WHITSUNDAY mayor Jennifer Whitney told yesterday's ordinary council meeting that Council was insolvent and an administrator could be called in.

Cr Whitney said that since discovering the multi-million dollar unfunded liabilities and crippling bill for an ambitious program of capital works, Council's books had been opened to a number of government organisations including the Queensland Audit Office (QAO).

Council's recent application for loan borrowings also triggered a credit review by the Queensland Treasury Corporation (QTC).

Cr Whitney said yesterday that the audit office would not sign off on Council's financial statements from 2011-12 "because we are in a position where we are unable to trade further".

She said Council was waiting on a letter from QTC to confirm the advancement of funding that would allow it to carry on. She said this was no longer a loan, but "emergent funding".

"This is really, really, dire stuff. It is real. I'm not making it up," she said.

"Our CEO dreams numbers at night because he's been thrown and locked into a corner to get us out of this predicament and there is no way out."

Cr Whitney said ratepayers would not be spared from the effects. She said the overall debt was expected to reach almost $100 million and with a population of just over 33,000 and a rate base of just over 17,000, "you don't need to be Einstein to read those figures".

"All of us need to start saving up more dollars because our rates will increase - have to increase," she said.

"[An] Administrator, if we don't agree to these terms, will come in and will manage it without any input from the community. There will be no thinking of pensioners or anything like that."

Cr Whitney spoke about when council's biggest budget to date was handed down last August.

"We brought down a budget which has made all of us sitting around this table look like fools - and management did that to us," she said.

Cr Kevin Collins said the community had two choices.

"Either the community gets behind us and trusts us to do the right thing or they send in the hounds."