Tauranga ratepayers will pay an average 13.7 per cent more in their rates bills to help fund key city infrastructure projects.
But the office of the Auditor-General has warned city commissioners that how the council plans to fund such projects could result in others being delayed or put off altogether.
The warning was given at a Tauranga City Council meeting today in which the commission signed off on the Annual Plan 2022/23, Long-term Plan Amendment 2021-2031, Rates Resolution 2022/23 and Final Development Contributions Policy 2022/23.
The 13.7 per cent increase includes a 9.2 per cent general residential rates increase ($4.82 per week) and a commercial rates increase of 24 per cent ($30.54 per week).
Annual rates include a Uniform General Charge of $252, waste collection rates of between $190 and $320, wastewater rates of $290.40 or $580.80 and optional garden waste collection rates of $70 or $100. Targeted rates affecting people in The Lakes, The Coast Pāpāmoa and The Excelsea subdivision were also approved.
Speaking about the Annual Plan, commissioner Shadrach Rolleston said the commission was mindful of the rising cost of living and inflation.
"It would be easy to pull back but in terms of when we came in, [the city] does need significant investment. I don't think we can push pause with the investment the city needs."
Commission chairwoman Anne Tolley said of the Long-Term Plan Amendment, which included the $303.4m Civic Precinct (Te Manawataki O Te Papa) plans, that the CBD was in such disarray when the commission came on board and that it was "quite sad for people who live here to see".
She also referred to the $1 million of "wasted ratepayer money" in lost productivity with council staff working between four locations after black mould was discovered at the council's Willow St site. The Civic Precinct project was expected to address this, Tolley said.
"The role of city leaders is to create an environment that people want to be in and what to see to reflect them and their history and their culture and their future and inspire private enterprise to follow up with its investment."
However, a presentation from Audit New Zealand highlighted concerns about the uncertainty surrounding the Civic Precinct plans and other key infrastructure projects.
Audit New Zealand's Clarence Susan said while ratepayers were expected to fund half of the cost of about $150m, the remainder was expected to come from Government, grants and philanthropists but this funding had not yet been sought.
Susan, speaking on behalf of the Auditor-General, referred to the council's plans to rely on the Government's Infrastructure Funding and Financing Act to progress its Transport System Plan and Tauriko West developments. If successful, these projects would be financed by an external party that would charge levies, to be passed on alongside council rates.
Whether this private financing would be affordable would not be known until later.
"If the funds cannot be secured at a satisfactory financing rate, the council is expected to then rely on debt and development contributions funding," Susan said.
"This could result in other projects being delayed or reprioritised to avoid breaching its debt limit, affecting current or future improvements to levels of service."
In response to the report and Susan's concerns, Tolley said the city council would be the first to use the Government's infrastructure fund which naturally created uncertainty.
"It is reasonable that this uncertainty is reflected today."
The 13.7 per cent rise is higher than what other cities are considering for their rates. Hamilton City Council indicated that a proposed average annual rate increase of 4.9 per cent for 2022/23. In Auckland, the proposed 2022/23 average rates increase is 4.96 per cent.
After the meeting, Mount Maunganui Residents, Ratepayers and Retailers Association's Michael O'Neill said now was not the time for certain "nice to have" projects such as the Civic Precinct.
He said too many people were already struggling to pay bills without this rates increase.
"People are really struggling. How much more can we take?"
O'Neill said while some residents would just "suck it up and take it on", others "won't be able to afford to keep living here on fixed incomes".
O'Neill said, in his view, a project such as the Civic Precinct should be delayed.
In July last year, people gathered outside a council meeting to protest the proposed 12 to 15 per cent rates increase for 2022/23.
Commissioners eventually agreed to a forecast 12 per cent rates increase but this was increased in light of the civic and infrastructure projects.
Urban Task Force chairman Scott Adams said from a developer's point of view there was no better time to build than right now, as things would only get more expensive.
Adams said the Crown needed to "come to the party in some shape or form" financially.
"As chairman of the Urban Task Force, we have always advocated for exploring alternative mechanisms for funding, rather than leaving it to developers and ratepayers. The Crown has done very well with GST out of this region over the last 20 years."
The new rate will come into effect on July 1.