TWEED Shire councillors met at an extraordinary meeting on Tuesday to decide on the content of a submission to a newly-instituted independent NSW local government review panel.

The council decided on a number of options including changes to boundaries that would result in Ocean Shores, Billinudgel and the Marshalls Creek hinterland becoming part of the Tweed Shire Council area.

Mayor Barry Longland said changes to boundaries would be controversial by smaller councils, but as all councils were asked to provide a submission, Byron Shire Council would have the opportunity to present its case.

One of the most important issues facing councils was rate pegging, which only took place in NSW, according to Cr Longland.

He said rate pegging made framing a budget difficult as councils only had control of one side of the budget, the expenditure side and had little or no control over the revenue side of the budget.

"Rate pegging severely inhibits council in its efforts to tailor its service delivery to meet the needs of the community," Cr Longland said.

The review panel was created to look into ways to improve the strength and effectiveness of local government in NSW and has reached its first stage during which it investigates and explores ideas submitted by NSW councils.

Stage two will look at options for change, stage three will look at what can work and where and in stage four the panel will make recommendations to the NSW government.

Tweed council's submission will form the basis of a presentation by the council at a panel meeting held on Monday at Ballina.

The council will have a five-minute window to provide its viewpoints and last Tuesday considered a report that framed its position and will be presented at the panel meeting by the mayor and general manager.

The council's submission attempted to answer questions such as what the best aspects of local government in its current form were, what challenges the community would have to meet over the next 25 years and what top five changes should be made to local government to help meet the community's future challenges.