Illawarra residents' rates will go up more than the set amount after Wollongong and Kiama councils had their rate rises approved.
All councils had their maximum rate rise - known as a rate peg - set by the Independent Pricing and Regulatory Tribunal (IPART).
For Wollongong that meant a rise of no more than 1 per cent, and 1.6 per cent for Kiama.
The rate peg was set at the beginning of the COVID pandemic but both councils claimed the worsening situation, along with various natural disasters meant the rise would not be enough.
"Having managed through the past two devastating years that saw the threats of fire, flood, pandemic and more floods within our community, the new challenge for 2022-2023 is the rapidly escalating cost of delivering service that council will be faced with," Wollongong City Council documents stated at the time.
This week IPART approved a rise for both councils; Wollongong's rates will rise by 1.8 per cent and Kiama's by 2.5 per cent.
Both those figures include the initial rate peg.
IPART member Deborah Cope acknowledged the proposed rate peg ended up being out of line with what occurred in the wake of the pandemic.
"Since then, high inflation and global uncertainty increased councils' costs," Ms Cope said.
"Some councils have demonstrated that without additional funds they will not be able to deliver the projects they have already consulted on and included in their budgets."
She said IPART is reviewing the rate peg methodology to deal with volatility in economic conditions.
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