Hamilton City Council has rejected Waikato District Council's renewed offer of $250,000 for Waikato residents to use Hamilton libraries.
HCC is sticking to its position that it wants $300,000 to allow WDC residents to use its library services.
However, Hamilton councillor Paula Southgate has suggested that HCC may be using the library issue as a bargaining chip for a wider conversation around future boundary changes.
In August, Waikato residents were informed that they would lose free use of Hamilton libraries, despite some residents living closer to HCC's Hillcrest library than WDC's Cambridge library.
Waikato District Council said it was not feasible to continue paying the $300,000 a year charged by HCC.
Active members of the HCC library who live in areas most affected have been offered a voucher for the cost of one individual membership per household for a year. However, if a deal is not struck with HCC by then, it would cost Waikato residents $80 a year to use Hamilton libraries.
Despite rejecting the deal, HCC and WDC will hold further discussions aimed at finding an agreed approach by both councils within he wider central Waikato growth context, including cross-boundary shared services, and a joint approach to planning and managing growth.
Councillor Southgate told Hamilton News the rejected money could have been used to help Hamilton ratepayers.
"We have now turned down $250,000 of revenue which does hit all ratepayers as now we need to reduce services somewhere to meet that gap.
Revenue also affects debt levels and our ability to borrow," Ms Southgate said.
She said that the council debate focused on using the library services as a bargaining chip, in a wider conversation about boundary changes, and that Waikato library users were falling victim to the debate.
"I know the voucher system is hopeless, hard on users and staff.
"We should remember that Tamahere and Raglan residents not only use a library, they own businesses and employ staff in Hamilton, they shop here, eat here and go to schools here. So they do have some positive impact on our economy," Ms Southgate said.
Waikato District deputy mayor Dynes Fulton told Hamilton News he was concerned about the library being included in the cross boundary debate, calling it not relevant.
"It concerned me that the decision by HCC to reject the libraries offer, while further work is presently being developed does not appear encouraging," Mr Fulton said.
"I do find it interesting to note that very recently the HCC has emphasised and acknowledged the number of strategic, practical and even political challenges to both councils, saying it needs working collaboratively with WDC to resolve these issues in an integrated manner.
"For the benefit of all the residents affected by this library decision, I hope a resolution encompassing the bigger picture may be achieved in the near future that provides the benefits ratepayers expect from council services."
More than 5000 submissions were made from Waikato residents on the HCC Library contract during WDC's 10-year plan process; included were families whose children attend Hillcrest High School and frequently use the Hillcrest library, one minute from their school."