The $175 million in funding will be repaid by a levy applied to almost all properties in Tauranga. Photo / Mead Norton
The $175 million in funding will be repaid by a levy applied to almost all properties in Tauranga. Photo / Mead Norton
In a New Zealand first, Tauranga City Council has been given the go-ahead to borrow $175 million via a Crown entity to help fund 13 transport projects, helping the fast-growing city stay within its debt limits.
The money will be paid back gradually in annual levies on almost all propertiesin Tauranga - about 60,000 residential and 4000 commercial properties.
Among the projects to be funded are a CBD transport hub, improvements to roads around the Port of Tauranga, upgrading 15th Ave and Turret Rd, and infrastructure to support new housing in Tauriko West.
Tauranga will be the first city to use the Government’s Infrastructure Funding and Financing Act (IFF), which allows local government to borrow money for construction from private markets through a Crown-owned entity - taking the debt off the council’s balance sheet, the Government announced on Friday.
Tauranga ratepayers will start repaying the money in mid-2024 via an annual levy.
Council strategy, growth and governance general manager Christine Jones told the Bay of Plenty Times the levy would replace part of the council’s targeted transport rate, which would decrease substantially.
Overall, the levy and rate cost together would “not be materially different” for ratepayers to what they would have paid in rates alone, she said.
The levy is intended to target those who would benefit from each project, but Jones said all bar one project had been independently assessed as benefiting the whole city.
The outlier was the State Highway 29 upgrades at Tauriko, meaning only a “proportional amount” of its cost could be financed through the IFF.
The estimated first-year levy for a median-valued home was $68, rising to $80 in 2029/30 and $95 in 2034/35.
A median commercial property would start off paying an estimated $521 in 2024, rising to $618 in 2029/30 and $730 in 2034/35.
Housing Minister Dr Megan Woods. Photo / Mark Mitchell
Infrastructure Minister Grant Robertson and Housing Minister Megan Woods announced Tauranga’s eligibility for the IFF on Friday.
“The Western Bay of Plenty is one of the fastest-growing regions in New Zealand with growth projections showing, on average, hundreds of people are moving there each month,” Woods said in a statement.
“The 13 projects that will be part-funded through the new model are focused on finding solutions for the challenges related to housing, transport and urban development.”
Tauranga City Commission chairwoman Anne Tolley said in a statement the “first of its kind” IFF funding arrangement meant the finance raised would stay off the council’s balance sheet.
“[This provides] the flexibility we need to fund other infrastructure and community amenity projects within our existing debt limits.”
Tolley said IFF funding would also mean the need to use rates income to repay debt would be reduced.
“The cost of the borrowings will be spread over the life of the [transport] projects, so that the people benefiting from them will be contributing more to the financing costs.”
The IFF process will see the funds raised by a Crown-owned entity, with repayments funded by a levy on all eligible properties across the city.
These levy estimates were lower than the council had projected when it consulted the community on the IFF proposal earlier this year.
Tauranga City Commission chairwoman Anne Tolley. Photo / Mead Norton
Tolley said the council had also consulted on using the IFF to pay for the infrastructure needed for the development of up to 2000 homes in Tauriko West, but this was now not likely to progress.
“In our most recent Long-term Plan, a targeted rate was introduced to fund capital expenditure in the year it is incurred, rather than spreading the cost over time.”
Jones said the IFF funding would replace a large portion of the projected Transport System Plan targeted rate and with a levy.
“From a ratepayer perspective, there’s very little cost difference in the Transport Systems Plan IFF levy compared to the Transport Systems Plan targeted rate.”
The 13 eligible Tauranga City Council projects are:
Hewletts Rd sub-access area – Transport infrastructure works in the Hewletts Rd project area to improve access to the Port of Tauranga and Mount Maunganui.
Connecting the People 15th Ave to Welcome Bay – Transport Infrastructure works on the route between the city centre fringe and 15th Ave, Turret Rd and Welcome Bay to improve access to and from the Te Papa peninsula and city centre.
Tauriko West enabling works package – Transport infrastructure works to support new urban development and housing in Tauriko West, while also supporting the inter-regional freight movement function of SH29.
Cameron Rd multi-modal upgrade stage 1 – Transport works (including public transport, cycling and walking) on Cameron Rd between Harington St and Tauranga Hospital.
Cameron Rd multi-modal upgrade Stage 2 – Transport infrastructure works (including public transport, cycling and walking) on Cameron Rd between 15th Ave Tauranga Hospital area and through Barkes Corner to integrate with Pyes Pa Rd.
Cameron Rd corridor connections – Transport infrastructure works to improve access to Cameron Rd to support the use of bus, walking and cycling facilities delivered in the stage 1 and 2 upgrade works.
Primary cycle route facilities (Accessible Streets Area A) – Improvements to walking, cycling and public transport facilities in Mount Maunganui, Papamoa and the CBD.
Primary cycle route facilities (Accessible Streets Area B) – Improvements to walking, cycling and public transport facilities in Otūmoetai, Bellevue and Brookfield.
Tauranga Crossing bus facility improvements – Transport infrastructure, including a public transport hub, to support multi-modal access to and from the Tauriko commercial area in and around Tauranga Crossing.
City centre transport hub – Transport infrastructure, including a public transport hub and support for active transport modes, to support multi-modal access to and from the city centre.
Barkes Corner to Tauranga Crossing multi-modal (local road component) – Transport infrastructure works to improve public transport connections between some local roads and SH36 on the corridor between Cameron Rd and the Tauriko commercial centre in and around Tauranga Crossing.
SH2 revocation (Cameron Rd to Bethlehem) – Transport infrastructure works to support improvements to local roading networks to integrate with the revocation of the existing SH2.
Maunganui Rd future-proofing – Infrastructure upgrades to roading, cycling and pedestrian facilities to improve safety and speed management. Enables improved connections to and parking amenities at Blake Park and Mt Maunganui College.
