Tauranga's Historic Village has run up an operating deficit of $1 million over the last five years, city councillors were told today.

The losses were disclosed by council financial controller Kathryn Sharplin in a report on proposed changes to the council's policy controlling revenue and financing.

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Her report said one of the options proposed for the review of the village was rates funding for the village.

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The council's current policy was that the village paid its own way without subsidies from ratepayers.

The council today agreed to go out for public consultation on allowing rates to fund up to 50 per cent of village costs. The proposal will form part of the 2016-17 Annual Plan.

Chief financial officer Paul Davidson said the village had been running at a deficit for the last five years and a number of options were being investigated.