The groups have concerns about Lake Macquarie City Council's spending.

Together they will make an action plan to challenge the council on several fronts.

Pelican-Blacksmiths Progress Association will join Boolaroo Action Group in trying to organise other community groups to challenge a proposed rate rise.

Residents will be hit with a 9.8 per cent rise, on average, while businesses will be hit with 12.8 per cent rise, on average, each year for seven years.

The campaign by the community groups will also target the restrictions placed on properties due to sea level rise predictions.

The groups say some residents were concerned about the effect of council restrictions on their properties.

Pelican-Blacksmiths Progress Association spokesperson Chris Osborne said there needed to be a greater focus on the council's expenditure and where it was going.