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Homeowners in Clarence and Kēkerengū began petitioning to split from the Kaikōura District Council last month after a new report warned the region's 3000 ratepayers would struggle to pay off damage from the 2016 earthquake.
District council chief executive Angela Oosthuizen has said the council would not look at amalgamation or a boundary change as part of an upcoming review of its operations.
She said residents were "well within their rights" to seek a boundary reorganisation through the commission.
The commission is an independent body that makes decisions on local body electoral representation.
East Coast Community Organisation secretary Chris Wilson said residents were looking at asking the commission to amalgamate Kaikōura back into the Marlborough district.
"That's our preference. It's easy, it's tidy, and it's more sustainable for Kaikōura ratepayers as well," Mr Wilson said.
"If it's not possible, we will seek, through the Local Government Commission, a boundary change, such that the area north of Ōhau Point becomes part of Marlborough."
Mr Wilson said ECCO was concerned the council review group had limited themselves to "the status quo" by not considering amalgamation or a boundary change as options.
Mr Wilson and Kaikōura district councillor Derrick Millton, a Clarence resident, renewed efforts to have homes north of Ohau Point rezoned as Marlborough after concerns the district was not and would never become sustainable.
A report, published in October, said the council's existing operation model was unsustainable, that the district needed up to $10 million from the Crown to stay afloat, and that the council was at "risk of implosion" if it did not make changes.
The earthquake had cost the district between $3 billion and $8 billion. The council agreed to continue developing a new operating model, which would replace its existing model, at a council meeting last month. No alternative options were considered.
"To have a study and only have one option is limited," Mr Wilson said.
Mr Millton said the council's decision to not include amalgamation or a boundary change as part of its sustainability review prompted residents to consider other ways forward.
"We already have a good idea through meetings [with the Kaikōura community] that there's a very strong movement to change the boundary, even if there's no opportunity to include it in the report," he said.
"We've got to go step by step. This is not just two people wanting to redraw the line, this is a whole lot of ratepayers saying, 'Can you help us?'"
"Any endeavour to reorganise the boundary of a local territorial authority must go through a process set out under the Local Government Act," Ms Oosthuizen said.
- Local Democracy Reporting is a public interest news service supported by RNZ, the Newspaper Publishers' Association and NZ on Air.