Council is applying for a permanent additional special rate variation of 2.5 per cent to ensure continued financial sustainability and to deliver a budget in line with what was planned in the Delivery Program and Operating Plan 2021-25.

The decision was made at Wednesday night's council meeting, at which time director of Corporate Services and Finance, Aaron Jones, explained what the impact would be on most residents.

"The 2.5 per cent, on an average rate, equates to just under $40 per year per ratepayer," he said.

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Council had planned and developed the budget for the 2022-23 financial year on a rate peg increase of 2.5 per cent, with a growth factor of 1.3 per cent in line with advice from IPART.

However, the rate peg was limited to 0.7 per cent by IPART, plus a 0.2 per cent increase for population growth, resulting in a budgeted income loss of almost $500,000 for the financial year.

Speaking to the Western Advocate, council's general manager David Sherley said the rising costs being imposed on the council made it necessary to increase rates to be able to maintain service levels.

"All the councils in NSW have raised concerns with the government that IPART's review for the 2022-23 year was unreasonable and would not allow councils to even maintain basic services at their current levels," he said.

"The councils have been talking with the state government and, in response, it has provided advice and a process to seek an additional special variation of the rates for the 2022-23 year only and this is a welcomed initiative by the state government to allow us to at least try to match inflationary costs."

IPART will assess Bathurst council's application and put it on public exhibition to allow feedback before it makes a determination.

Council will also include the proposal to increase rates in its draft budget, which will be put on exhibition in the coming months, allowing further opportunity for public feedback.

Mr Sherley said that, if the special variation is approved, it will allow council to maintain existing service levels "where practicable".

The variation would only be to the general rate, not water, sewer or waste management charges.

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