THE Myrtleford Caravan Park is gearing up to apply for a three-star RACV rating.

Alpine Shire Council took over the running of the park in November 2007 after it was unable to find a suitable operator.

An assessment of the park’s condition in February labelled it as suffering from "severe neglect", and council developed a business plan to optimise revenue.

Losses for the 2007/08 financial year were projected at around $79,000 due to the amount of capital works required to bring the park to standard.

Park manager, Jim Bates, said council originally set out to run the park for 12 months.

"Our contract has been extended to April with the aim to apply for this rating and build the park into a viable business," he said.

Mr Bates said the park was currently relying on word of mouth to increase visitation.

"We’re urging locals to encourage visitors to stay here," he said.

Council has undertaken a number of improvements to the park in a bid to qualify for a rating and make the business profitable.

A recent grant of more than $60,000 under the State Government’s Crown Land Caravan Parks Improvement Program was matched by the shire for a $132,000 injection of funds.