Growth blamed for rates rise

Council is seeking public advice on the rates rises. Photo: Supplied

The Council is seeking public consultation on an Annual Plan involving an average rates increase of 3.8 per cent for households.

For Tauranga homes it means a rates increase of between $67 and $98 a year depending on the property value.

A $400,000 property will have a rates increase of $71 for the 2017/18 year, a $500,000 property $76 increase $600,000, $80; $800,000, $89, and a $98 for the million dollar properties.

The council is seeking public consultation because while the proposed Annual Plan budget for 2017/18 is based on year three of the 2015-25 Long Term Plan, changes are proposed to the budgets as set out in the LTP to reflect revised economic and business conditions.

In particular, growth is now estimated at three per cent which is above levels assumed in the LTP and has implications for both capital and operational budgets.

The $154m capital programme is the biggest in the last ten years, says chief financial officer Paul Davidson.

Infrastructure pressures from the continued high levels of growth continue to put pressure on debt levels.

Following today's approval of the Plan by Council, the consultation period for the Annual Plan 2017/18 will run from 8am March 20, 2017 to 5pm April 20, 2017. Consultation on the Statement of Proposal will be held concurrently.

Included in the $154 million is half of the $4 million spread over two years to deliver a new Visitor Information Centre at Coronation Park by summer 2018/19. This will be 50 per cent funded by rates, and 50 per cent via the targeted economic development rate on commercial properties.

As the full cost to deliver an iconic building is estimated at $5m, Tourism BOP with Council support will investigate external funding options to deliver the building as per the concept design. The $4m will allow the city to build the Centre based on a more basic design, should it fail to secure external funding.

Other capital works:

Sludge pond decommissioning at Te Maunga wastewater treatment plant, $6m.

• extension of Tauranga airport terminal, $4.6m.

• structure plans for new urban growth areas, $1.6m.

• new Papamoa Community Surf Rescue Base, $950,000 contribution.

• floodlighting at Bay Oval regional cricket ground, $765,000 contribution.

• third hockey turf at Blake Park, $600,000 contribution.

Two Mainstreet organisations have asked for increases to their targeted rates above what was previously requested and budgeted through the Long Term Plan:

Mount Mainstreet is requesting a 10 per cent increase to develop their branding and meet increasing administration and design costs for events and generic advertising. This means an increase from $148,077 in 2016/17 to $162,877 in 2017/18.

Papamoa Unlimited proposes a 100 per cent increase of the targeted rate to be able to run more events and improve the marketing initiatives they undertake on behalf of local businesses. This would mean an increase from $25,000 in 2016/17 to $50,000 in 2017/18.

Council is planning within its financial strategy limits for debt and the debt to revenue ratio. However, the increase in debt to fund infrastructure earlier than in the LTP means the 2017/18 debt level and debt to revenue ratio are higher than they were in the Long Term Plan.

                     LTP Budget 2017/18                 Annual plan proposed 2017/18

Rates                               $131m                                     $134m

Other operating revenue including water rates of $19m    

                                            $61m                                     $72m

Subsidies and grants received for capital

                                             $6m                                       $7m

Total operating revenue

                                        $198m                                   $213m

Operating expenditure

                                         $193m                                   $214m

Surplus/ (deficit)             $5m                                       ($1m)

Rates increase average after growth

(Increase is net of a 3% growth factor)

Deby summary net debt July 1 2017,

                                           $386m                                   $360m

Net debt June 30 2018     $427m                                   $462m

(About 65% of debt is funded through rates. The rest is funded by development contributions or user fees.)

Increase in net debt from 2016/17  

                                                 $41m                                   $102m

Debt/revenue ratio             215 per cent                       221 per cent

(Includes capital funding for NZTA renewals and rehabilitation funding as per the LTP).

Capital investment               $123m                                   $154m

(Excludes vested assets and land sales).

Development contributions $20m                                 $24m



10 Comments

unnecessary spending

Posted on 15-03-2017 14:01 | By phoenix

Listen up ratepayers! Forever and a day,council candidates have promised to cut spending on wanted not needed projects.once elected these peoplebecome a law unto themselves. Only ONE candidate in the western bay district council,was willing to sign a declaration to back his promise,unfortunately, he missed out on being elected mayor.Perhaps people should take more notice of that commitment,at the next election.

Srewed

Posted on 15-03-2017 12:35 | By rastus

I hate to keep repeating myself but if you just opened your eyes you would see that this is happening all over the world - what we need is a Trump like figure who accepts no bull - tells the left wing greenies where to go - sticks it to the so called politically correct - so many minor groups hiding behind the evil work of the UN and their 'Agenda 21' are slowly but surely screwing us all and no one seems to be too bothered to get out there and do something positive to combat this evil cancer that is engulfing common sense people.

Mayor is fed nonsense

Posted on 15-03-2017 09:12 | By nerak

and those who voted him in hoped he would be able to sort out the lies from a team of elitist wannabes who are capable of disguising/twisting numbers to hide the fact they will be gunning for a pay rise on the rate rise. The same team who fancy brand new offices. Agree with Maccka, where are the brakes the Mayor was going to apply. Start with a new CEO, who will do the job correctly, which will start with a major staff cull, and well sort out plenty of overspending across the whole of council. A managerial review of a staff member many years ago this person has aspirations well above their station very much applies here.

Why do we have unfunded growth?

Posted on 15-03-2017 08:36 | By Chris

Why is the council allowing growth to occur unfunded? Developers should be paying for the growth impact they cause - why is the council subsidizing this private business?

Here's your consultation

Posted on 15-03-2017 08:34 | By The Sage

Get rid of the Consultants and useless organisations such as Priority One, who all have their hands out and are contributing nothing but air to local economy.

Growth is never an excuse!

Posted on 15-03-2017 07:45 | By leighmac

We hear this comment all the time from Councils, the truth is this, More people does equal Growth and more people equals more rate payers and pockets to share the financial burden!Even the most basic business minded understand that more turnover equals cheaper services. I am involved in supplying Services to these Councils and I can state that the more customers the cheaper it gets. May be these Council pointyheads don't understand this basic fact!!

More efficiency

Posted on 14-03-2017 19:13 | By Johnney

Growth means opportunity to be more efficient. Growth should be self funding with impact fees and levies and extra rates revenue. I haven't seen the airport busting at the seams so why do we need another $4M spent . This also should be self funding.

Just

Posted on 14-03-2017 18:55 | By Capt_Kaveman

Screw everyone out of their homes, the service is slack so why an increase, when was the last time people got a 3.8% pay rise, well you got because YOU vote for them

Pardon me

Posted on 14-03-2017 18:40 | By astex

So, it is growth that is the cause of this rates rise and nothing to do with grandiose schemes for the CBD costing tens of millions ????????

Let's hear the Mayor

Posted on 14-03-2017 18:06 | By Mackka

Come on Greg - our so far silent Mayor - you were voted in to put a stop to the escalating 'wish list' - you promised to put the 'brakes on' unnecessary spending. Stick to what Tauranga needs - not what minority groups want . PLEASE!!

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An afternoon surf. Photo by Josh Casey. Send us your photos from around the Bay of Plenty. photos@thesun.co.nz