Tenterfield Shire Council could go into administration within 18 to 24 months if it does not see an increase of rates in the next financial year.
A proposal to double rates over the next two financial years would "assist council to help keep its head above water".
The council was one of the few New England councils that did not increase rates this financial year above the modest rate pegging level.
The Independent Pricing and Regulatory Tribunal (IPART) approved all applications made by New England councils and eighty-one other NSW councils to increase their rates above the level of the annual rate peg.
The increases were approved for Armidale Regional Council, Glen Innes Severn Council, Inverell Shire Council, Moree Shire Council and Uralla Shire Council following an additional special variation process.
It was decided at the last Tenterfield council meeting, that before a decision is made for the following years, the public will be consulted about the proposed application for a rate increase of 43 per cent in 2023/24 and another 43 per cent increase in 2024/25 - a cumulative increase of 104.49 per cent.
Under the current structure, if this proposal were accepted, residential ratepayers would pay on average an additional $5.41 per week the first year and $7.84 the following year.
That's an increase of about $280 in the first year and an additional $400 in the second year.
Businesses would have to fork out an average $12.71 in the 23/24 financial year and $18.38 in 24/25.
For farmland, which equates to 48 per cent of the shire, ratepayers would see an average $13.33 per week rise first which would grow to $19.04 in the second year.
Finance and technology manager, Roy Jones, said looking at the financial sustainability of the council his recommendation was that there was a definite need for a rate variation in order to be financially sustainable into the future.
"The 43 per cent had been shortlisted by me to address the deficit into the future. It is a percentage that I believe will assist council; it will not fix all our problems," Mr Jones said.
Community engagement is expected to start in September with the council to receive a further report in November which will include a draft application to the Independent Pricing and Regulatory Tribunal for an increase to the ordinary rate income.
"We want to make it clear this is just a proposal at this stage," Mr Jones said.
"We will gain the community feedback, then let councillors decide what the final percentage will be, and make an application. Then a decision would be made by IPART. They might dismiss it, or make it a lesser number," he said.
Chief executive, Daryl Buckingham, said he had been told between 30 to 40 councils would put in an application for rate variations next year.
"So it's not just us," Mr Buckingham said.
"All we can do is put up what the data tells us is the best way forward for the community and then IPART will have to make a call," he said.
"We believe the 43 per cent will give us long-term sustainability probably up to the 10-year mark, maybe a little bit longer ... failing to get the 43 per cent, at some point we do become unsustainable."
Cr Giana Saccon voted against the decision, and said the community could not afford this rate rise.
"If residents are going to have to pay extra money they would expect services for that, otherwise, why stay in this town?" Cr Saccon said.
Cr Greg Sauer assured ratepayers the figures and decision had been seriously considered.
"In this six-month council term we have spent more time on workshops than I've spent on my previous five years on council," Cr Sauer said.
"We haven't turned up here today with a dart throw at the wall figure. We are not going into this blindly, but armed with all the information ... It's a hit but it still gives us a council moving forward," he said.
Cr Tom Peters warned this was the better alternative of two difficult scenarios.
"If we go into administration, the administrator will take over, the rates will still go up, and they'll sell everything we've got," he said.
"We're at the end of the state so we'll get no services whatsoever and ... if we get amalgamated with somebody we'll get absolutely nothing so I think the ratepayers have got to look at that.
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