The plan to charge owners who rent out their properties for short-term accommodation on platforms such as Stayz and AirBnB was labelled as "disappointing" by Cr Ben Blain at Monday's public meeting.

But Cr Debbie Arnott said she had "no problem" with the fee.

The charge is outlined in the council's draft budget for 2022-23, and Cr Blain said he found the proposed charge disappointing because he didn't believe it would create equity between hotels/motels and AirBnBs.

"What is council hoping to achieve?" he said.

Cr Blain also questions how much it would cost to enforce and what the financial benefit would be to the city.

He instead called for the council to lobby the state and federal governments to incentivise long-term rentals for the city which would lead to less airbnbs and create more housing for the city's workforce.

But Cr Debbie Arnott said it was "only a $400 a year fee" which would bring the council in line with other municipalities.

She said there were people running multiple airbnbs which meant they were in effect running a business.

"So I don't have any problem with asking for a $400 free from them," Cr Arnott said.

A $400,000 upgrade to Warrnambool's animal pound and $600,000 for a new hockey pitch are among the big ticket items in the city's $30 million capital works draft budget.

Between $1.8 million and $3 million will go towards upgrading the livestock sxchange which is on top of last year's $2.56 million budget allocation.

About $3.1 million will be spent on road renewal, a drop from last year's allocation of $3.75 million.

The budget for footpath and bike path renewal will be $1.395 million, down from $1.5 million last year.

The capital works budget also includes $385,000 for upgrading public toilets, $330,000 for playground upgrades and $400,000 for the Japan Street catchment diversion project.

Warrnambool's loans will balloon out to $14 million this financial year with the city expected to borrow $4 million for the upgrade of the saleyards and the Smart Buildings project - a green, energy-saving plan for municipal properties.

The city's borrowings are expected to increase over the next three years to $15.46 million by 2025/26.

Rates are set to rise of 1.75 per cent in line with the state government-imposed rate cap.

But waste management fees are also set to increase by 6.88 per cent, or $26.58, bringing the average rate rise to 2.7 per cent - up $56.31 to $2140.

The big jump in waste management costs comes two years after the council cut rubbish fees by $11 a year to keep the rates to just 1.2 per cent, or $23 on average.

The council will collect $44.54 million in rates during the 2022/23 financial year, up from $43.1 million last year.

Cr Arnott said the council was proposing a financially balanced budget with an underlying operating result of $1.34 million.

"We have to balance the needs of the community versus the pressures of financial sustainability," she said.

A two-hour "community conversation cafe" will be held on May 11 at the Lighthouse Theatre from 5.30pm to allow the public to give feedback on its budget plan.

Cr Angie Paspaliaris said it was a very difficult budget, possibly more so than last year's, because there were increased costs and workforce limitations - something that has impacted not just council but the entire community.

She said the council will inevitable face hardships over the coming months.

Cr Paspaliaris said she had concerns about the ongoing operating costs of Flagstaff Hill and the increase operating costs with the new library and learning hub.

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