Bayfair underpass funding will add to rates bills

People at the Bayfair underpass protest in August last year. Photo / File

Tauranga City Council's contribution to a central Government transport project will cost the average ratepayer just under $1 a year.

Today the council clarified how much money it will put towards keeping the Bayfair underpass, or a suitable replacement, and made public information from a closed-door meeting where the funding was agreed.

The underpass was slated for removal as part of the $120 million Baylink project, after the cost to retain it blew out, but community protests forced the Waka Kotahi NZ Transport Agency to look for alternatives.

Last week the council said it had approved "up to" $2m in funding towards keeping the underpass or a suitable alternative crossing for pedestrians and cyclists. This was approved in a closed-door meeting late last year.

In a statement today, strategy and growth general manager Christine Jones said the council had agreed to contribute $990,000 to the construction of an underpass.

The funding was conditional on the transport agency agreeing to retain an underpass, or build another suitable grade-separated crossing solution for State Highway 2 at Bayfair.

She said the council's contribution "would likely attract NZTA subsidy funding", which could provide a further $510,000 to $1,020,000 towards the project.

Today's statement also confirmed the council contribution would be debt-funded. The loan would be financed by a debt retirement charge at a rate of 4 per cent a year.

Council corporate services manager Paul Davidson told the Bay of Plenty Times the charge was essentially a rates increase that would go towards paying down the loan over time.

He said it would add less than $1 a year to the average residential rates bill.

Provided the agency agreed to go ahead with an underpass or suitable alternative, this would come into effect in the next financial year.

The council also clarified an error in a previous statement about its contribution to the underpass funding.

In an earlier release, the council said the funding would go towards "investigations" into keeping an underpass.

Jones told the Bay of Plenty Times today this was not correct. The money was for construction, not investigations.