Councillors will consider exhibiting three funding options to establish how much ratepayers are willing to pay for council services.

The Newcastle Herald has previously reported that the council faces a budget black hole and slashed services unless it can secure a rate rise above the 3.2per cent state limit.

Councillors will consider the three seven-year funding plans tonight and may put them to the public for comment.

The proposals include a basic rate rise and reduced services, an increase to maintain works, and a bigger rates bill to finance service upgrades.

Residential ratepayers would face a minimum average rise of $30.60 a year for seven years under the cheapest option, which is in line with the rate peg. But that course of action would also mean cutting $112million from the council’s operations and more than 120 jobs.

Maintaining services would mean an average extra $73.56 a year for residents and $326.17 for businesses, while $92.89 for households and $421.34 in business could finance increased services.

Lake Macquarie City Council corporate services director Wayne Jack said rising costs and state government cost-shifting had bitten into council funds too hard to be absorbed without lifting rates by more than the 3per cent pegged rate.

‘‘Results from the first stage of community consultation have shown us ... they would be willing to pay to see current services and assets maintained or improved, as long as a potential rate increase was not unreasonable,’’ Mr Jack said.

‘‘We will continue to work with the community to deliver services that are important to them and in line with what they are prepared to pay.’’