Wellington City Council has forecast a $7 million shortfall because of the latest Covid-19 restrictions, and one councillor warns that cost could increase further.
The modelling has been presented in the council's Finance and Performance Committee's latest agenda documents.
It's estimated that for each week at alert level 4, Wellington City Council loses $1.25m in revenue from the likes of parking, sporting facilities, and consenting and compliance.
This revenue loss is considered to be largely the same at alert level 3.
The model, which was put together before the Government announced the move to Delta level 2, estimated the council would need to debt-fund $7 million.
The forecast was based on two weeks at alert level 4, two weeks at alert level 3, and four
weeks at alert level 2.
Finance and Performance Committee chairwoman councillor Diane Calvert said given the number of people who hadn't gone back into the CBD, it was almost like level 3 anyway.
Because the modelling was done before the announcement of the new Delta level 2 restrictions, Calvert said the true cost of restrictions to council could be much worse.
"It's early days and, because of level 2, it's shaping up to be a bit different."
Critically, one of the new rules is a limit of 50 people at hospitality and event venues, while outdoor venues can have up to 100 people.
Calvert said people should only come back into the CBD if they felt safe, but people also needed to recognise that part of the city is its vibe.
"We are the engine room of the region. We know if we don't support some of these businesses along the way, they won't be there when we do want them."
The committee papers also noted that after last year's alert level 4 lockdown council was called on for financial support.
Council's commercial leaseholders, licensees, and partners received about $130,000 per week and Council Controlled Organisation had access to a $5m fund.
Council officials said these needs were likely to be similar this time too.
This would put further strain on the council's finances.
Council staff are still fielding requests for this financial support, which will be presented to the council at the end of this month.