The average Dungog Shire Council rates will increase by $135 a year from July 1.
The Independent Pricing and Regulatory Tribunal (IPART) advised the council on Monday that its application for a Special Rate Variation (SRV) was successful - under amended conditions.
IPART approved a 76 per cent rate rise over five years, less than the 97.8 per cent increase over seven years the council had asked for.
"It is clear that Dungog Council has a clear and urgent need for increased funds," said IPART Chair Paul Paterson.
"However, given the magnitude of the proposed increase and uncertainties around budgeting, IPART considered it was prudent to approve the special variation for a period of five years, not seven as requested."
IPART said in its report that the partial approval will allow the council to continue to fund operating and capital expenditure for its road network, timber bridges and community buildings, enhance its financial sustainability and begin to reduce its infrastructure backlog.
The rate rise will be rolled out over five years and will apply to all rateable properties in the shire from the 2019/2020 financial year.
IPART's approval means the Council is now able to increase the average residential rate by $135 in 2019-20 or by $685 over the next five years.
Average business rates will rise by $135 in 2019-20 or by $686 over the next five years, and average farmland rates will go up by $334 in 2019-20 or by $1,694 over the next five years.
"We received over 100 submissions opposing the council's application, mainly on the grounds of affordability," Dr Paterson said.
"Nevertheless, we are satisfied the council has demonstrated its need for the additional revenue to improve its financial sustainability and to fund necessary operating and capital costs, that it largely demonstrated its community is aware of the proposed rate increases, and that it is taking steps to improve productivity and contain costs."
The partial approval will allow the Council to begin implementing its expenditure program, whilst considering whether to apply for a further special variation in future years.
Dungog Shire Council general manager Coralie Nichols said the Special Rate Variation would enable the council to address its financial stability.
"With the current low rate base, it was simply not financially possible to deliver on community expectations about the maintenance of roads and bridges and the provision of key services," she said.
"The Special Rate Variation means Council can now deliver a range of services that the community wants and expects and also ensure that our key assets and facilities are properly maintained."
Mayor Tracy Norman said while she understood not all residents welcome a rate rise, it was necessary to address council's budget deficit and infrastructure backlog.
"Importantly, it allows the council to improve and maintain our road and timber bridge network which the community has told us they want," she said.
"With support from State Government which includes $16 million for our timber bridges and the return of our regional roads to state roads and the Federal Government promise of $20 million to upgrade Clarence Town Road, Dungog Shire will start to see great improvements in the look and feel of the area.
"Along with my fellow councillors, this is the raft of initiatives that I have been working hard on to achieve and I am pleased to be getting results."
Council's general manager Coralie Nichols has urged ratepayers who are concerned about the financial impacts of the Special Rate Variation to make contact to discuss their circumstances confidentially.
"There are measures we can put in place to assist members of our community who are in financial difficulty, and we will work closely and respectfully with our community through this transition period," she said.