Katherine Town Council has received its PFAS compensation payout, totalling $1.6 million.
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In a statement, mayor Lis Clark said some of these funds would be used in the 2021/22 budget figures and the remainder placed in Council reserves.
She said the funds will be utilised to offset increases in rates previously planned under the Council Long Term Financial Plan, as well as fund municipal services and projects.
According to KTC, the 10 year financial plan had set the rates increase at above 7.2 per cent for the 2021/22 budget, however the receipt of the PFAS funds will reduce that figure to a 4.9 per cent increase.
"Utilising the funds to keep the rates down for next financial year will assist to make up the arrears from last year where we didn't increase the rates at all," Ms Clark said.
"This is a much better result for all ratepayers and residents as council services extend to everyone living in Katherine."
Ms Clark said KTC will send out its draft budget for community consultation after it is adopted at the Ordinary Meeting of Council on March 23.
KTC, which decided at a late stage to join the action, is the biggest property owner in town and is likely to receive the biggest payment from the settlement.
$56 million in long awaited compensation payments for PFAS contamination finally started appearing in Katherine resident's bank accounts this week, after a landmark class action against the Department of Defence.
Not all of the residents who joined the class action have received their payout yet, with a Shine Lawyers spokesperson explaining differences in banks means the flow of money will be gradual and likely to continue until next week.
About 2500 residents from Katherine who owned a property in the investigation area - the Katherine township - as at November 23 2016, joined the legal action against the Federal Government arguing for compensation over PFAS contamination and a subsequent fall in property values.
Properties had become unsellable and some residents estimated they had lost at least a third in value of their property due to chemical contamination from the use of toxic fire fighting foams once used at RAAF Base Tindal near Katherine.
