Graffiti reported on Saturday on a road sign on David Street was cleaned up on Sunday.
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Horsham Rural City Council mayor Robyn Gulline said the graffiti was a disrespectful act against the community.
"I don't approve of graffiti full stop," Cr Gulline said.
"It's appalling to deface property that does not belong to you."
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Cr Gulline said the use of the swastika was a real problem.
"I do not, in any way, approve or appreciate the use of it in our society," she said.
"The fact that the person who graffitied it thought it was a good idea, is a problem. It's pretty sad."
Cr Gulline believed the insinuation of the symbol was offensive.
"It's what that symbol throughout our society has come to represent that makes it abhorrent," she said.
A Horsham Rural City Council spokesperson clarified the graffitied road sign was under the responsibility of Regional Roads Victoria.
"If residents need to report graffiti or any service issue in a municipal place, it can be done by leaving a service request online (including after hours)," the spokesperson said.
"When a service request is lodged, residents are able to track the progress of the request and they are notified when it is resolved."
Department of Transport's regional director Grampians Michael Bailey said this type of graffiti was unacceptable.
"We encourage the community to report graffiti or any other damage to transport infrastructure to us by calling 133 778," he said.
Graffiti removal is carried out on a regular basis by Regional Roads Victoria's maintenance teams, who carry out periodic inspections of the arterial road network.
These inspections include examining roadside signage for any form of damage, including graffiti.
RRV prioritise the removal of highly offensive or obscene graffiti from high-visibility areas.
Cr Gulline asked people to be mindful of others and to be respectful and expressed sympathy to the Horsham resident who reported the graffiti.
"No matter who you are, you have to be mindful of what you say and do because you don't know the impact of your actions and words on others," she said.
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