Tauranga's 9.4% rates increase 'appropriate' - Commissioner

Tauranga residents will pay an average of $5.38 extra per week in rates from July. Photo: Tauranga City Council via LDR

Tauranga residents are facing a rates rise of 9.4 percent from July, but the council was still "losing ground", as this was lower than the costs it was facing.

Tauranga City Council set its rates for the 2023/24 financial year at a meeting on Monday.

The median rates increase for a residential property, not including water rates, is 9.4 percent. However if water rates are included (which were reduced), the median rates rise is slightly less, at 7.2 percent.

In dollar terms, the median residential rates, excluding water, increases from $2978 to $3258 or $280 per year. An increase of $5.38 per week.

The median rates increase for a commercial property is 18 percent, the median commercial rate increasing from $8141 to $9645, or $28.93 extra per week, equating to $1504 a year more.

Commissioner Stephen Selwood said the council's inflation rate was running well above 7 percent. Photo: Sun Media / John Borren via LDR

Commissioner Stephen Selwood said the rates increase was consistent with what was set out in the long-term plan.

It was important to note the council was "losing ground" with this rates increase, he said.

"Our [the council's] inflation rate is running well above the 7 percent rate, particularly on infrastructure."

He said the council recognised there was "pressure right across the community" in terms of the cost of living crisis.

"Hopefully this decision on the rates today, will be seen by the community as council's acknowledgement that we have to manage costs.

"[The increase] was appropriate this year but, I think we have to acknowledge that we can't continue to run our rates increase less than the rate of inflation that we're facing," Selwood said.

"We can't continue to keep these rates increases low in the face of inflation rates that are in the range of 14 to 20 percent on some of our infrastructure projects."

Commission chair Anne Tolley the council was "going backwards" by adopting these rates. Photo: Sun Media / John Borren via LDR

Commission chair Anne Tolley agreed that the increase was "probably less than inflation".

"It is timely given what's going to be a very difficult year for everyone."

She said the council was "going backwards" by adopting these rates.

"You just have to look at that BVL [Bay Venues Limited] and the legacy of underinvestment.

"You not only pay in the short term, but you also build that bow wave ahead of you. That then means that's a considerable chunk to try and catch up.

"It was the right thing to do in this year. It does make it tougher for the ongoing years, but it is the right thing to do," Tolley said.

Bay Venues is a council-controlled organisation that manages community facilities in the city.

The rates rises came without feedback from community this year because the council opted not to consult on its 2023-24 Annual Plan, that was adopted in May.

The reasons for not consulting were there were no "significant" changes between it and the 2021-31 long term plan (LTP) and to reduce the staff time spent on it, according to a report by finance manager Kathryn Sharplin.

The rates would apply from 1 July with the first instalment due by 31 August 2023.

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