Residents in Yass, Murrumbateman and Sutton could face a 76 per cent increase in their council rates, after Yass Valley Council voted to take the measure to public consultation.
The motion passed 5-4 at an extraordinary meeting on Wednesday called to address the council's financial issues. Independent consultants found the council would need to generate an extra $8.3 million from operations each year by 2027-28 to maintain its financial and infrastructure position.
The decision opens a six-week community consultation period, with three financial options to be put to the public. All three would result in a cumulative 76 per cent increase, but would stage the rises differently over the four years.
Mayor Jasmin Jones stressed the vote did not mean the council had decided to approve the rate hike.
"It was a decision to go out to our community for the next six weeks to put our boots on the ground, to get that really robust feedback from our community," she said.
Any special rate variation would ultimately also need approval from the NSW Independent Pricing and Regulatory Tribunal (IPART).
Speaking to ABC Canberra, Cr Jones agreed 76 per cent sounded like "a lot", but said it was "the structural financial correction that is happening across New South Wales right now".
"Yass Valley Council is certainly not alone in the need to go for a special rate variation at least once every 10 years," she said.
She pushed back against suggestions the council had mismanaged its finances, arguing that the rate peg, which allows annual increases of around 3.4 to 3.9 per cent, did not keep pace when material costs skyrocketed during the diesel crisis.
"If every rural council is going for a special rate variation every 10 years, that tells you that there's a structural problem in how councils are funded," she said.
Asked about the decision to invest in a new council building, which has drawn criticism in the community, Cr Jones said it had been necessary.
"The workplace wasn't fit for purpose. We had people's chairs actually falling through the floor, it was beyond redeeming that particular building," she said.
Cr Jones also conceded the council was struggling to keep up with roads maintenance.
"I can totally accept that in terms of roads, that when we say we're going to come and grade that road three times a year and we're struggling to do even once, that they'd be dissatisfied," she said.