North East Derbyshire District Council has agreed to raise council tax by 1.99 per cent in what the authority describes as a 'difficult decision'.
The 2018-19 rise will see properties in band D, for example, paying an extra £3.64 per year - or 7p per week.
The extra revenue generated - approximately £111,489 - will help fund services including waste collection and recycling, support for the most disadvantaged residents and planning, leisure and economic development services.
Councillor Graham Baxter, leader of the Labour-lead council, said: "We have worked hard to mitigate the reduction in Government grant by generating income wherever we can and we will continue to do this so the whole burden does not lie with local residents.
"No one wants to increase council tax if it can be avoided but the reduction in funding we receive combined with the increased costs for goods and materials have left us little choice.
"We have always said our number one priority is to protect jobs and frontline services and we have kept to this promise.
"We have invested heavily in our leisure facilities, improved our recycling services and contributed to the growth of our local economies while still protecting jobs and delivering good quality services for the benefit of our residents."
A council spokesman added: "While the council has taken action both to reduce its expenditure and to increase locally generated revenue, it is facing financial shortfalls of just over £500,000 next year, rising to an identified shortfall of £2.157million by 2022."
Where does your council tax go?
North East Derbyshire District Council receives only 10 per cent of council tax paid by residents.
The remaining 90 per cent is distributed to Derbyshire County Council, Derbyshire Constabulary and Derbyshire Fire and Rescue Service.