In "a very difficult decision for everyone", rate rises of 18 per cent per year for the next three years were signed off by the Queanbeyan-Palerang council on Wednesday night.
Burdened with a significant financial deficit, the elected council heard that unless it addressed that issue in an expedient manner, it faced the very real prospect of the council being sacked and the shire again placed under administration.
The major rate rise was flagged late last year. Without the hike, Mayor Kendrick Winchester said residents of Queanbeyan, Bungendore and Braidwood faced the prospect of paid parking, pools closing, libraries closing, the Q theatre being sold off, and reduced mowing and maintenance.
In presenting the motion to adopt the rate rise on Wednesday, councillor Bryce Wilson said the council "took an oath to take the financial sustainability of this council forward".
"This is a very difficult decision for everyone," he said.
"It's not an option to have a council that is not [financially] solvent and financially sustainable and if we did anything less, quite frankly, we would be put into administration, the administrator would arrive and just go for it [raise the rates], without any ... elected representative input into that.
"The truth is we are in a structural deficit; we were hamstrung by the merger [of the Queanbeyan and Palerang shire councils]."
However, he pointed out that even with the new increases applied, on a like-for-like basis Queanbeyan-Palerang rates were still significantly below those of neighbouring Canberra and similar major regional centres such as Albury.
Both the City of Queanbeyan and the Palerang shire councils were forcibly merged in May 2016 by the NSW government when neither were in a financially sustainable position.
Councillor Winchester said that NSW legislation prevented the merged council from increasing its income beyond the rate peg, and from making critical decisions to reduce its expenses, such as consolidating its offices and staff. Rate rises were not permitted for four years after the merger, the mayor said.
The NSW government sets a so-called rate peg, which is the maximum amount a council can raise rates by each year but councils can apply to have to increase the general rate beyond this.
The Independent Pricing and Regulatory Tribunal NSW says the purpose of the rate peg is to protect ratepayers from excessive increases.
However, the contentious rate rise also comes at a time when the council is spending $74 million on an arts and cultural precinct half funded by the NSW government.
In June last year, the council applied for and received a variation to raise rates above the peg which generated an extra $1 million in revenue but external cost increases fast outstripped general revenue.
The council's general fund is now in deficit of $8.3 million after the impacts wrought by repairs after the Black Summer bushfires and floods. Disaster recovery grants from the NSW government are still to be received.
There is also a dedicated funding commitment to a number of major projects, including the Bungendore and regional sport complex and the rollout of an integrated water cycle management plan for places such Bungendore, Braidwood and Captains Flat.
The rate increase will come into effect on 1 July this year.
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