PORT Fairy Folk Festival could receive a windfall worth thousands if Moyne Shire councillors support covering costs of hiring two council-owned venues.
Councillors will vote on the $32,000 yearly sponsorship package at Tuesday's council meeting, after the festival's committee raised concerns about the "ongoing viability" of the event.
The sponsorship would cover the use of Southcombe Park and the Reardon Theatre, including rent and ground repair costs, but require the council be "appropriately recognised" for the support.
The festival committee has also requested the council simplify organisation by appointing a senior officer to work as an event liaison.
The council currently provides at least $105,000 per year of in-kind support for the festival, while the festival stated it contributed $10 million to the south-west economy each year.
Mayor Mick Wolfe said he would likely vote to support the festival windfall and believed the funding was necessary.
"Their ticket numbers have declined, they have had to cut their costs and find efficiencies," Cr Wolfe said.
"It's such a big and dynamic event, it is of benefit for every township. The business, the fuel, the food, the accommodation. I don't see it as a Port Fairy-centric thing."
The festival's committee president John Young said the festival, which this year hosted its 42nd event, had faced increased competition and costs.
"We bring in a lot of contractors to do the big marquees, and compliance costs ... the fees for artists, all that goes up, we have tried deliberately to keep our ticket levels at a low level," he said.
Mr Young said high accommodation costs and an aging patron and volunteer base were also concerns for the festival.
"We are really keen to build a working partnership with council. Not just in costs and outgoings (but) managing all the permit and compliance issues so we can work together to make sure that is streamlined," he said.
"We would certainly acknowledge the council in maintaining the festival and helping it to thrive."
The festival also requested that the council reduce camping fees at Southcombe and Gardens caravan parks, but a council report said the current fees should be maintained to ensure fair competition.
Cr Wolfe said he believed the council caravan parks were fairly priced compared to private rental accommodation during the festival.
"When you look at houses being rented for several thousand dollars for the weekend, it's obviously having some impact but it's beyond our control," he said.
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