Tauranga City Council's wage cost rise 'alarming'

Tauranga's rapid growth is believed to be behind an increase in wages and staff at local councils. Photo / Tauranga City Council

Tauranga is one of New Zealand's fastest-growing cities and local councils are spending more money on more staff, but are they spending too much? Kiri Gillespie investigates just how much of this bill ratepayers are paying, how many council staff are earning more than $240,000 and whether people should be concerned.

Tauranga City Council staff wage costs rose about $4.6 million in the last financial year and an advocacy group says people should be concerned.

Figures obtained by the Bay of Plenty Times through an official information request before the Covid-19 pandemic showed staffing wage costs had increased by about $4.6m in a year, from just under $47.8m in 2017/18 to just above $52.4m in 2019/18.

In 2018/19, just under two-thirds - about $33.6m - came from rates and the rest was cash-funded, meaning the money came from user fees, subsidies and grants. The year prior, the split was about 60:40, with about $30m from rates and $17.8m cash-funded.

The figures, released in February, translate to an increase of 9.7 per cent in staff numbers and an increase of 9.75 per cent in wages, on average. This did not include staff at council-controlled operations, such as Bay Venues.

Matua Residents Association chairman Richard Kluit says increased staff costs are a reflection of Tauranga as a growing city. Photo / File

In 2018/19, 757 people were employed by Tauranga City Council. This translated to 663 full-time equivalents (FTEs). In 2017/18, there were 690 employees - 613 FTEs.

A breakdown of how many employees there were in each salary band also reflected an overall increase, including 33 additional staff earning $80,000 to $99,000 a year.

Eight additional staff earned $140,000 to $159,999.

The figures come after elected members voted to adopt a living wage policy for its direct staff in September 2018. The move brought any council staff making less than the 2018 living wage of $20.55 an hour up to that level and was expected to cost about $28,000 a year and be paid for within existing budgets.

Last year the living wage increased from $20.55 an hour to $21.15.

Council democracy services adviser William Henry said this affected 31 employees on the living wage. There had also been 53 FTE new resources approved through the council from July 1, 2018, to June 30, 2019, he said.

Henry estimated about 35 FTEs were recruited during this time, with the remainder deferred to future financial years or removed.

The additional staff were added to areas such as building services and planning, which reflected an increase in priority and pressure identified in the 2018-28 Long-term Plan, he said.

In February, Taxpayers' Union spokesman Jordan Williams said Tauranga's ratepayers should be concerned.

"We see this across New Zealand, that councils are increasing the size of their organisations in growing personnel when their responsibility and scope might have increased a little bit.

"But we don't think it justifies growing it by 3 to 4 per cent. Nine per cent is extraordinary when wage inflation is only about 2 per cent."

Michael O'Neill from Mount Maunganui Residents, Ratepayers and Retailers said the amount of money going to Tauranga's high council wages was "alarming". Photo / File

Mount Maunganui Ratepayers' Association's Michael O'Neill said the spend on higher wages was "alarming".

"I think eight new staff on that salary [$140,000 to $159,999] is over the top. And 33 additional staff earning $80,000 to $99,000 is a concern."

O'Neill compared the wages to the average salary of qualified teachers. New secondary school teachers usually earn between $52,000 to $57,000. Despite this, he applauded the council increase for people on the living wage.

Matua Residents' Association chairman Richard Kluit said Tauranga was a growing city and, to accommodate all of the requests needed for such growth, "staff numbers must go up in proportion to this".

Kluit was reluctant to speak for other residents but said he noted the Government placing more tasks on local councils.

"There's a high expectation of doing all these new things ... but the ratepayers are expected to pick up the cost of all of that."

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Meanwhile, the number of staff employed by Bay of Plenty Regional Council rose 5 per cent last year compared with the year before.

The number of regional council staff in 2018/19 was 421, including 342 FTEs, costing $38.3m in total. Of these staff, nine earned between $160,000 to $319,999 compared with 128 (the most populated pay bracket) earning less than $60,000.

By comparison, Rotorua Lakes Council had fewer staff members than the previous two years, totalling 378 employees.

One hundred and twenty-eight staff earned less than $60,000, the most populated pay bracket, compared with eight people earning more than $200,000.

A Local Government New Zealand spokesman said unfunded mandates were a major cost burden on council budgets.

"From new compliance and enforcement measures to revised National Position Statements, councils get lumped with an increasing array of work from central government, often without any additional resourcing," he said.

"On top of a range of unfunded mandates, councils are also bearing the burden of increased infrastructure costs, particularly those in our fastest-growing areas. For example, national building costs have increased by over a third since 2009, and in the growth councils, these cost pressures are much higher."

Western Bay wages 'excessive'

Western Bay ratepayers association's Keith Hay says some wages at the council seem "excessive". Photo / File

Three Western Bay of Plenty District Council staff are earning at least $240,000 per year.

Figures obtained by the Bay of Plenty Times reveal the number of staff employed by the council has increased 7 per cent in the past year.

In a written Local Government Official Information and Meetings Act response, council's Jan Pedersen said 242 people were employed by the council in 2019, translating to 227 FTEs. The previous year the council employed 226 people - 209.5 FTEs.

The council refused to disclose how much each person and their position was paid, citing privacy. However, the council's annual report for the year showed 76 people earned $60,000 to $79,999 a year. The figures also showed three people earned $240,000 to $349,999 a year compared to just one person the year prior.

Pedersen confirmed these were salaries of the chief executive, noted in last year's annual plan as $307,515, and two staff from the council's Senior Management Team.

The breakdown showed total council staff costs ranged between $18.5m and $24.15m.

Western Ward Residents and Ratepayers Association secretary Keith Hay said rates were "a great concern for us".

In 2019, the council also made four severance packages totalling $75,957. The year prior, the council made three at a cost of $154,030.

The value of each of the severance payments made in 2019 was $40,000, $10,000, $20,931 and $5026. In 2018 this was $13,750, $45,622 and $94,658.