolitan councils in Greater Hobart, with a report produced by consultants SGS Economics and Planning.

Sue Smith, who was brought in to run Glenorchy after the sacking of aldermen. ( Supplied: Glenorchy Council )

"The report did indicate that there were some serious concerns for an amalgamation involving Glenorchy. There were concerns regarding that the rate increase that would apply if we were to move into an amalgamated model," she said.

She said merging with the Hobart Council would not be enough to keep rates from rising.

The neighbouring Brighton Council announced a 2 per cent rate rise, or $17 a year for all residential households, for 2018-19, in line with the CPI increase.

Following the dismissal of the council in 2017, former Tasmanian MP Sue Smith was installed as commissioner to run operations.

When asked why Ms Smith did not impose a rate rise larger than the 2.3 per cent increase which came into force last year, Alderman Johnston said "that is a question you would have to put to the commissioner".

She added a "thorough understanding" of the true state of Glenorchy council's finances would have only come to light in the "last six to eight months", after the last council budget and the release of the board of inquiry report.

Alderman Johnston said a public meeting about the council's "financial position and proposed budget" would be held at 6:00pm on June 19.

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