Auckland City ratepayers will keep paying higher water bills to subsidise rates, which have been set to rise by 5.1 per cent this year.
Mayor John Banks and Citizens & Ratepayers councillors have finalised this year's budget, with rates and water bills each rising at 5.1 per cent, the council's rate of inflation.
Mr Banks has backed off an election promise to end "water price gouging" in favour of phasing out the practice over three years.
An immediate end to "charitable payments" from the council-owned water company, Metrowater, would have meant an extra 6.6 per cent increase in rates. On the flip side, water bills would have dropped by 11.9 per cent.
Former C&R leader John Strevens has accused his right-wing allies of "political cowardice" by raising water bills at the same level as rates.
"If inflation is to be chosen as the basis for the increase in price, it should be the inflation in Metrowater's costs, not council costs," he told councillors at a budget hearing.
Household rates have been set by raising fixed charges by $78 for most households. This means an 8 per cent increase for low-value properties and a 2.7 per cent increase for very high value properties.
The council has managed to reduce a planned 10.2 per cent rates rise to 5.1 per cent by cutting back the planned capital programme from $780 million to $400 million.
Many projects have been deferred or cancelled.
Consultants, however, are one of the biggest winners in this year's budget. They will pocket $62.2 million of ratepayers' money, 9.6 per cent more than the $56.7 million in the current financial year.
Mr Banks and C&R have concentrated their cost-cutting efforts on popular projects like footpaths, street cleaning and improvements to volcanic cones. Deferred projects include $7.6 million on new footpaths, $4.5 million restoring the Pah homestead and $2 million on volcanic cones.
"It is important to remember that the deferred projects have not been cancelled," finance committee chairman Doug Armstrong said.
Next year the council will also have to start finding an extra $36 million for a "world class" spending package on the Rugby World Cup - on top of $22 million of improvements around Eden Park already budgeted for.