The council has applied for an exemption to the controversial restriction which shackled the amount it could raise its rates to just 0.7 per cent next financial year.

Councillors unanimously agreed this week to seek approval to instead raise rates by 2 per cent, amid fears the lower rate peg would drastically worsen the council's bleak financial situation.

The move comes after the NSW government resolved to allow councils who would be significantly impacted by the strict rate pegs announced last year to apply for an Additional Special Variation (ASV).

IN OTHER NEWS:

Wagga councillor Rod Kendall said receiving the ASV and being able to increase the rates by more than 0.7 per cent would be crucial for the council's finances.

"It is what councils should have just received in the first place and to not apply for it would mean that our finances and income would be, in real terms, going backwards at a significant amount," he said.

Cr Kendall said residents unhappy with their rates being further increased should consider the impact of inflation and the costs necessary to improving the quality of Wagga's roads.

"In the last council election there was no public discourse about our rates but there certainly was a very significant level of comments about infrastructure maintenance - that can't be improved if the income is going backwards," he said.

If the council is successful in obtaining the ASV, it will receive an additional $630,000 from ratepayers next financial year.

This will then snowball and in 2031/32 the additional funds generated by the rate variation is projected to be $830,000.

Cr Mick Henderson said it was vital the council use these extra funds in an effective manner.

"I do find the increase is necessary because that 0.7 per cent is not a big margin and our costs have gone up well over that," he said.

"But it's very important those funds are not to be wasted. They have to be used constructively, to repair and maintain infrastructure around the city which is lacking."

Lynne Bodell, secretary of the Wagga Residents and Ratepayers Association, said she accepted that the increase was probably needed but urged the council to use the funds appropriately.

"Our council runs at quite a deficit so if ratepayers are expecting to have all our services maintained and improved then the money for that has to come from somewhere," she said.

"I would hope that, if it is obtained, the council is going to use this extra money appropriately."

Dr Bodell also felt that the city's pothole-filled streets were the obvious target for the additional funding.

Cr Kendall said he is extremely confident Wagga City Council's application for the ASV will be successful and that it is just a matter of "applying in the correct manner". The outcome will be announced on June 21.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: