Catherine Hill Bay Progress Association says Lake Macquarie City Council has misunderstood its proposal to have the historic mining town's jetty included in an existing heritage curtilage.
The council unanimously voted to defer providing a letter of support to the proposal on Monday, citing a need for more information, consideration of "wider impacts" and consultation with relevant stakeholders.
The association's request came after it received advice from the Office of Environment and Heritage that applying to include the jetty within the township's existing curtilage was the best way of achieving heritage listing.
Association president Sue Whyte, who expressed her surprise at the decision given council wrote a similar letter for an interim heritage order last year, said councillors had "misunderstood" the plan.
"They're so terrified that they're going to get lumbered with having to maintain the jetty," she said of the council.
"That's never been the case with us. We understand that and we agree with it.
"We're looking for a better pathway into the heritage office and that was [OEH's] recommendation."
Multiple councillors said during Monday's meeting they were not against heritage listing in deferring their support, but Ms Whyte said some councillors "did not value heritage" and some viewed it "as a constrain".
Regardless, she said the association would meet with whoever necessary to explain the proposal.
"It doesn't mean we're stopping there," she said.
"We will meet with those people who didn't support it and explain to them what they're being asked and it can be presented at another council meeting."
Ms Whyte said the association wanted to secure heritage status to explore adaptive re-use of the 240-metre coal loader. She said Balls Head Coal Loader in Waverton, where ships loaded from Catherine Hill Bay used to dock at, had been revitalised and was an example of what could be achieved.
But she said it would be a significant setback if council did not support the plan.
"[The jetty] used to be under a lease by a mining company but that lease has not been renewed because it ran out," she said.
"Now the state government has control of the jetty and will make a decision what happens to it."
Delta Coal said on Tuesday it had not taken up a lease which included the jetty when it acquired Chain Valley Colliery earlier this year. The lease remained with the administrator of former colliery owner Lake Coal.
A rehabilitation bond for the jetty, worth $3.5 million, remains with the government.
"The Catherine Hill Bay jetty is currently under a mining lease, and obligations under that lease mean title holder is financially responsible for any rehabilitation or maintenance work," Department of Planning, Industry and Environment spokesperson said.
"Any plans for the jetty would need to be negotiated with relevant stakeholders by the titleholder and would be subject to local planning and other government approvals.
"The NSW Resources Regulator holds a rehabilitation security bond for the jetty to be used in the event of unforeseen foreclosure or if the title holder defaults on their responsibilities under its mining lease."