Tauranga City Council corporate services manager Paul Davidson. Photo / File
Tauranga City Council corporate services manager Paul Davidson. Photo / File
The council will start its Annual Plan deliberations today
Big-budget council projects are being put off in an effort to keep next year's rates rise in a palatable range.
However, long-term financial issues still loom.
Today the Tauranga City Council will begin up to three days of deliberations on itsAnnual Plan for 2019-20.
The council's financial plans have moved significantly since the council signed off a ten-year budget in the middle of last year. Under that plan, this year the city would face an average 7.5 per cent rates rise.
A majority of elected members later voted to abandon that increase and strive for 3.9 per cent - CPI (Consumer Price Index) plus 2 per cent.
Piling on the pressure, in February council staff reviewed costs for planned capital projects over the next 10 years and found costs had increased $128 million over budget.
In spite of a warning the extra costs would tip the council over its debt-to-revenue ratio by 2023, elected officials rejected a recommendation by staff to hit ratepayers with a new levy to help pay down the debt.
Corporate services manager Paul Davidson, head of the council's financial team, said the new budget proposed by staff did not seek to solve the longer-term debt ceiling issue.
The Tauranga City Council administration building on Willow St. File photo
He said the council had decided it would most likely deal with that when it put together its next long-term plan for 2021.
Davidson said no projects had been cancelled in the council's efforts to bring the rates rise down for the coming year, but several had been moved backwards.
Other capital projects have spilled over from this year, or been brought forward but the net result was a $45m reduction in the capital programme for next year.
Projects to be partially deferred included new cycling infrastructure, parks and tsunami evacuation mounds.
The biggest deferral was the Waiari Water Supply Scheme, a new water treatment plant under construction in Te Puke with a pipeline to Pāpāmoa.
Work started in 2018 and the project was scheduled to be completed by 2021.
The council had expected to spend $66m on the project next year, but just under half of that - $32m - has been pushed out to the following year.
Cycle infrastructure spending may be deferred. File photo
Also deferred was more than $14m budgeted for "social infrastructure" in new growth areas.
Davidson said was mostly land purchases for things like parks and reserves in new subdivisions.
About $15.7m worth of transport projects have been deferred.
That included $4.9m set aside for implementing the council's cycle action plan, $2.1 million from the Domain Rd upgrade project, and $5.7m for upgrading street lights to LEDs.
According to a report to be presented in tomorrow's meeting, the council consulted on its long term finances and received 46 submissions. Of those, 20 argued for a smaller than 3.9 per cent rates increase, two supported that number, and 15 argued the council should up the increase. The position of the rest was unclear.
The council has up to three days set aside to debate the plans. The first day of deliberations starts at 9am today.
