The SRV proposal had become the Port's most controversial issue in years, with debate raging for and against a 65 per cent rate rise over seven years to be used to fund $100 million over 10 years in community projects, including rejuvenated town centres, roads and drainage, sports facilities, path and cycle ways.

The decision handed down on Monday morning sent shock waves through the council chambers with Mayor Ryan Palmer - the proposal's primary driver - expressing his great disappointment on behalf of those in the community who were prepared to fund the list of projects through a rate hike.

The decision cannot be appealed.

"We have accepted the umpire's decision," Cr Palmer said.

"We will continue to apply for grants and advocating for government support to deliver projects we know are critical to Port Stephens residents and visitors.

"Many of the things that our community have been crying out for will have to wait to be completed.

"Our Capital Works plan will remain unchanged, which means we'll still be delivering quality services and facilities our community expect. Unfortunately, some works will need to wait."

Mayor Palmer said that the council was a victim of its own budget efficiencies, having turned a $13 million deficit into a surplus over two terms of council.

"It seems rather ironic that Dungog Council, which is financially strapped, can receive a 78 per cent rate rise over five years, yet a more stable Port Stephens council is rejected outright," he said.

ALSO READ: Community reacts to IPART's rejection decision

The IPART commissioner Dr Paul Patterson in his findings in fact provided two significant reasons for refusal - the council's financially sound position and the strong community opposition.

It was noted that only 14 per cent of people were in favour of a 7.5 per cent rate rise over seven years in the initial independent survey commissioned by the council.

"What the decision makers may not have taken into account the number of groups and organisations, the ratepayers we met face to face at 31 consultation meetings who overwhelming approved of the SRV once the details were explained to them," he said.

Dr Patterson said the council had only partly demonstrated a financial need for the proposed SV, "as the SV expenditure is not needed to ensure financial sustainability or to meet infrastructure backlog and renewal benchmarks".

"The application also outlined a lack of community willingness to pay for the works the council proposed be funded by the SV. The magnitude of the increase in total dollars for the average ratepayer under the proposed SV would be considerable," Dr Patterson said.

"We found that the proposed SV expenditure is not required to reduce the council's infrastructure backlog to reasonable levels."

Mayor Palmer said it would be a shame that projects such as Mustons Road at Karuah, drainage improvements at Shoal Bay, Medowie Road and Gan Gan Road pathways won't begin next year as the council had hoped.

He was extremely surprised that IPART did not see fit to approve a partial rate increase.

"We are confident with our processes and the fact that we were able to piece together the most comprehensive application possible," Cr Palmer said.

INITIAL STORY: Council's bid for rate rise rejected by IPART

He emphasised that no money had been wasted on the exercise and refused to rule out another SRV proposal in the future.

Asked if he would be standing again for mayor at the next election, he answered simply: "Yes".

The SRV's most vocal opponent West Ward councillor Giacomo Arnott said the decision had demonstrated that the benefits put forward by the council were not reasonable compared to the financial impact on thousands of families and businesses.

"It shows that when our community works together, we can stop poor decisions being made by elected representatives who refuse to listen," he said.

THE RATE RISE IN EXAMINER STORIES