The City of Yellowknife has released its draft budget for 2018, and it comes with a hefty tax rate increase of 5.64 per cent.

City staff say the proposed increase is necessary, in part, because of historic underfunding from the government of the Northwest Territories to the tune of $11.4 million a year.

"This has a huge impact on the city's ability to deliver services and infrastructure," said Sharolynn Woodward, director of corporate services, at a council meeting on Monday.

"Continuing to do more with less is especially challenging in light of the tremendous [population] growth the city has experienced over the past 15 years or so, all of it requiring additional infrastructure."

Woodward says the proposed tax increase is also needed to offset the rising cost of goods and services, aging infrastructure, and to address social issues through initiatives like the city's homelessness employment program.

In total, the city is looking to spend $77.5 million in 2018, including $360,000 for street outreach services, $50,000 for the day shelter, and nearly $5.5 million for water and sewer infrastructure.

City officials provided some examples of the impact the proposed tax hike would have. For a property valued at $250,000, the city puts the property tax increase at about $85 each year. A property valued at $650,000 could see an increase of more than $200.

Residents can weigh-in on the proposed budget through an online survey on the city's website, at two open houses on Nov. 8, or at a public presentation of the budget on Nov. 20.

Final budget deliberations begin Dec. 4.