The rate peg system is under review as the Independent Pricing and Regulatory Tribunal (IPART) looks at how councils can align rate revenue with population growth to be able to provide the services a community needs.

It's not expected to have a huge impact on the city at its current size, but as Tamworth Regional Council's (TRC) defining document Blueprint 100 sets out a 100,000 person population goal - the change could be necessary, TRC mayor Col Murray said.

"If we had that in place for the last 10 years we would be in a much better financial position with more capacity to do the things the community would like us to do," he said.

"With growth will come additional revenue, whereas under the current system that doesn't happen.

"It doesn't affect us as much as places like western Sydney or Port Macquarie or Coffs Harbour, but their growth is much higher than ours."

The rate peg review will look at population growth in rural and regional NSW as well as Sydney.

It will focus on the different types of income councils can source to cover the costs of population growth and the role of the rate peg.

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It will also look at how growth varies between NSW councils, how to define population growth and what the impacts are on council costs.

The review will make recommendations on the amount of revenue local councils need to service growth, acting IPART chair Deborah Cope said.

"The review is focused on ensuring local councils can continue to provide quality services to their communities, including in areas experiencing population growth," she said.

IPART will present a final report to NSW Local Government Minister Shelley Hancock in September.