A report into financial sustainability of NSW local government found many of the State’s largest councils were in financial trouble, and faced the prospect of either massive rate rises or cutting services to make ends meet.

However the Fiscal Star report said Shoalhaven City Council was in a sustainable condition, putting it among only three large coastal councils to receive the rating.

Council’s finance director Peter Dun said the rating was due to council making “hard decisions” on rate rises a few years ago, when the Local Government Minister was approached for permission for a series of rate rises above rate pegging limits.

The additional rate revenue was then put into infrastructure, Mr Dun said.

“We saw this coming and moved four years ago,” he explained.

“That has probably assisted the council’s financial position.”

And the elected councillors had been “good at only spending what they’ve got,” rather than building up debts, Mr Dun said.

The assessment looked at the operating debt and broad liabilities ratios of all NSW councils as they calculated financial sustainability, and compared the ratios to benchmarks.

Shoalhaven Mayor Greg Watson said he was delighted the council had been given the tick of approval by Professor Percy Allan.

“It was a completely independent assessment on NSW councils, and it is pleasing that Shoalhaven’s assessment indicates that council has had a good handle on its financial policies,” Cr Watson said.