Ku-ring-gai Council earlier in May voted to go to court over the government's signature plan to deliver more housing through higher-density development within 400 metres of train stations.
Before that it had resolved to place full-page newspaper ads attacking the policy.
The ads urged residents to "wake up" to the implications of the housing plans, which cover parts of Sydney, Newcastle, Wollongong and the Central Coast.
Mayor Sam Ngai declined to tell an inquiry into the development program how much ratepayer money was being spent on the ads attacking it, saying it was commercial-in-confidence.
"It's within reason ... we would obviously not do this unless it was a reasonable amount," he said on Monday.
Labor MP and committee member Anthony D'Adam said the inquiry had the power to compel evidence, while chair Sue Higginson told the mayor he could take the question on notice to provide answers at a later date.
Ratepayers are also funding the legal action.
"That might not have been necessary had we been given 12 months of deferred commencement like other councils," Mr Ngai said.
Inner West Council has been given a deferred commencement to the policy, which began in some other areas in April.
Mayor Darcy Byrne earlier on Monday told the inquiry the council was committed to working with the government.
"But we believe that we can deliver new homes through local planning controls rather than imposition from above," Mr Byrne said.
The council would vote on completing its local environment plan and submitting it to the government by the end of 2024 at a meeting on Tuesday.
Councils willing to take responsibility for addressing the housing supply crisis and delivering more homes should have the chance to collaborate with the state government rather than having plans imposed upon them, he said.
Opposition housing spokesman Scott Farlow said the Inner West was not alone.
"I think every council has said that," he said.
Mr Ngai said he wants his council to play its part in delivering new homes, but has not seen genuine collaboration from the state government, telling the inquiry it was not true Ku-ring-gai had refused to play ball.
Following the news that Ku-ring-gai would challenge the planning policy in court, Premier Chris Minns said other councils had already achieved good outcomes by negotiating with the government to deliver more housing.
Ku-ring-gai is the third-most advantaged local government area in the nation, according to the Australian Bureau of Statistics, and the highest ranked of the councils targeted in NSW for increased density.
The inquiry resumes public hearings in June.
