Wellington's mayor says the city's in good shape despite spending millions after the Kaikoura earthquake.

Justin Lester has this morning delivered his first State of the City speech.

He said the council's forked out more than five million dollars in emergency spending due to the November quake, but the books are still looking good.

Mr Lester has been focused on spending less since becoming mayor and said they've already found more than 11 million dollars in efficiencies.

He said this is from the likes of re-prioritising and re-phasing capital expenditure, better utilisation of council space and increases in energy efficiency.

Because of the savings, rates will increase by 3.3 percent this year - rather than the forecast 5.1 percent.