But acting general manager Brendan Hollands said it was "justifiable" and would only make up for the usual 2.5 per cent rise the council was expecting anyway.

At Tuesday night's meeting, councillors unanimously endorsed his recommendation to apply to the Independent Pricing and Regulatory Tribunal (IPART) for a "one-off" 2.5pc increase in the amount of general rates it could collect.

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It will mean an extra $24 to $31 for residential and rural residential ratepayers and $51 more for those on farmland.

The move came after IPART last December announced that Goulburn Mulwaree could only raise an extra 0.7pc, or about $220,000, in rates in 2022/23.

For the first time, IPART factored population growth into the rate peg, but many councils were left shocked by the decision. They have traditionally factored in a 2.5pc peg but Goulburn Mulwaree's population growth rate was assessed as "negligible."

Mr Hollands described IPART's ruling as a "backwards looking calculation" that did not reflect current and future costs. It was also the lowest rate peg in 20 years and "less than half the previous record low."

"We've seen an incredible increase in just fuel and construction costs in the past six months," he said.

If applied, the 0.7pc would decrease the council's general rate revenue by $322,000 in 2022/23 and result in a cumulative $1.36 million reduction over the four-year operational plan. Over 10 years, it would reduce revenue by $3.68m.

"Without the additional 1.8pc...there is a gap in our funding that will require the council to review its budget over the next 12 months in terms of both proposed capital works and service levels in all areas," Mr Hollands said.

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Moreover, it was facing additional costs in technology ($200,000), cyber security measures ($50,000), insurances ($70,000) and a 2.25pc staff pay rise in 2022/23.

Concerted lobbying by Local Government NSW, Regional Cities and Joint Organisations resulted in state government intervention. Now, the government is reviewing the methodology and IPART is allowing councils to apply for a special rate variation.

Goulburn Mulwaree will apply for the full 2.5pc rate peg. Mr Hollands said if granted as usual last November, "no-one would have batted an eyelid." Now, councils had to "jump through some hoops" to reclaim it.

"I hope there's not too much negative (public) reception because everything we've done in the past five years has assumed a 2.5pc increase. So it is really only getting it back to where last year's budget said it should be," he said.

He expected many other councils who received the 0.7pc increase would also apply for a variation. Whether they received it was another matter.

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A decision isn't expected until June 21. However, the council wants its budget adopted by that stage. Mr Hollands said it was potentially confusing to publicly exhibit two sets of charges, one assuming the 0.7pc and the other 2.5pc, before the document's adoption. He hoped for a speedier response from IPART.

IPART will undertake community consultation on the application before making a decision.

Mayor Peter Walker said it iwas mportant people understood that the council was not trying to recoup revenue for projects such as the Goulburn Performing Arts Centre or (GPAC) Aquatic Centre upgrade.

"It's not what it's about," he said.

"This is about moving forward and allowing us to keep doing things and growing. If we went with the 0.7pc we'd have to go back and make cuts on things the community expect over the next three to four years. We don't want to do that."

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Also on Tuesday, councillors agreed to sign an $8,280,000 loan agreement with TCorp. It comprises $2m for the GPAC, $2m for the council's contribution to the Towrang Bridge's replacement and $4.28m for the Goulburn waste management centre's upgrade.

Mr Hollands was awaiting a final interest rate on the 15-year fixed term loan but said it was typically about 3.42pc.

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