The city is borrowing to fund everyday costs, Mayor Andrew King says.

Hamilton's mayor has proposed a 16.5 per cent rates hike.

It wouldn't necessarily pay for "new toys", according to Mayor Andrew King, but it would knock the books into shape.

King pitched a 12 per cent increase back in March and ratepayers breathed a sigh of relief when most of his Hamilton City Council colleagues said no.

TOM LEE/STUFF Hamilton Mayor Andrew King will propose the increase at a December 6 council meeting.

Now an even bigger one is on the cards - in fact, it's the starting point for King's suggested city budget for the next decade.

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"It will be up to councillors from now on but if we don't do this, all we're doing is putting our head in the sand and not facing up to the reality of balancing our books," he said.

TOM LEE/STUFF Deputy Mayor Martin Gallagher thinks councillors need to discuss staggering the increase.

"This is what we need to do to balance our books."

On Monday morning, senior council staffers briefed councillors on the mayor's plan for rates, including the mayor's 16.5 per cent suggestion.

King has also asked chief executive Richard Briggs to find $5 million in savings.

Other possibilities covered were shifting straight to capital value rating, smaller rates increases in stages, or "severe reductions in the facilities and services we provide to our community".

Councillors have to wait until a December 6 meeting to debate it formally and see what's in - and out of - King's budget.

Paying more doesn't necessarily mean Hamilton ratepayers will get things like a library in Rototuna or destination playgrounds, King said.

"This is not money for new toys. This is money just to balance our books ... It's to stop us going further into debt for the everyday costs.

"We're borrowing money to run the city. It would be like borrowing to pay the power bill," he said.

His budget proposes the biggest investment the city has ever made, he said, and isn't just about getting enough to make it work.

It will include about $300m in ring-fenced money for community facilities and transport, and King plans to give Rototuna residents some of the investment they've been waiting for.

"The facts are clear," King said in a statement announcing his proposal, "and I believe we simply have to get on with it. Sometimes as city leaders we need to make unpopular calls that we know are right and I think this is one of those calls."

Councillors voted out King's previous rates increase suggestion in March, but he said the council is no longer so new and has been hearing about the finances for a year now.

He doesn't see spreading the increase across several years as a good option.

"The longer we put this off, the worse the situation becomes," he said.

"I believe we need to go straight to sixteen-and-a half per cent, balance our books on day one, and go forward with balanced books."

After that, increases would continue at 3.8 per cent.

Council's still looking into other revenue options which he suggested - including higher rates on developer-ready land.

"We need that on top of the sixteen-and-a-half per cent to make it all work. Otherwise the rates increase would be more."

He wouldn't say if the current financial situation was a legacy of belt-tightening after the V8s, saying he wanted to look forward and fix it.

Hamilton's rates are less than those of other high-growth cities and rate rises may not have been big enough in the past, he said.

Deputy Mayor Martin Gallagher said cuts and budget trimming after the V8s "perhaps, to a degree" had an effect.

"I think we're in very challenging economic times for the city. Our problem comes from growth, which is a good problem to have but it's also a painful problem to have."

He wasn't unduly surprised by King's suggestion, especially after the mayor's suggestion earlier in the year.

The 16.5 per cent is a notional increase, Gallagher said, and he repeatedly stressed it is not a done deal.

"If there has to be an increase of that magnitude, then obviously a critical debate must be looking at the viability of a staggered approach," he said.

"I'm acutely aware that we have to design a 10-year plan and a budget that people can afford."

Councillors will debate the long-term plan in December and council hopes to put it out for public consultation early in 2018.

The final vote is due to happen around June 2018.