Water rates increase in Tauranga

Tauranga residents will be paying more in metered charges for water from July 1./File

Water rates in Tauranga are set to increase by more than 3 per cent from July this year.

Tauranga City Council released a consultation document on its new budget which included the proposed increases in water charges.

This rise was in addition to the general rates increase of 3.8 per cent - more than the 3.5 per cent suggested in the council's long-term plan.

General manager for growth and infrastructure Christine Jones said the extra funds for water supply were needed to cover increasing costs.

"The proposed water increases from July 1, 2017, are to cover operational costs as the water supply network grows," she said.

"They are not intended to pay for construction of the new water processing plant, which will need to be debt funded."

The proposed new plant was part of a plan to improve infrastructure to keep pace with increased demand for services in the city.

"Tauranga City Council's water activity is a ring-fenced business that aims to run on a break-even basis," Ms Jones said.

"Water charges cover the operational costs - and also depreciation of the infrastructure, including for water processing plants."

Water charges were $1.83 per cubic metre (1000 litres) but would rise to $1.89 from July.

The average resident used 249 litres of water per day in 2015/16.

The council expected to receive $19 million from water rates in the 2017/18 financial year, up from $17.5 million in 2015/16.

The projected revenue from water rates was $17.7 million for the current year.

The new infrastructure was needed because of population growth, according to the council website.

Tauranga's population rose from 107,000 in 2006 to 128,200 in 2016, according to Statistics New Zealand estimates.

Ms Jones said increased revenue due to a higher population would not be enough.

"Revenue increases with the population, but only gradually, and this on its own won't cover the increased operational costs that will arise once the new processing plant is commissioned."

The general rates increase would be spent on a number of new projects, including $4 million for a new visitors' centre.

Tauranga City Council also proposed increases to car parking charges, dog registration and building consent fees.

Metered water charges in Tauranga were already more than in Rotorua, Whakatane and the Western Bay of Plenty.

A number of councils around the country did not charge for water usage, instead including the cost in general rates.

Under the budget proposal, the council would still end the next financial year with a $1 million deficit.

Public submissions on the proposed plan were open until April 20.