An alleged sexual assault in Blaxland last month might have been captured on camera - if CCTV was working.
Ward 4 councillor, Brendan Christie, said it was "unacceptable and disappointing" that cameras were not functioning in the area and it undermined the efforts of police.
He was concerned that community safety might be "falling through the cracks".
"CCTV cameras play an important role, not because they're watching the community but because they're a deterrent for criminal behaviour," he said.
"And importantly, where that behaviour does occur, CCTV supports the efforts of our hard-working police.
"News that local cameras aren't working undermine these important outcomes.
"It's critical local businesses are supported in the installation and maintenance, preferably by local security experts, to ensure when it's installed it actually works."
The cameras were installed in Blaxland in 2015 following an election commitment by then Macquarie MP, Louise Markus.
They were funded by a safer streets grant. A department of home affairs spokeswoman said: "Grantees such as local councils are responsible for the delivery of projects and ongoing maintenance costs, as is appropriate for local security infrastructure projects."
The Gazette revealed earlier this year that cameras at Blaxland, Springwood and Wentworth Falls were not working after the issue was raised at a federal election forum.
Blaxland chamber of commerce president, Jo Bromilow, said the installer is being legally pursued.
"We're doing our utmost to rectify this as soon as possible," she said.
Macquarie MP, Susan Templeman, said there were problems with CCTVs for a variety of reasons.
"It raises a broader question about who should be responsible for installing, monitoring and maintaining CCTV systems in public places," she said.
"If the purpose of CCTV is for the public's protection, then there needs to be a collaborative approach with council and police, and contracts have to include funding for ongoing maintenance.
"It's really not good enough for governments to offer a splash of cash and then wash their hands of any ongoing problems. They must hold contractors to account."
Blue Mountains mayor, Mark Greenhill, said: "Over the last two elections, I have watched federal government aligned candidates across the nation making CCTV announcements. They have been thrown around like confetti.
"I am sure mayors across the country would join me in asking if this program is working as well as it could."