Maitland's growing population has the council relying on grant funding to meet its revenue shortfall

The council has received just $8.38 million of the federal government's $3.2 billion financial assistance grant and will spend $1.8 million of that on maintaining roads.

The rest of the money will be spent across the council's operational plan for this financial year, and despite a four per cent increase on last year's grant, it's clear the sum is not enough.

The council needs to lift its income to keep up and rate rises haven't provided enough funds to meet the shortfall.

Council's corporate planning and performance manager Kelly Arnott said lifting revenue wasn't straightforward for councils like Maitland.

She said other council's had a wider range of income streams and less greenfield development, which attracted a lot of investment in infrastructure and services.

She said the council had a "significant financial sustainability challenge" and grant funding was one way the council could address the increasing revenue shortfall.

But, she said the current grant funding model wasn't set up to give Maitland the share it needed.

"[It] does not consider that fast-growing, greenfield councils often face higher costs in delivering infrastructure and services," she said.

"The model assumes the more people in a community, the cheaper it is to provide resources per person, but this is not the case for Local Government Areas (LGA) increasing their suburban footprints and the resulting infrastructure maintenance and service delivery requirements."

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Ms Arnott said the model also did not consider a council's non-rate revenue sources.

The proportion of the total revenue that comes from the grant is also not considered, Ms Arnott said.

"Some councils have more opportunity to derive income from paid parking facilities, commercial property portfolios or major events than others, particularly those in rural and regional areas," she said.

Grant money is allocated according to the national principles under the federal Local Government (Financial Assistance) Act 1995.

Maitland councillors agree the council should advocate for a funding model that accounts for a council's non-rate revenue and addresses the challenges that high-growth greenfield councils face.

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But Councillor Robert Aitchison felt this year's grant allocation was adequate and the city was "doing fairly well" with grant funding.

"We always put our hand out, more, please, can we please have more," he said.

"I am disappointed that we seem to live our life having to beg various governments for funding, rather than have them trust us to make good judgements for ourself," Maitland Mayor Philip Penfold added.

Ms Arnott said the council would continue to share its views with the state and federal governments.

She said setting a minimum funding amount for metropolitan councils and their residents would be worthwhile.

She said that would enable funding to be allocated to the Local Government Areas (LGAs) where there was more benefit per resident.

Maitland received just over $8 million through the financial assistance grant in the 2022-23 financial year. It spent $1.7 million of that amount on roads.