Horsham Rural City Council applied to the commission earlier this year to increase rates by more than the state government’s 2.5-per-cent cap, which takes effect in July.

The commission released a list of six approved council rate cap increases on Tuesday.

Buloke Shire Council was also successful in its cap application, and will increase rates by 3.05 per cent in 2016-17.

Moorabool, Murrindindi, Pyrenees and Towong council applications were also approved. They will increase rates between 3.5 per cent and 6.34 per cent.

​The commission rejected applications from Ballarat, Casey and Wyndham councils.

Commission chairman Ron Ben-David said the group looked at whether higher rates were consistent with the long-term interests of communities before making its decisions. 

“We considered each council’s application on its merit. We approved applications where the councils could clearly demonstrate a long-term financial need, supported by well developed long-term plans,” he said.

Dr Ben-David said the commission assessed whether councils had explored feasible alternatives to rate increases before making their applications.

He said the commission was satisfied a higher cap was appropriate for Horsham Rural City.

“Based on current and forecast road asset service levels, Horsham does not otherwise have sufficient options to increase its road renewal expenditure for 2016-17,” he said.

“As a matter of high priority, however, the commission considers Horsham should undertake a more strategic infrastructure needs assessment, including seeking views from the community and ratepayers on infrastructure need and affordability.”

Dr Ben-David said the successful councils needed to work closely with their communities to develop rigorous long-term plans identifying their service and infrastructure expectations, while taking into account residents’ ability to pay.

“We expect councils to manage their costs on a multi-year basis rather than going back to their communities seeking higher rates on a year-by-year basis,” he said.

“We will be reporting on whether councils spend their money in line with the commitments they gave in their applications.”