Councillors also sounded the alarm on the city's finances saying they were a "mess" and warned that they were in such dire financial straits that without a rate rise it could make the council's bottom line worse in years to come.

Cr Ben Blain, who last week backed a rate freeze, said proposed changes in the budget to the all-day parking fees - which will rise from $3 to $4 - would mainly hit CBD workers, costing someone working five days a week an extra $250 a year for parking.

"Shoppers have the option of where they can shop, but workers can't pick their place of employment," he said.

He said he felt for the CBD businesses and workers who were being hit with a parking rise and a rate rise at the same time.

The budget proposes one hour of free parking in the CBD's off-street car parks at any time during the day, but parking in the one, two and four-hour zones is set to rise from $1.40 to $2 an hour.

"Is one-hour free parking really long enough for an ageing population and our CBD supposedly being a shopping destination? Will that keep the shopper in there?" he asked.

Cr Blain implored the community to take a good look at the budget and provide feedback because everything in the budget could be changed and nothing was locked in.

He also asked the community to consider if they were happy with the rise in waste charge when they were "losing half" of the domestic pick-up - with the rollout of the city's four bins, rubbish collection is changing to a fortnightly pick-up.

Cr Debbie Arnott told Monday's public meeting there was no doubt that every councillor would have liked to freeze the rates, but the council "simply have not got the money to do that".

"We all have strong feelings for the community and what the community businesswise, personally have suffered because of COVID-19, the fact of the matter is though, Warrnambool City Council is in a dire financial situation," she said.

"If we don't give the 1.5 per cent rate rise, if we freeze rates, and this needs to be stated so everyone hears this, it would cost council $600,000 a year.

"That $600,000 a year is an accumulative rate, so at the end of five years it will cost council $3 million.

"We do not have that sort of money."

Cr Arnott said the 1.5 per cent rate rise was the equivalent, on average, to $32 per year or 65 cents a week.

She said the council was carrying a debt of $14 million and the council's assets had fallen into "absolute disrepair".

"We have to find money for asset renewal. No you're not going to see any shiny new projects with this council. We need to be prudent and we need to be very careful," she said.

"I think it is also worth noting that of every $100 that council collects, council keep $3.50. It doesn't sound very much does it?"

Cr Arnott said the council had worked diligently to have a financial and sustainable council.

Cr Max Taylor also expressed concern about the rise in the rates, but said a recent bus tour councillors had taken of the city's run-down assets - such as the breakwater, promenade, RSPCA, AquaZone and saleyards - had driven home the council's financial dilemma.

"It became concerning to me that a lot of those assets have depreciated a lot in maintenance, and require substantial money to upgrade them," he said.

Cr Taylor said the rate rise would give the council some scope to fix assets the way they should be.

"The swimming pool is now 60 years old and has had very little money spent on it over the years," he said.

"We need to spend some money on upgrading these assets and, without a rate rise, it'll be very hard for the council to upgrade some of these assets."

Cr Richard Ziegeler said he had voiced quite strongly during councillor briefings that he didn't want to put rates up 1.5 per cent.

"The difficulty is that we have been left with a budgetary mess," he said.

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"We're in a difficult financial position, and it would be irresponsible of us, I believe, not to take care of the folks who will struggle if rates go up."

He, and Cr Angie Paspaliaris, said the council had now made it easier for those under financial strain to get rate relief from the council.

Cr Ziegeler said feedback from ratepayers so far was split between those who don't want a rate rise and those who want the council to be financially sustainable.

Cr Angie Paspaliaris said there were aspects of the budget she agreed with but was personally hesitant about any rate rise, even by CPI.

"Given the impact of COVID over the last 12 months I believe that some relief could still be extended to ratepayers and business in Warrnambool that have a tough time, many of whom I assume are still trying to catch up," she said.

Cr Paspaliaris said council is, and has been, in a poor financial position for many years.

"So balancing the organisation's financial sustainability is also a priority," she said. "And I do see how this becomes a difficult decision.

"This group of councillors, as a whole, has inherited a mess in more ways than one and must try to balance spending with income."

She said the asset renewal gap needed considerable and consistent attention.

Cr Paspaliaris said she was encouraged by some of council's waste management initiatives that would continue to hopefully help drive fees down.

The public can now provide feedback on the budget which won't be adopted until June 28.

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