The club, established in 1965 and mainly made up of junior members, asked council in February if it would offer it a reduced lane hire fee at the Aqualife Centre.
In a report by the Town’s Community Life director Tina Ackerman, she said the club was not sustainable without financial support.
She said if the Town wanted to retain the club at Aqualife, with its long history and the benefits it provided to young swimmers, it would need to continue to charge reduced fees or consider alternative sponsorship.
Ms Ackerman said a sponsorship option, which would be the Town’s first arrangement of this nature, was transparent for all parties but would need to be subject to certain conditions.
These include the club entering into a Memorandum of Understanding with the Town, that sponsorship funds pay for charges incurred at Aqualife, the provision of an annual report and audited financial statement to the Town.