The portion of council tax taken from Eastbourne residents by the borough council is going up by a little under 10p per week.
That's in addition to the borough receiving special permission from the government to borrow £6.8m from its own reserves, in recognition of the extraordinary harm that the pandemic has caused to the town's income from visitors and and leisure.
Councillors said the 2% rise in its share of council tax bills will enable the authority to continue delivering essential services to residents and support businesses through the challenges posed by the pandemic.
Councillor Stephen Holt, Cabinet member for Financial Services, said:
"Coronavirus has impacted on all aspects of our way of life, most tragically in some cases with the loss of loved ones.
"We have been doing everything we can to support residents, particularly the most vulnerable, and Eastbourne businesses through these difficult times so I am pleased we have been able to keep the increase in council tax down to just 10p a week."
As a seaside town reliant on tourism, Eastbourne's local authority said it has been dealt a crushing financial blow by Covid-19 with the council bearing significant unplanned costs and huge losses in income.
Eastbourne Borough Council derives around 60% of income from tourism, and this figure has suffered a massive decline due to Covid-19 — including £6 million worth of revenue lost from the forced closures of theatres and all conferencing.
Councillor Holt added:
"The pandemic has hit the council's income, created increased demand for our services and led to more hardship across the borough requiring a rapid expansion of support for jobs and the economy.
"We recognised that early intervention was important and have already made savings of £4.8 million this year.
"We also approached the government in the summer when they asked for councils with exceptional financial circumstances to contact them.
"It is no surprise that we are just one of a number of councils that have requested additional support at this time."
Following discussions with the government it has been agreed that the council can capitalise up to £6.8m for the financial year 2020/21 and up to £6m for 2021/22.
Councillor David Tutt, Leader of Eastbourne Borough Council, said:
"This agreement from government is recognition that the Covid lockdowns created unavoidable and unprecedented pressure on council finances.
"We have been working closely with the Ministry of Housing, Communities and Local Government for some time over our significant shortfall in funding and although our calls for the government to honour its financial promises made at the start of the pandemic to compensate for lost income have not been met, we are encouraged to be moving ahead now with capitalisation plans albeit at additional financial cost for the council to manage.
"Alongside delivering significant savings through our Recovery and Reset programme, we have achieved a budget that provides financial sustainability and resilience for the future."
A government spokesperson said:
"The government has given considerable support to the local government sector to respond to the COVID-19 pandemic.
However, a small number of individual authorities have unique circumstances or residual issues that have resulted in unmanageable pressures, and have made the local decision to approach the government to request support.
To support these authorities, we have agreed to provide flexibilities – through a capitalisation direction – to enable authorities to use capital resources to support their revenue budget positions."
In the borough, a council tax bill is divided between East Sussex County Council (73%), Eastbourne Borough Council (12%), Sussex Police and Crime Commissioner (10%) and East Sussex Fire Authorities (5%).
The 3.49% increase planned by East Sussex County Council would mean its portion of a Band D bill increases by £52.02 a year.
Full Council will consider the budget on 24 February.