Rates rise resistance: Curtail growth and cut spending, say Tauranga residents

Avenues resident Maurice O'Reilly says growth is killing Tauranga. Photo / George Novak

Some Tauranga ratepayers are calling on the council to curtail growth and cut costs to avoid significant rates increases.

On Friday, Tauranga's mayor Tenby Powell laid out the council's under-pressure financial situation and the difficulties it was facing to fund increasing infrastructure costs associated with growth.

He warned rate hikes would be one of several measures considered to avoid breaching the council's debt to revenue ratio, which would trigger millions in refinancing costs.

Today the council will hear from staff and debate proposed options, including rates rises of up to 17.6 per cent, as it debates its draft budget for 2020-21.

Council staff have highlighted millions in increased capital project costs, along with significant revenue losses such as delays in the sale of elder housing and the Harington St car parking building completion.

They argued instructions from the council in December to draft a budget with a 3.9 per cent rates increase, plus rubbish collection, are "not financially sustainable or prudent".

Many ratepayers, however, are urging the council not to increase their burden.

Dozens took to the Bay of Plenty Times Facebook page slamming the council's pricey flip-flop decisions, record of cost overruns and taking on projects viewed as unnecessary.

Central Tauranga resident of 40 years, Maurice O'Reilly, told the Bay of Plenty Times he believed growth was "killing" the city.

The council needed to stop encouraging growth and asking current ratepayers to pay to provide services to new residents of the future, he said.

"We have to say hey, we're full.

"We are not obligated to keep accepting people wanting to move here from other places.

"I don't believe those people have got a right to destroy the standard of living for people who have lived here for years and years."

He said increasing congestion was the best example of the drop in living standards.

A rates hike is on the cards for Tauranga ratepayers. Photo / File

He also called on the council to stop "glamorous" projects such as the new visitor centre in Mount Maunganui, and review all projects.

He took offence to Deputy Mayor Larry Baldock's comment on Friday that homeowners on fixed incomes had enjoyed 40 per cent equity gains in the past three years, and may just need to sell up and downsize.

Mount Maunganui superannuatant Ruth Dekkar, 86, built her home in Oceanbeach Rd more than 20 years ago.

After recently forking out hundreds of thousands of dollars for necessary maintenance on her home, including reroofing and repainting, last year she found herself in a position where she had to claim a rates rebate.

A previous president of the local Greypower chapter, she said she knew many members who also relied on the rebate.

Tauranga Mayor Tenby Powell discussing the council's financial situation on Friday. Photo / Andrew Warner

While downsizing might suit some for physical as well as financial reasons, she wanted to stay in her home.

She accepted the council may put the rates up but said this needed to be matched by lowering the eligibility requirements for rates rebates, a scheme controlled by central Government.

This would also help more people age at home rather than burdening public facilities.

According to Tauranga City Council data, rates rebates jumped 21 per cent between 2018 and 2019 from $2.3 to $2.9m, when the scheme was extended to residents of retirement villages.

Papamoa Residents and Ratepayers Association chairman Philip Brown said the organisation wanted no rates rise at all.

An extra $500 a year, for example, was a "loaf of bread a day", he said.

Instead, the council needed to make its operations more efficient and review its projects as to whether they were necessary.

The organisation also wanted the council to drop plans to introduce rates-funded rubbish and recycling kerbside service, which will result in a rates increase.

Taxpayer Union researcher Islay Aitchison said Tauranga City Council's annual rates were almost $200 higher than the average for larger metropolitan centres.

"A growing city shouldn't be a catch-all excuse to hike rates bills. A growing city means a growing rates base and more people to share the burden.

"Politicians can't have it both ways: charging existing ratepayers more while also charging development contributions to those who are building."

Rising costs

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

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 advisors.

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 Harington 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.

Weathertightness
The council says it has significantly upped the amount it has set aside to pay out weathertightness claims.

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

The great rates debate: A short history

February 2019: Council staff reveal a coming $128 million capital cost increase and recommend a debt reduction levy of 2 per cent, but this is voted down.

May 2019: Councillor Max Mason puts forward a similar levy, which is voted down. Council staff recommend a rates rise of 7.5 per cent. Elected members pass a 3.9 per cent average rise, excluding the kerbside waste collections.

December 2019: Concerns about the council's $15m in deficit risk reserve prompt staff to recommend a 2 per cent debt management levy. Elected members voted for this to lie on the table, and asked staff to draft a budget for 2020-21 with an increase of 3.9 per cent excluding the kerbside waste collections - less than the 4.8 per cent previously drafted and the 8.2 per cent forecast in the Long-Term Plan.