A Hunter council could pull off a spectacular budget turnaround worth more than $16.5 million, doing so despite a regulator knocking back attempts to get ratepayers to help foot the bill.
Budget amendments, approved at Wednesday's Cessnock City Council meeting, are forecast to send the council from a forecast $18.3 million operating deficit to a shortfall of $1.79 million.
The turnaround would be achieved without without the sweeping 40 per cent rate increase the council had spent much of the year seeking.
The rate rise was denied in June.
A report to councillors reveals an audit of the council's operating budget has cut costs and lifted revenue enough to all but wipe out the deficit baked into the adopted 2026/27 budget, and does so without any staff redundancies.
The review, triggered by the rate rise denial, found savings in employment costs, council's depreciating assets and a reduction in materials and contract spending boosted by an increase in revenue.
The amendments were not passed without debate with council voting nine to four on their adoption.
Councillor Jessica Jurd was firmly behind the changes, telling the chamber a long-serving former colleague had been "screaming for the last 12 years that we need to look at our budget," and crediting general manager Natalia Cowley with delivering the savings without the mass job losses many ratepayers had feared.
"No jobs getting lost," she said.
"Instead, we're looking at it being fair and saying, hey, we want to keep you in a job, but we need to use some of your leave. I think that is a very good compromise."
Councillor Quintin King, an outspoken opponent of the special variation bid, called the outcome "bittersweet".
He said it was proof, in his view, that the savings had been available all along.
"If someone was willing to work constructively, roll their sleeves up and actually do the work, there [were] things internally we could have done before we stuck our hands out to the ratepayers," he told the meeting.
He said finding $16.5 million in savings "without a single redundancy... is outstanding."
Ward A's James Hawkins questioned whether capping materials and contracts spending at last year's dollar figure amounted to a real-terms cut to road maintenance dressed up as a saving.
"If I want to spend the same amount on groceries this year as I did last year, I have to put less in the basket," he said, warning today's "saving" could show up in five years as accelerated road deterioration and bigger repair bills down the track.
He also raised concerns that the budget's reliance on "active management of employee leave liabilities" amounted to pressuring staff to take leave they otherwise wouldn't.
Cr Hill queried why the report gave little detail on where the $8.46 million materials and contracts cut would actually land, and separately raised a spike in parking and compliance fines behind part of the revenue increase.
He told the chamber ratepayers in his ward increasingly felt it looked like "revenue raising" rather than genuine enforcement.
General manager Natalia Cowley gave council little room to move.
Asked whether the vote could be deferred for further internal consultation, she warned delay would cost the council money it couldn't afford to lose
"Every month of delay is less... potential savings that we can get, and that has an impact on us."
Pressed on the scale of the fix, she was blunt about the maths.
"There's not too many things you've got to do in a financial state once you actually balance a budget," she said.
"[You can] increase revenue... [or] the only thing you can do [otherwise] is reduce costs. That's it."
If councillors rejected the amendments, she said, the cuts would still have to happen, just with less care.
"There will be deeper cuts, even more cuts in materials... it can happen much more savagely than what's been proposed."
Ms Cowley told the chamber the council had been "living beyond its means" for years and had "accumulated over $130 million in deficits" since 2020.
She said the Office of Local Government was watching how council responded to the report, and cast the amendments as the least damaging option on the table.
"This is the most elegant solution without any [downgrading] of... services," she said, warning the alternative was "cannibalising staff and services."
Mayor Daniel Watton said the plan would save jobs and save the organisation.
"It a good outcome and it comes without redundancies, service cuts just good solid work from a strong team," he said.
"The financial state of the council has been blaringly obvious for many years and people have been putting their head in the sand not wanting to talk about it.
"Something has to change to get us back on track we couldn't keep operating in the same way."
The report emphasizes none of the savings required job losses.
"There are no job losses or planned redundancies that have been identified as part of these reductions," it states, and adds the savings are "not expected to adversely impact council's ability to deliver its existing services and programs to the community."
It has been a bruising 18 months for Cessnock council's finances.
The council spent early 2026 pursuing a permanent 39.9 per cent special rate variation, a proposal that would have added roughly $600 a year to the average residential rates bill.
That unsuccessful push was contentious from the start.
The proposal drew 620 submissions and 670 survey responses to the Independent Pricing and Regulatory Tribunal (IPART), the most among NSW councils seeking to lift rates by more than the statewide cap.
An online petition opposing the "excessive" hike attracted almost 5000 signatures.
The tribunal ultimately ruled Cessnock could only lift its general income by the standard 3.8 per cent rate peg this financial year.
The council had argued the increase was needed to stabilise its finances, tackle a growing infrastructure backlog and maintain services amid rising costs and population growth, but the regulator was not persuaded.
Councillors were divided when the result arrived.
Cr Hawkins warned council would be "reducing our services and commitments" and that it would "not be an easy time", while Ward B's Quintin King welcomed the rejection, arguing the increase would have amounted to an unfair tax on a lower socioeconomic area.
Mayor Dan Watton said at the time the IPART determination "does not resolve the serious financial challenges we face as a council".
