Queensland's auditor-general has found Redland City Council had the second lowest current asset sustainability ratio of all South East Queensland councils.
The report, tabled in Parliament on Wednesday last week, revealed the Council at moderate risk of financial instability.
The auditor-general examined the finances of all Queensland local government authorities for the 2021-22 financial year and found 60 per cent were at moderate or high risk of financial instability.
The Redland City Council had the second worst current asset sustainability ratio of all South East Queensland councils at 54.64 per cent, and the worst average asset sustainability ratio of 48.35 per cent which sits below the SEQ average of 65.63 per cent.
The asset sustainability ratio was above its neighbouring Brisbane City counterpart but below that of other nearby councils, including Logan, Scenic Rim and Moreton Bay.
The asset sustainability ratio indicates how councils maintain and replace infrastructure as it reaches the end of its lifespan. The lower the percentage, the more likely that councils have inadequate asset management plans and practices.
Redland City Mayor Karen Williams said local governments such as Redland City need more financial support from other levels of government.
"Currently, more than 80 per cent of the funding needed for the projects and initiatives our Redlands community needs comes from ratepayers, which means they are doing all the heavy lifting in terms of funding capital works and maintaining assets," said Cr Williams.
"It is why we are calling for the reinstatement of Council's previous allocation of the Federal Government's Financial Assistance Grant, which was recently reduced," she said.
The Local Government Association of Queensland has called on the Federal Government to back the funding priorities of Queensland councils.
"As the most financially-constrained level of government, councils need financial sustainability to continue to provide the local roads, infrastructure, disaster resilience and the multitude of great services that every Queenslander deserves," said Local Government Association of Queensland CEO Alison Smith.
"Every Queensland community contributes to the economic and social fabric of this nation and they rightfully expect their communities will be properly supported in return," she said.
Auditor-General Brendan Worrall said councils are still recovering from the financial impacts of COVID-19, which last year saw the deterioration of many councils' financial performances.
"Fewer councils are at a moderate or high risk of not being financially sustainable ... although this is encouraging, 45 councils are still at either a moderate or a high risk of not being financially sustainable," he said.
The auditor-general's report determined that Logan and the Scenic Rim Councils were at lower risk of financial sustainability issues based on current income, expenses, asset investment and debt financing policies.
