Byron Council is expected to decide at its meeting on February 8 whether it will pursue an order to close down Gerry Harvey's Byron at Byron resort for operating illegally.
The council says the resort is taking guests even though a certificate of occupancy has not been issued.
The council has issued Byron at Byron a notice of a proposed order to cease operating with the resort given seven days to respond.
Senior council officers inspected the resort with resort representatives, including a private certifier, last Friday and are preparing a report for councillors.
Of primary concern to the council is the operation of the Land and Environment Court-approved on-site sewage treatment system.
Byron Mayor, Cr Jan Barham, said she understood the on-site treatment plant was operating with treated effluent being taken by tanker to the council's Ocean Shores treatment plant.
Cr Barham said this was at odds with the council's policy of no pump-outs from on-site systems and it was a matter that had to be investigated.
The council's planning director, Ray Darney, said the council officers who inspected the site were looking at the level of compliance and whether the development had been completed.
Mr Darney said the council had to approve the sewage treatment system before the resort's private certifier could "sign off" on the development.
He said the council had not approved the system and believed it should not be operating.
Effluent from the site was being taken in tankers by the council's contractors to the council's treatment plant at Ocean Shores, he said.
Mr Darney said he didn't believe Byron at Byron had approval to have effluent carried from the site, "but whether they do (need approval) is another matter".
"It's a matter that hasn't been resolved," he said.
Mr Darney said even when the on-site system was given the go-ahead, effluent would not be immediately disposed of on site.
He said it would still have to be taken to a council treatment plant for a time as part of an effluent testing process.
Effluent could not be put into the ground until it had reached a certain standard, he said.
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