Wellington City Council is putting together a budget of infrastructure with a rates increase forecast of 23 per cent next year.
The council is about halfway through its review of its Long Term Plan, which signals how it will divvy up its budget for the next 10 years.
Mayor Andy Foster says it'll be one of the most challenging budgets ever considered by the city council.
They're about to enter what's commonly referred to as the "trade-offs" stage. This is when decisions are made around what's prioritised to bring down projected rates increases.
It's understood the starting point is an increase of 23 per cent for 2021/22.
That includes the Let's Get Wellington Moving transport project, Three Waters investment, and strengthening the closed central library.
In July the rates increase was forecast to be more like 15 per cent, but that's because it didn't yet take into account those three investments.
Deputy mayor Sarah Free said at a committee meeting on Friday: "This will be very much an infrastructure Long Term Plan".
A narrative has been building across the city that Wellington is "losing its mojo" and the council needs to focus on the basics rather than the bright and shiny.
But it's becoming increasingly clear basic infrastructure will come at a big cost.
In a statement, mayor Andy Foster said the council was months away from proposing a consultative draft 10-year financial strategy and rates for 2021/22.
No decision has been made, he said.
"We are still working through the council's priorities and are yet to determine a capital programme and levels of investment. This will be one of the most challenging budgets ever considered by council."
"This process will be undertaken in the context of outcomes from the Kaikōura earthquake and Covid-19 and while doing everything it can to keep rates affordable. It is far too early to speculate on any level of rate setting."
The council has limited revenue levers to pull to keep rates down.
Additional revenue gathering could come in the form of higher fees and user charges.
Divestment could also be on the cards.
It's understood one example given at a workshop on the issue yesterday was the council selling the Convention Centre, which is still being built, and leasing it back.
Councillor Iona Pannett questioned how long the council could continue doing trade-offs, with the consequences of previous ones coming home to roost.
"They will be even worse in 10 years' time. I think we're really getting quite close to a tipping point with climate change... we've got quite a number of very significant issues that we need to concentrate on.
"If you want a good city, then you have to pay for it. It is not free."
But she was also mindful of rates affordability at both ends of the housing market whether it was people with large mortgages, or retirees with expensive houses but little income.
Councillor Nicola Young said she was concerned about two things - getting the city's infrastructure sorted and making sure Wellington remained affordable.
"As far as I'm concerned, everything else is pretty much negotiable."
She said the council needed to look at its service levels and whether it was trying to do too much.
"We've got to make sure we don't force people out of their houses because they can't afford to pay the rates, just because we won't cut any costs."
Young said shorter opening hours at libraries could be considered as well as cutting back on consultation.
"At home if you have a big drop in income, you cut your costs."
Young also suggested the council could re-think some of the projects in Let's Get Wellington Moving describing the idea of light rail as a "fantasy land".
Councillor Rebecca Matthews agreed core infrastructure was the priority and now was not the time for "glamorous" extra.
But she didn't have an appetite for cutting services.
"I don't see why we would want to go and start cutting things, especially when people are already suffering from the effects of Covid, from the housing crisis.
"I think us cutting what's available to them would be mean."
Matthews said the council would be foolish not to continue to borrow for big capital expenditure projects.
"Borrowing is so cheap and the challenges we have are huge, so we just have to keep a balanced approach and not go silly."