Rate hike: Armidale and Liverpool Plains indicate rate hike could be on the cards with IPART

Special Rate Variations (SRV) allow the councils to rise rates by more than the statewide two per cent rate peg to fund infrastructure and services or improve financial sustainability.

As part of community consultation, the councils should explain how they plan to reduce costs so the rate hike is the minimum necessary, tribunal member Deborah Cope said.

"In assessing applications IPART will be mindful of the impacts of the COVID-19 pandemic, bushfires and drought on both ratepayers and councils," she said.

Armidale Regional Council has already put three options to the community; a permanent 18.5 per cent SRV plus the two per cent rate peg; a 8.5 per cent SRV plus rate peg or discontinuation of the temporary 10 per cent SRV residents are already paying that ends June 30 next year.

Armidale Regional Ratepayers' Association has indicated it wants the second option, vice-president Herman Beyersdorf said.

"We do realise it would be unsustainable and we do believe while the council has been a bit foolish with splashing around money and so on, that's one issue so we have gone for the responsible course," he said. A report is earmarked to go to ARC in January.

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Liverpool Plains Shire Council (LPSC) mayor Doug Hawkins said it reviewed its long-term financial plan (LTFP) earlier this year.

"The LTFP highlights the challenges that the council is facing in becoming fit for the future," he said.

"As with many other rural and regional councils, LPSC is struggling to continue delivering the existing range and standard of service our community enjoys, while also funding the maintenance and renewal of local infrastructure, such as roads, footpaths, drainage, bridges and public buildings."