Hamilton ratepayers should steel themselves for substantial rate rises despite city councillors carving millions of dollars from draft annual plan budgets.

Walking and cycling projects, land acquisition, wastewater development, and even council staff job security emerged as the biggest casualties on yesterday's first day of the two-day annual plan deliberations.

A raft of fees and charges were increased, a swag of projects were deferred or deleted, while council management were adamant they could prune $400,000 from their annual wage bill – despite several councillors arguing that was a silly thing to do.

But most councillors signalled they would prefer any savings to go to debt reduction and address a glaring gap in depreciation funding rather than limiting the rate increase, given the council risks its credibility and credit rating if it breaches financial policy limits.

Further, most of the pruning to date has come from items which were funded by loans or development charges rather than rates.

A 6.9 per cent rate increase was the starting point for discussions, although the final figure could conceivably end up above 8 per cent by the end of the process if yesterday was any indication.

Mayor Julie Hardaker called it the most significant annual plan process in the past decade, while acting chief executive Blair Bowcott said it was the most comprehensive he had seen in his time at the council.

"Business as usual is not good enough," Ms Hardaker said. "We have to cut expenditure, we have just got to accept that."

She urged councillors to avoid politics as they did a line-by-line grind through papers and reports thick enough to serve as pavers in Garden Place.

But you can't completely take the politics out of politics, and councillor Martin Gallagher opened by recalling how council candidate Tania Hennebry had been shouted down at election meetings for saying the council was facing a financial crisis.

"In October we did not have a sense of how serious the situation was," he said. "If not, why not? Why is it only now we have found out we are in this situation? What has changed?"

Councillor Peter Bos reminded his colleagues public feedback would play a big part in final determinations. "The people will tell us if they like the taste of spinach or the chocolate cake," he said.

Over $1 million was shaved from pedestrian and cycle network improvements scheduled for later this year, the Mangaiti cycleway-walkway was deferred, and the axe was also hovering over Te Awa north and Hikuwai cycleways.

But Mr Gallagher warned councillors they could reasonably expect public scrutiny over axing projects with a strong safety theme. "You spent on Claudelands and a car race – what are you doing to keep kids safe on the way to school?"

Councillor Daphne Bell agreed, saying it was becoming harder to cross Hamilton roads with all the cars.

"Increasingly only the young, the nimble, and the drunk can do it."

Pippa Mahood battled unsuccessfully to halve the suggested $400,000 council salary budget, saying it did nothing for staff morale.

But councillor Ewan Wilson opposed a figure "plucked from the sky". In the closest vote of the day, councillors rejected a Wilson amendment to axe $130,000 of the $430,000 allocated to the Economic Funding Development Agency, with $30,000 of it instead going to a council-controlled economic development promotion fund.

After Mr Wilson suggested Mayor Hardaker had a conflict of interest she vacated the chair to allow Gordon Chesterman's debut as deputy mayor. When the vote was locked 6-6 he used a casting vote against the amendment.

That was no surprise, given he had earlier expressed his discomfort with "making policy on the hoof" without discussing the matter first with a contracted partner.

Councillor Roger Hennebry led the charge for rates reductions, saying he found even a 4 per cent rise unacceptable. He would not depreciate assets such as stadia, but revisit them in about 20 years' time.

Mr Chesterman said the council needed to shift its thinking "more fully to user pays".

DEFERRED OR DELETED PROJECTS INCLUDE: Land acquisition $1.827 million. Riverside walk-cycleway $728,000. Peacockes wastewater trunk $2.408 million. Bus lane cameras $55,000. Pedestrian cycle network improvements $1.015 million. Rototuna wastewater $100,000. Gallagher Pool upgrade $142,000. New vehicles and plant $120,000.