Cessnock City council has a "hard road" ahead that may include cuts to services after its bid for a 40 per cent rate rise was denied, councillors say.
Councillors expressed mixed feelings on Wednesday, a day after the Independent Pricing and Regulatory Tribunal (IPART) ruled Cessnock City Council could not exceed its rates by more than the 3.8 per cent limit next financial year.
Had it been approved, the rate rise the council sought would have added $600 a year to the average residential rates bill, rising from $1503 to $2103.
Ward C councillor Mitchell Lea said he was shocked to hear the decision via social media.
"From there I guess it is mixed feelings," he said.
"Obviously there are a lot of people happy not to have to pay any additional money on their rates, but you will also struggle to find a person in the LGA who is happy with the state roads, for example.
"It now means we do not have the funds available to spend on things we want to do, like getting those roads up to standard."
Cr Lea said the council had already been working on cost management measures, but the IPART decision would create a deficit in funding that would lead to some bigger cuts.
"We have out new general manager coming in at the end of the month and they will obviously have their own vision and ideas with how the council should move forward," he said.
Last month Natalia Cowley was announced for that role after leading a number of councils through their own financial recoveries.
Cr Lea said that council's delivery program is now out for exhibition, detailing plans both with and without the rate rise.
The exhibition period runs until June 17.
"You will be able to see what won't be able to be done in terms of works and infrastructure," he said.
"Feedback from the public will help guide me to see how they feel about that draft plan or the delivery program."
Cr Lea said it was important to build trust within the community when hard decisions are being made in the chamber.
"We should always be working to keep the trust of ratepayers," he said.
"That's the attitude I had going in to my first term in council, the day I don't have that attitude will be the time to step aside."
Cr Lea said the bid for a rate rise was not made lightly and had been supported by research.
"It wasn't just done on a whim, there was research and data behind it," he said.
Ward A councillor James Hawkins said council always had a contingency plan if the variation was rejected, but it was not going to be easy.
"We will be reducing out services and commitments we can keep," he said
"We still have growth projections for our city and population and that brings with it increasing costs.
"It is not going to be an easy time for us, but we have never shied away from a challenge.
"Council is a big, robust organisation and life goes on."
Ward B councillor Quintin King said he was glad to hear the request had been rejected.
"It is a win for our ratepayers," he said.
"In my view it would have been an unfair tax on an already lower socioeconomic area under the cost of living everyone is facing.
"It would have just been to much of an unfair burden."
Cr King said it would test the new general manager's leadership to find a different path forward to make sure the council is financially sustainable.
"I have no illusions, there is a big task ahead of us and we need to find a new way forward," he said.
"I think it is much more appropriate for council to look at different avenues and maybe push back against state and federal government a little bit with costs shifting to us."
Cr King said the community may have been open to a more staged approach to rate rises.
"It was such a large increase in a single year and it would be permanent," he said.
"I think we could have done better at explaining what the situation was and where to the money was going towards, and then stage that approach a little bit better.
"We might have had a bit more success."
He said maintaining trust with the community was important.
"Local council is always at the forefront, facing the community directly, it is really easy to lose community trust," he said.
"It is going to be a hard road moving forward, but it is worth it in the end if we save our ratepayers."
