Mr Sharp said they would be seeking further funds from the council to support the club, with the council likely to put the request into its deliberations on the 2018-28 long-term plan.
The lease has been rolled over on a month-by-month basis since it expired in July this year.
A submission prepared for the club by lawyer Kate Barry-Piceno was supported by 107 signatures taken from people at the beach on Sunday, November 20.
The suggestion of a targeted rate was well received by Mount/Papamoa Ward councillor Steve Morris. "You have my support in that."
Mr Sharp responded to a submission from a couple neighbouring the club who complained about the noise and disturbance caused by groups who had nothing to do with surf lifesaving hiring the bunkhouse.
Denis and Sally McMahon said that when they realised the new lease proposed to legitimise hiring the club to non-surf lifesaving groups, they were dumbstruck.
"How can the council possibly believe it can legalise something through a lease which is in direct contravention of the Resource Consent," they wrote.
They McMahons stressed to councillors yesterday that they fully supported the club being on that site, saying it had every right to be there.
The hiring of the bunkhouse to groups not associated with surf lifesaving had been justified by the ongoing funding challenges facing the club.
Mr Sharp reassured the McMahons that the club had addressed their complaint. "It will not happen again."
He said hirers of the bunk room must in future be related to surf club activities.
Another resident who had lived behind the club for 23 years, barrister and solicitor Richard Charters, joined the McMahons in raising legal issues, including an accusation that the council and the club had not complied with court orders made in respect of parking in front of 85D and 87 Oceanbeach Rd.
The council was proposing to go into public excluded yesterday to be briefed on legal issues between the council and the McMahons.
Mr McMahon explained it was more to do with the legal situation rather than anything directly related to renewing the club's lease.
Ms Barry-Piceno was concerned about he possibility of the confidential information creating a "conscious bias or otherwise" in the council.
Mayor Greg Brownless then called for the afternoon tea break. Afterwards he announced that the McMahons had withdrawn taking the item in confidential, and the lease application would be left to lie on the table to allow more time for negotiations with various parties.