Dubbo Regional Council (DRC) has received approval to lift rates beyond a limit that was announced late last year.
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The Independent Pricing and Regulatory Tribunal (IPART) had set a rate peg limit of 0.7 per cent but the DRC applied to to implement a rate increase of 2.3 per cent across the local government area.
Council announced on Monday afternoon the application had been successful.
"I commend IPART for reconsidering its original proposed rate peg increase of 0.7 per cent," mayor Mathew Dickerson said.
"Many councils did not anticipate such a low rate peg, and therefore cuts to service delivery would have been on the agenda. Dubbo Regional Council will now table the 2.3 per cent rate peg at the Extraordinary Budget Meeting that will be held prior to June 30."
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The extra 1.6 per cent equates to approximately $640,000 for the 2022/2023 financial year, and it is proposed this extra revenue will go towards roads maintenance.
"We know through community feedback that roads is an area of high focus for residents, so this money will help ease the burden on a strained financial position," Clr Dickerson said.
Speaking last month, councillor Joshua Black said it was important community rate payers understood the 2.3 per cent rate rise is what "keeps the lights on and the potholes filled in" while Cr Pamella Wells supported the move to use the funds to maintain roads.
"I welcome the additional funds for roads, given the weather systems we've had over the past 12 months, this is a great thing to see," she said.
The DRC is one of 86 councils which made a successful application to IPART to increase its rate revenue.
Bathurst Regional Council will be allowed to lift its rates by 2.5 per cent after initially having a peg limit of 0.9 per cent, as will Orange City Council (whose rate peg had been 0.7pc).
All council applications had to show they had budgeted for higher income than that provided by the rate peg and they needed the additional money to deliver on the projects they have already planned and included in their budgets.