New Tauranga draft Annual Plan proposal would cut some rates bills

Tauranga mayor Tenby Powell. Photo / File

A draft average rates rise of 4.7 per cent has been signed off for community feedback by Tauranga City Council.

And due to a rejig of how the overall rates burden is apportioned, some homeowners could see a rare drop in their next rates bill.

Commercial landlords, on the other hand, face a steep rise.

The public will have the next two weeks to comment on the rates rise and revised draft Annual Plan 2020-21.

This revised plan has $11 million slashed from the operating budget on the back of an expected $14m drop in revenue post-pandemic.

The average 4.7 per cent rise was a far cry from the 12.6 per cent the council proposed in March and the 7.6 per cent in the first draft of the Annual Plan, agreed before the economic impact of Covid-19 was understood.

The council approved the revised draft unanimously in a meeting today.

The Bay of Plenty Regional Council has proposed not to increase its rates.

All this would mean that, for the owner of a median-value ($650,000) residential property, next year's rates bill would go up $23 in total or 44c a week.

Owners of lower-value properties would see their rates go down. The owner of a $525,000 home would save $32 compared to the last financial year, and for a $320,000 home the rates cut would be $122 a year.

A table laying out the impact on rates of the proposed rates rise. Graphic / Tauranga City Council

The opposite would be true for commercial property owners.

A commercial property worth $550,000 would pay another $139 a year, a median value commercial property ($1.07m) would pay another $485, rising to $1109.68 for a $2.01m property.

This was largely the result of the council increasing the commercial differential - how much of the rates burden commercial ratepayers pay compared to residential ratepayers - to 1:2.1.

For years now, Tauranga residential ratepayers have paid a bigger share of the burden than they would in other cities.

Councillor John Robson. Photo / File

Councillor John Robson said this was a "historical anomaly" the council needed to right, though it was a shame it was coinciding with Covid-19.

Tauranga mayor Tenby Powell described the council as "insolvent".

"If it was a business we'd be calling the receivers now."

He said putting up rates gave the council an opportunity to address that situation while stimulating the economy, creating jobs, building "desperately needed infrastructure" and showing central government it could be a "rational co-investment partner".

"We can no longer kick the can down a bumpy financial road.

"Let's remember this and 'fix the bloody road'," he said, borrowing the catchcry of colleague Andrew Hollis' campaign to upgrade State Highway 2 .

- You can work out your estimated proposed rates bill on the council's website.

Have your say

• Public consultation will open tomorrow and close on July 1.

• You can make a submission via the council's website, email, post, or by picking up a submission from council offices and libraries.

• In-person submissions will be heard between July 2 and 7.

• The council will deliberate between July 15 and 17 and adopt the plan by July 30.