A neighbouring mayor has urged Tauranga City Council to hike rates by 17.6 per cent to get the city's transport network back on track.

This morning Western Bay of Plenty mayor Garry Webber presented to a meeting of the council's Policy Committee, which is set to debate the council's draft annual plan today.

"Grow some balls and get on with it," said Webber, who was struggling to remain "diplomatic".

He said he was quoting an 82-year-old woman from Greerton who attended a recent public consultation about future planning.

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Webber said the council needed to start with the 17.6 per cent rates increase that was one of the options staff had put together.

"Some of us have been saying that to Tauranga City for nine years."

His approach, he said, was to look at the rating base - including the average house value of $660,000 - and make the "hard decision".

"That's why the Western Bay of Plenty is quoted as having the highest residential rates in New Zealand. It's not a place we are proud to have but we are proud of our assets and proud of our district.

"You have got to do your bit to show the people - and this is central Government - show you are prepared to do your bit.

"The Western Bay of Plenty spent $660 million on roading over the last 10 years. We had to do it. Our rates increased in 8s and 9s [per cent] for five to six years ... and we have been okay. Never has a mayor been tipped out at election.

"To say you can't put the rates up because you won't be re-elected, that doesn't wash in our part of the world."

He said Tauranga, as a partner with his council and the Bay of Plenty Regional Council in the Urban Form and Transport Initiative, had to hold up its end of the bargain, or risk both central Government and regional partners pulling out of co-funding arrangements.

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Tauranga mayor Tenby Powell. Photo / File
Tauranga mayor Tenby Powell. Photo / File

Tauranga mayor Tenby Powell said he and Webber had lunch with Sir Brian Roche, head of infrastructure for the NZ Transport Agency yesterday and the message was clear about the $900m in recently-announced government funding for the Western Bay of Plenty sub-region.

"If you guys cannot make a decision at Tauranga City Council and cannot continue to work collectively with Western Bay of Plenty and Bay of Plenty Regional Council you will not get that money.

"That $850m or $900m, whichever way you want to cut it, is at risk.

"If we don't move this city forward, we will not be part of sub-regional funding in the future."

Councillor John Robson said analysis showed Tauranga had the highest average (mean) rates of the metropolitan councils - higher than Auckland, Hamilton, Wellington, Christchurch or Dunedin.

Today's meeting has started with a series of presentations by staff and experts. It will be followed by debate.

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Pulling levers

Budget options prepared by council staff for elected members to consider in today's meeting.

Option one: December resolution
- Reduced capital programme and cut lower priority projects by $33m
- $4.3m drop in operations spending
- $661m debt at year end
- 5.1 per cent rates increase

Option two: Constrained capital investment
- Reduced capital programme and cut lower priority projects by $24m
- No drop in operations spending
- $671m debt at year end
- 7.6 per cent rates increase

Option three: Prioritised capital investment plus limited debt management
- Some prioritisation of capital programme
- Option to add back $6m of deferred capital projects
- $691m debt at year end
- 12.6 per cent rates increase, including 5 per cent debt management

Option four: Prioritised capital investment plus debt management
- A larger capital programme than other options
- Option to add back $32m of deferred capital projects
- $709m debt at year end
- 17.6 per cent rates increase, including 10 per cent debt management.

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Source: Tauranga City Council

Rising costs

Since December, tens of millions of dollars have been added to the estimated budgets in several projects, including:

Waiari water supply project
This new water treatment plant is now expected to cost at least $177m. The cost has been steadily rising since work started, jumping $15.5m since December. Increases have been blamed on worse than expected ground conditions, risk and cost forecasting, market response to tenders and peer reviews by council and Crown-appointed advisers.

Wastewater in the west
The council is facing an additional $26m over three years in wastewater reticulation costs in the west of the city - including to service land for a proposed new GIB factory.

Carparking building
The budget to finish the half-done Harrington St carpark building has been increased from $5.9m to $10m to fix construction issues that forced work at the site to grind to a halt last year.

Weather tightness
The council says it has significantly upped the amount it has set aside to pay out weather-tightness claims.

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Bay Venues
The council's facilities arm has requested another $2.37m covering increased budgets for operations, renewals and capital projects.

Source: Tauranga City Council