The Independent Pricing and Regulatory Tribunal (IPART) will review the rates peg system that currently limits rates increases to a maximum of 2 per cent for the next financial year.

The NSW government has asked IPART to recommend a rate peg system that allows council rates to be varied annually in a way that accounts for population growth, including in rural and regional areas.

Wagga mayor Greg Conkey called for the cost of the city's "growing pains" to be considered by a rates peg review.

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"We certainly have pains as a result of our growth and if we're expected to reach a population of 100,000 in the next 25 years, that is going to make it even more difficult to keep abreast of demands," Cr Conkey said.

"I do like the fact that we have growing pains, it means that we are a very progressive city and we are growing, but we need to be mindful of the costs."

Other Riverina mayors said they supported the rates peg, either because their councils could function with the revenue limits or it had forced them to be more disciplined with costs.

Temora mayor Rick Firman said his council "never really had an issue with rates pegging".

"We have always felt that we'll live within our means and if we need to go further we'll go to the community with a special rate variation and if we can justify it, we'll take it to IPART," he said.

Cr Firman said Temora Shire's efforts to enable population growth via new subdivisions could put pressure on rates rises.

"We're always looking at our costs and we have got to look at our income streams and looking for opportunities to enhance that in a proper, legal and fair manner," he said.

Cr Firman said it was Riverina Eastern Regional Organisation of Councils' position that rates pegging should be removed.

Acting IPART chairwoman Deborah Cope said the rates peg review would be "focused on ensuring local councils can continue to provide quality services to their communities, including in those areas experiencing population growth".

Cr Conkey said he would welcome any review into the rate peg given Wagga was dealing with a "huge backlog" of roads maintenance that was "a constant source of complaints from ratepayers".

"We certainly don't have the funds at the moment to upgrade all the roads," he said.

Coolamon mayor John Seymour said he was more concerned about "cost shifting" from the state government than the rates peg.

"I think people can only afford so much and [the rates peg] has really made a lot of local government areas have a good hard look at their operations," he said.

"In terms of having any issues with costs of population growth, it hasn't really had any effect on us."

The review will make recommendations on the adequate levels of revenue required by councils to service growth, with a focus on changes to total rates revenue, not individual rates.

"Under the current system, an increase in the population of a council area does not necessarily result in an increase in revenue from rates," Ms Cope said.

"The costs incurred by councils to service growth are recovered from special variations, developer contributions and supplementary valuations" said Ms Cope.

IPART will accept submissions until May 3, with the final report to be handed to the Local Government Minister in September.

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