The rate rise is just under the 6 per cent initially proposed 12 months ago before a reduction to 3.5 per cent after a power struggle within council.

At a special meeting on Monday, the council revealed it was headed for a $1.5 million deficit, with projections of a $2.1 million blowout at the end of 2014-15.

The council’s debt is hovering about $7 million with $600,000 of ratepayer funds required to meet the annual interest charges.

It has proposed a modest $3 million of new capital projects and will be relying largely on handouts to bankroll them.

Projects to be advanced in the next financial year include $1.2 million Cobram streetscape, $400,000 for improvements for boat facilities at Thompsons Beach, Cobram and investigations into a walking track along Hogans Road, Yarrawonga.

The council has proposed $6.6 million of repairs and renewals, in addition to its $10 million annual maintenance program.

About a third of these works are funded through government grants and funding programs.

Mayor Peter Mansfield said the budget aimed to reduce debt and contain costs.

“Importantly, the proposed budget will consolidate the progress we have made during the past year to improve council’s long term financial position,” he said.