Tauranga City Council budget out for feedback with 3.9pc rates increase

The Tauranga City Council's annual plan for 2019-20 is going out for consultation. Photo / George Novak

Tauranga City Council has signed off its draft budget for the next year for consultation with a 3.9 per cent rates increase.

While councillors were pleased to see a controversial swimming/spa pool registration fee of $136 dropped, few had anything good to say about the council's long term financial position when they signed off the document - the draft Annual Plan 2019-20 - for community feedback this afternoon.

Larry Baldock, Max Mason and Terry Molly generally agreed that in an effort to keep the rates rise lower, the council had effectively kicked looming debt problems down the road.

Baldock warned that cost-cutting to keep rates rises down, as happened in this and previous years, would lead to services being reduced and called for a community debate.

"If that's what the city wanted then they should come and tell us."

While basic infrastructure was needed, so too were community facilities, he said.

Councillor John Robson said the opportunity for a debate was missed when the council consulted on it's Long Term Plan - a budget for the next 10 years - last year as the process was full of distractions.

He said he concerned about the Annual Plan debate being politicised and driven by ideology, and about hearing the rate rises had been kept low for years when Tauranga was among the highest rated New Zealand cities.

Both Robson and Mayor Greg Brownless called for the Government to review local government funding, saying it was not fair to burden ratepayers with the spiralling costs of growth while the Government collected most of the revenue through GST.

Steve Morris called for the council to use plain English when taking the plan to the community and call what it was - a budget.

"We are going to spend their money on these certain things, what are your thoughts on that."

A debate was needed about the council's debt and spending, he said.

Last month councillors learned the cost of several major growth-related projects had increased to $128 million more than budgeted.

The extra costs and associated borrowing would push the council over its debt-to-revenue ratio, which would drive up its interest rates.

The council rejected a proposal by staff to hit ratepayers with a new levy to raise enough revenue to partially avoid the situation.

In a statement, Brownless said the council wanted feedback from the public as to what the council should do about the debt situation and the extent to which the council should address it now.

One option was a higher rates increase - such as the 7.5 per cent forecast - for this year and using the additional income to repay debt.

Consultation schedule

- Opens on Saturday
- Closes at 5pm on April 23
- Plan and submission forms available at tauranga.govt.nz/annualplan2019 from Saturday
- Hard copies available at libraries and the council service centre on Willow St.