Mayor Loretta Baker will also receive the same increase, taking her earnings from $43,170 to $44,250.

The increase was bittersweet for our civic leaders who applied to the Local Government Remuneration Tribunal last financial year for a recategorisation from Regional Rural to Regional Strategic Area but was knocked back.

Had it been approved councillors' maximum annual allowance would have been $30,410 and the mayor's $88,600.

In a report, council's finance officers recommended the maximum fee (under the Regional Rural category) be applied, due to council being one of the largest in its category and the significant role it will play in the continued evolution and growth of the Greater Newcastle Metropolitan Area.

The tribunal has determined an increase of 2.5% to mayoral and councillor fees for the 2019/20 financial year, effective from July 1.

"Given council's position as one of the largest councils in the Regional Rural category, and past representations that council would be better placed as a Regional Strategic Area, it is recommended that maximum fees payable are adopted," the report said.

The Tribunal reviewed the key economic indicators, including the Consumer Price Index and Wage Price Index, and had regard to budgetary limitations imposed by the government's rate pegging policy and found the full increase of 2.5 per cent was warranted.

Council's recategorisation request last financial year was unsuccessful, on the basis Maitland's population was significantly below the indicative population range of Regional Strategic Area councils.

Port Macquarie also sought recategorisation last year, and repeated its submission again this year.

The Tribunal rejected Port Macquarie's application on both occasions, and noted in the current report that Port Macquarie's population of 83,131 (which is slightly higher than Maitland's current population of 81,235) did not satisfy the relevant criteria.