THE Independent Pricing and Regulatory Tribunal (IPART) has approved Muswellbrook Shire Council's application to increase general income above the 2.7 per cent rate peg from July 1.
Local ratepayers face a $21 increase in 2019-20 if council proceeds to implement the approved change.
The rise also includes the 2.7% rate peg.
IPART chair Dr Paul Paterson said special variations gave councils flexibility to generate additional income above the rate peg to meet specific needs.
Applications are independently assessed by IPART taking into account submissions received directly from stakeholders.
"In making these assessments, we have considered whether there is a genuine financial need for additional revenue for a council to be financially sustainable, and to fund future infrastructure projects or asset renewal requirements in their regions," Dr Paterson said.
"We also look at efforts made by the various councils to reduce their costs and identify other sources of revenue, as well as the capacity and willingness of ratepayers to pay the requested increase.
"Muswellbrook Shire Council met the special variation criteria set out in the Office of Local Government (OLG) guidelines."
Through the rate peg and special variation process, IPART determines the allowable increases to councils' general income.
Councils decide whether to implement the increase and how it is allocated among different ratepayer categories, such as residential or business.
From 13 applications throughout the state, eight were approved in full, three were partially approved and two - Port Stephens and Tamworth - were declined.
Muswellbrook Shire Council
MUSWELLBROOK Shire Council's application for a permanent 15.13 per cent single year increase has been approved.
The approval replaces a temporary special variation of 12.43 per cent, which expires on June 30, 2019.
That temporary variation was granted last year in place of the permanent variation requested by council as it failed at that time to meet one of the OLG criteria.
The criteria were met for 2019-20.
The additional revenue will be used to fund operating and capital expenditure for the council's key assets such as local roads and drains, maintain service levels at acceptable standards, improve stormwater infrastructure, fund the Job Creation program, and continue development of the Olympic Park Precinct and Regional Entertainment and Conference Centre.
IPART received five submissions opposing the increase, citing concerns around the council's financial management, affordability for ratepayers and transparency of consultation.
Dr Paterson said the council largely demonstrated its need for the additional revenue above the rate peg to implement its proposed projects while remaining financially sustainable, and that the impact on ratepayers of the proposed rate increase would be reasonable.
"The council's consultation ensured the community was largely aware of the purpose of, and need for, the proposed special variation, and it undertook sufficient planning and exhibition in relation to its Integrated Planning and Reporting documents to allow IPART to approve the proposed rate increase," he said.
"Based on the council's application, the average residential rate will increase by $21 in 2019-20, while the average business rate will rise by $76.
"Because this approval replaces a temporary increase that is expiring, ratepayers will experience an increase of around 2.7 per cent rather than the full 15.13 per cent."
The full reports on all of the councils' applications are available at www.ipart.nsw.gov.au