The increase is believed to be the third highest in the state - behind only Golden Plains and Ararat.

A report to last week's council meeting said the draft budget, and rate hike, provided for an operating surplus for the first time in council's history with capital projects of more than $7 million.

They include construction of a new council depot ($1.45 million), construction of the Creswick Tourism Interpretive Centre ($887,000), construction of a new council depot ($1.45 million), replacement of the Clunes Museum's verandah

($45,000) and various roadworks ($2.52 million).

At the meeting, acting chief executive officer Philip Shanahan said the rates rise included 4.2 per cent for CPI along with another three per cent for the roads projects.

Mr Shanahan said the council had never before been able to achieve a surplus, or even breakeven, budget.

"This year's result is a considerable achievement," he said.

Meanwhile, ratepayers at the meeting did not seem quite so keen on the budget with one resident, who said he paid $1400 for 20 acres of land, asking "what am I actually getting for my rates?".

Another questioned whether the council worked hard enough to gain funding from state and federal sources while another said residents could no longer subsidise the impact of tourism "on our towns".

Despite rumours the public gallery would be filled with Ned Kellys or burka-clad residents there was only one man who kept his head covered.

Avid council watcher Rod Kirby, who the previous week had gained nationwide publicity wearing a steel helmet, long coat and gumboots, sat quietly in the second row, this time his head covered only by a battered baseball cap

emblazoned by a kangaroo and the word Australia.

An information session about the draft budget will be held at the Daylesford Town Hall Mondayat 7pm.