An "administrative error" could see Kiama residents rates go up by more than $100 a year - an error that was flagged a year ago.
In early 2022, following uproar over the low rate rises set by the Independent Pricing and Regulatory Tribunal (IPART) councils were allowed to apply for an additional variation to bump up their rates in a time of high inflation.
Kiama Municipal Council was one of 86 councils that applied - and the only one who ended up with that 0.9 per cent rise not being permanent.
This was due to the "administrative error" council CEO Jane Stroud spoke of at Tuesday night's meeting. In a motion passed by council in 2022, the wording called for a "temporary special variation".
However, in the formal application documentation sent to IPART, the council officer filled in "permanent" .
Knowing council's motion was for a temporary rise, IPART emailed council for clarification in May last year, to which a council officer responded "Sorry, it should be a temporary [rise]".
At that point the error could have been corrected; instead it was left until the meeting on Tuesday night to address.
At that meeting councillors voted to write to IPART requesting a retroactive change of the rate rise to "permanent".
Otherwise, having to reduce the latest IPART rates of 5.1 per cent to 4.2 per cent would see council lose $175,000 in revenue.
"The financial position of council is a significant concern," council papers said.
"Council have been extremely transparent about this situation and shared regular information and reports on the financial status of the business. The reduction of $174,000 has an adverse effect on operating and unrestricted performance results."
Earlier this week, Mayor Neil Reilly estimated the 0.9 per cent rise would equate to a rough average of $138 extra on rates notices each year.
At the Tuesday night meeting Ms Stroud described the rise as a "minuscule adjustment".
She added that council wasn't sure whether IPART would even allow it to retroactively change its application but an endorsement from councillors was needed before that step could be taken.