Less than a third of residents are satisfied with how the Wellington City Council makes decisions.
Councillors have described the situation as "appalling" and of "major concern".
Over the tumultuous past year, the council has been criticised for being divided and in a state of paralysis.
Its latest annual report revealed the satisfaction figure has dropped from 34 per cent in 2018/19 to 29.7 per cent in 2019/20.
The target itself sets a low bar of just 45 per cent.
Deputy mayor Sarah Free told the Herald the result was appalling and it was the responsibility of all elected members to improve it.
"I'm shocked by it and I don't think it's at all good enough", she said.
Free said the target of 45 per cent needed to be higher and she intended to speak with the council's chief executive about the measure.
"Nobody really wants to think that's the best we can do."
The poor report card coincides with a Department of Internal Affairs (DIA) briefing to incoming Local Government Minister Nanaia Mahuta that low levels of civic participation and confidence in the sector make up an area of concern.
Average voter turnout across the country for the 2019 local body elections was 41.7 per cent.
The briefing said there was evidence of low levels of engagement by communities in the work that councils do.
"This is significant when considering the intended purpose of local government in giving local communities a voice - this cannot be achieved if the community is not taking part in council activities."
Internal Affairs considered the legislation governing local elections was no longer fit for purpose in several areas, noting in the nearly 20 years since the Local Electoral Act was enacted the landscape in which elections occur has significantly changed.
These changes include the reduction in postal services and growth in online advertising and campaigning.
With a proposed review of the regulatory framework for parliamentary elections and the possible changes to district health board election legislation, Internal Affairs considered it timely to consider the nature of and responsibilities for local elections.
"There is an opportunity to establish a more robust, accessible and nationally consistent framework for local elections."
Wellington City councillor Fleur Fitzsimons said the satisfaction figure coupled with low voter turnout and historic failures to invest in core infrastructure showed local government needed to radically change to rebuild public confidence and legitimacy.
"The figure is of major concern. It shows that the council has a long way to go before Wellingtonians have confidence and trust in it."
She said amalgamation was part of the solution to avoid unnecessary duplication and alleviate some agency resourcing issues.
Fitzsimons also said governors needed to able to interrogate advice in a respectful and professional way and for management to embrace this.
Councillor Nicola Young said the council needed to narrow its focus to get work done around infrastructure, city vitality, and rates.
"At a time when the city most wants strong leadership, people don't have confidence in the council decision-making process and I don't blame them.
"All our consultation requirements are kind of mad because we consult to the point of exhaustion. We had consultations going on until late in the evening last year and yet, people aren't convinced it makes any difference to our views."
Councillor Diane Calvert said residents' comments associated with the result indicated the council was not perceived as cohesive.
"As the governing body, we all need to take responsibility to see a marked improvement in our performance," she said. "'How' we go about delivering is just as important as the 'what'."