Tauranga ratepayers will have to find an extra $90 a year to pay for the rise in the city’s rates.
Council members have agreed to rise residential rates by 3.9 per cent from July.
This comes after two day of Annual Plan deliberations in council chambers this week.
Councillor Max Mason motioned for an extra two per cent increase to reduce council debt, but was defeated by a seven to four vote.
During the meeting on Wednesday, it was brought up that Tauranga City Council is looking at a current debt of $440 million, which is predicted to nearly double in the next four years to $869 million – rising in a few years after that to $1 billion.
The council is facing the increase in the cost of infrastructure, environmental needs and other city projects.
It was mention that now is “best time ever for a small rates increase” in the city has seen a 4.8 per cent growth in GDP, compared to the rest of the country which has seen a 3.2 per cent growth.
The GDP growth over 10 years has been 3.1 per cent, compared to the rest of the New Zealand of 2.1 per cent.
Max is accusing TCC of “fiscal irresponsibility on an epic scale”, following the annual plan deliberations.
After two days of deliberations and examining 351 capital projects line-by-line, the final average residential rate was set at 3.9 per cent.
“Our current debt is $440m and it’s projected to nearly double in only four years, and reach $1b in another four,” says Max in a statement released to SunLive this morning.
“It’s fiscal irresponsibility on an epic scale, when councillors fail to make common sense decisions about very big numbers.
“The choice is stark - either they reduce the capex and opex costs or they increase the ability to manage debt. You can’t have both without taking huge risks such as when interest rates start rising.
“It’s appalling that in an election year fiscal responsibility goes out the window. By avoiding the tough decisions now, councillors have kicked the can down the road and future Councils will be severely constrained by a massive debt millstone around their neck.”
The 3.9 per cent increase is lower than the 7.5 per cent originally proposed in the city’s Long Term Plan, and is the lowest figure proposed in the draft Annual Plan consultation document.
The figure excludes an additional 0.4 per cent increase for glass recycling.
Mayor Greg Brownless says the increase was necessary to help Council meet the challenges of a rapidly growing city.
“Although these challenges are costly, ratepayers have the right to expect the rates increase to be kept at a reasonable level,” he says.
The vote came after a month of public consultation, during which Council received 121 submissions. All of those submissions were reviewed by staff, and provided to Elected Members.
The Annual Plan 2019/20 sets the work programme and budget for the coming year. Final adoption will take place on June 27, when rates will be formally set for the upcoming financial year.
Watch the TCC deliberations below: