Six Christchurch city councillors opposed to rates going up have been outvoted by their colleagues.
The council today signed off the draft annual plan, and will seek submissions on a potential rates rise of 3.5 percent.
Councillors James Gough, Sam MacDonald, Catherine Chu, Phil Mauger, Aaron Keown and James Daniels voted against the draft budget but 11 other councillors voted for it.
In March the six had called for a 12-month freeze on rate rises to minimise the burden on residents during a challenging economic time.
The recommended budget caps capital spending at $400 million, reduces the organisation's running costs by $23m, and increases the borrowing by $102m.
It also sets aside $118m for the Metro Sports Facility and Multi-Use Arena.
Gough, who has previously advocated for a zero rates increase along with the five other councillors, said he was disappointed not to see the zero rates rise as an option.
"We felt that we weren't a minority in the community but it looks like it might be the case around the council table unfortunately," he said.
Gough said the council must do more to cut its capital and operational expenditure in order to save money.
Service, staff cuts predicted
In the draft annual plan report, the council staff said a zero rates rise was in conflict with the central government's policy on New Zealand's economic recovery.
"A zero rates increase would have severe impacts on both back office and frontline services, maintenance and capital works, as well as levels of service," the report said.
"There would be an unprecedented level of staff redundancy and commensurate redundancy costs in the same year that savings are being sought."
Prior to the Covid-19 lockdown, the council was in the process of consulting on a draft annual plan which provided for a 4.65 percent rates increase.
Council staff recommended an overall rates increase of 3.5 percent and an average residential rate rise of 2.23 percent.
For an average house with a value of $508,608 that would mean paying an extra $1.19 a week, or $62.05 a year, the council said.
"We recognised that we had to reduce the average rate increase of 4.65 percent proposed in our initial draft plan, given the gravity of the situation that the organisation and our ratepayers are facing," said council chief executive Dawn Baxendale.
"The revised plan we will be recommending to council reflects the very different financial position and social and economic environment we are now in as a result of the Covid-19 pandemic."
Once a revised draft 2020-21 annual plan has been adopted, a new round of public consultation will be undertaken, starting on 12 June.
The council is not due to finalise its budget until the end of July.