Tauranga ratepayers could end up paying an average of $3350 to the city and regional councils this year - the equivalent of $9.18 per day.

This was more than twice the average daily rates burden reported in 2004 when Tauranga's population reached 100,000. The city's population is now about 131,500, according to the latest estimate from Statistics New Zealand.

The proposed $400 combined rates increase was driven partly by the regional council's proposal to shift all its share of running the Tauranga's Bay Hopper bus service onto city ratepayers.

It meant the targeted rate levied on each Tauranga household to subsidise Bay Hopper's operating costs would increase by $92 a year.


The regional council currently collected $18 from each regional ratepayer to help subsidise Tauranga's buses. Shifting all the costs onto city ratepayers would lift the city's public transport targeted rate from $62 to $154.

The Tauranga City Council's draft $265 rate increase did not include a proposed new targeted rate for a kerbside waste collection service.

However, the big picture could change dramatically if the city council overhauled its rating system so that businesses paid more and residents less.

The proposed overhaul was described at a recent council meeting as a ''fairer'' redistribution of rates from low-value to high-value properties. It could potentially leave more than a third of Tauranga ratepayers paying less this year - but the changes were expected to meet strong opposition from city businesses.

Papamoa Progressive Association deputy chairman Ron Melville said a $400 or 14 per cent rates rise would be ''unpalatable'' for many ratepayers, particularly households on tight budgets.

He said it was well above the rate of inflation that had been running at less than 2 per cent a year for several years.

''Both councils need to qualify the reasons for such an increase and whether residents and commercial ratepayers were getting value for money.''

Melville said ratepayers needed to make their views known or else the increases would end up being rubber stamped.

Former city mayor and the regional transport chairman Stuart Crosby was not happy with the proposed $400 increase in rates and said the two councils needed to work together to smooth out the spike for the 2018-19 financial year.

As for doubling in the daily rate since 2004, he said this was being driven by transportation pressures and the quality of infrastructure that councils had to deliver.

Crosby said population growth and rates revenue never followed the same straight line because millions could be spent in a short period of time to deliver infrastructure needed well into the future - like the city council's $100 million Southern Pipeline.

''It is big chunks of money in a short space of time, and then the population catches up. That is what is driving these big increases.''

Crosby said he still considered rates good value for money.

He said the increase in Tauranga's public transport targeted rate from $62 to $146 was driven by significant changes to the city's Bay Hopper service including a complete route redesign and increased frequency of services. The council would also retain a lot of the School Hopper services.

Crosby said the decision to fund all the regional council's public transport share from targeted rates was a case of ''where the costs lie''. Previously some of the costs of running the Bay Hopper service had come from the regional council's investment income in the Port of Tauranga.

A recent meeting of the regional council saw the 12 per cent increase in the region-wide general rate described as ''a little bit scary''.

Councillors have agreed to establish a new targeted rate to fund the Bay's Civil Defence emergency management in order to achieve ''greater transparency and accountability''. The costs were currently met from the region's general rate and by contributions from local councils.

Proposed average rates increases for Tauranga 2018-19
City council: $2965 (up 9.7 per cent from $2700)
Regional council: $392 (up 59 per cent from $248)

Tauranga average rates growth versus population growth
2004: Combined city and regional rates $1460 or $4 a day (popn 100,000)
2018: Proposed combined city and regional rates $3350 or $9.18 a day (popn 131,500)

Proposed regional council rate rise for Tauranga
General rate: $217 (up $32)
Public transport: $154 (up $92)
Civil Defence: $21 (up $21)

Proposed funding sources for public transport in Tauranga*
Subsidies and grants: 38 per cent (current budget 39 per cent)
Targeted rates: 34 per cent (currently 20 per cent)
Fares and advertising: 28 per cent (currently 25 per cent)
General funds across all Bay ratepayers: Nil (currently 16 per cent)
*Averaged over regional council's 2018-28 Long-Term Plan