At last week's Newcastle council meeting, councillors voted to signal their intention of a rate rise to the Independent Pricing and Regulatory Tribunal above the 2.3 per cent cap for the 2014-15 financial year.

Councillor Lisa Tierney said the Newcastle community would not tolerate any more cuts to services and rates needed to rise.

She said Newcastle rates would have been the cheapest across the Hunter, despite the council supporting the majority of the region's biggest cultural facilities.

Cr Nuatali Nelmes said the community had an issue of trust with the council after it applied for a rate rise for an art gallery upgrade that did not happen.

She said the council needed to be transparent and honest about how it intended to use the public's money.

Newcastle council general manager Ken Gouldthorp said the money would not be used for new projects but instead would fix the council's operational budget to "realign revenue with expenses".

He said the delivery plan adopted by councillors earlier this year signalled that the council planned to increase rates by at least 2 per cent over the cap in 2015-16 and 2017-18.

This would cost the average ratepayer an extra $21 a year.

Mr Gouldthorp also revealed that applying to the tribunal for a rate rise above the cap would cost the council $80,000.

He said council staff would produce a range of options for councillors to assess at workshops. They would then go on public exhibition and be voted on by the elected council.