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Waitaki Mayor Alex Familton's view was the council had taken ''a financially prudent approach''.
''While we consider the draft 3.5% rates increase as a fair balance between community requests and affordability, we as a community face a number of challenges over the next 12 months,'' he said.
These included changes to earthquake-prone building rules as well as recent job losses in the district's manufacturing sector.
The council had faced pressures on its budget, including lower interest rates, increased insurance, reduced roading subsidies, building code demands and continuation of water upgrades to meet Government standards. These tended to drive rates upwards and the council had to counter this by reducing existing expenditure.
Tuesday's meeting is a formal one to start consultation by calling for submissions on its 2013-14 annual plan and budget which will help the council determine what the rate increase will be.
It had projected a 4.7% increase for the next financial year, but since it started in September working on its budgets had managed to reduce that.
Of the 3.5% rise in the draft annual plan, 1.4% is for new projects to ensure the district continues to progress.
However, Mr Familton said those new projects would depend on input from the public.
The budget had much to be positive about, including advancing business opportunities for the community through expenditure on initiatives such as the Alps to Ocean cycleway, Oamaru Harbour redevelopment and North End Business Park.