Councillors voted seven votes to two for the proposed 3.5 per cent increase to go on public exhibition, with the feedback to be discussed at a meeting on Wednesday, July 17.

Council staff said the increase must be approved before August 1 if it is going to be legally able to be applied to next financial year's rates notices.

Director of business and governance Graham Stubbs recommended the move, which council says will increase revenue by $602,245.

One percent of the rise will help increase council's reserves for future major capital works projects, with the remainder intended to cover what Mr Stubbs said was an increase in operational costs.

Councillors Tony Allen and Russell Fitzpatrick spoke out against the move, and pushed for a 2.7 per cent increase in line with state-wide rate pegging.

Cr Allen said the state government has been "handing out money", and advised other councillors to "play the game correctly" and to be "politically smart" about the proposal.

He said he was concerned ratepayers would approach their local MPs with complaints, and requested council treat ratepayers with "respect".

"The ratepayers cannot afford these projects,' he said.

"It's time to play smart politics and I think that at the present time 2.7 per cent is the way to go."

Council's director of assets and operations, Anthony McMahon, advised councillors the best approach is to have financial reserves until the amount of subsidies available for projects is known.

Mr McMahon said the traditional strategy of councils has been to balance reserves with borrowings when budgeting, adding the infrastructure is depreciating each year and deferring any work would cause "further trouble".

He said the complex geography of the region compared to other areas creates additional costs to the system.

Council officers discovered "anomalies" in the original charges put on public exhibition in April, where dollar cost to the ratepayer "did not correctly reflect the required charges".

Councillor Sharon Tapscott said the request was compounded by the administrative error, and it was not a "clandestine way to milk money from the rate payers".