Tauranga City Council spent two days in chambers thrashing out Annual Plan. Photo / George Novak
Tauranga City Council spent two days in chambers thrashing out Annual Plan. Photo / George Novak
Tauranga City Council is hiking rates and shifting more of the burden from homeowners to the commercial sector in spite of its protests about the bad timing post-Covid.
On the flipside, nearly a third of homeowners have a nice surprise coming in their rates bill: a decrease.
The council todayagreed a 4.7 per cent average overall rates increase for the 2020/21 Annual Plan - a figure supported by 178 out of 424 people who made a submission on rates during consultation. Nearly half disagreed with it.
A change in the way the city's rates burden is divvied up, however, meant the increase would hit commercial ratepayers much harder than their residential counterparts.
The average commercial increase would be 10.8 per cent ($470 a year) compared to 1.1 per cent ($25) for residential. About 30 per cent of residential ratepayers - those in lower value properties - will see their rates go down.
The difference was down to changes to the rating structure that most councillors agreed made the system fairer and more in line with similar cities.
But business leaders have said it's a bad time for the changes as most of the cost would ultimately be paid by businesses struggling in the Covid-19 downturn.
Council chief executive Marty Grenfell, left, and Tauranga mayor Tenby Powell during one of Thursday's debate. Photo / George Novak
The council spent Thursday and Friday debating whether or not to fund various requests and budgets.
Elected officials made some cuts - for example ditching $89,000 a year for hanging flower baskets in the CBD - and denied a few community funding requests.
A lift in parking fees would add some revenue but that was tempered by a two-hour free on-street parking trial in the CBD.
They also, however, approved a net $1.17m in extra spending, on top of what was consulted. Thousands will go to local charities, social services, playgrounds, arts, sports, sustainability and more.
Existing projects that substantially survived the chopping block included New Year's Eve events, the Robbins Park Tropical Display House (for now), Elizabeth St streetscaping, Memorial Park to Strand walkway investigations and (for now) the Mount Maunganui Visitor Information Centre.
The tropical display house in Robbins Park on Cliff Rd has been saved for now. Photo / File
The council does not have a precise plan yet for how it will fill that $1.17m hole.
Chief executive Marty Grenfell was instructed to try to find reductions. Other options included using any rates surplus from the 2019 financial year and finding savings throughout 2020/21. Failing that, it would be debt-funded.
The council has yet to hear whether any of its applications for central Government Crown Infrastructure Partners Funding have been approved.
Only councillor Dawn Kiddie voted against the 4.9 per cent rise - though five councillors backed an attempt at a 3.9 per cent rise. Only councillor Larry Baldock voted against the change to the rating structure.
He said the "perverse effect" of trying to alleviate the burden on people in lower value properties was loading more on to commercial ratepayers.
New Year's Eve events will stay, but the budget has been trimmed so one community may miss out. Photo / File
"With the 10 per cent we are giving a reduction in rates to many people and I can't see any validity in that."
Mayor Tenby Powell admitted the "timing couldn't be worse" with Covid-19, and said the council needed to deliver on other promises it made through the Annual Plan, especially around the CBD.
Councillor John Robson said the rating structure changes were the "right choice for our city" and he hoped owners of large commercial buildings would treat their tenants fairly.
Councilllor Kelvin Clout said the changes would bring Tauranga more in line with other metropolitan councils.
"In all my years of owning businesses, I have never had a problem paying the rates bill. It was a very small expense."
Residential vs commercial rates rise explained
The steep difference between how Tauranga's rates rise will affect residential versus commercial ratepayers is because of two changes to the city's rating structure.
The first is dropping the fixed portion of the rates bill - the Uniform Annual General Charge (UAGC) - from 20 to 10 per cent.
The change meant more of the bill would be based on property values. That was good news for those with lower-value properties but not for those at the other end of the scale.
The second change was increasing the rating differential to a ratio of 1.1.2.
That meant that, for the same value property, a commercial ratepayer would pay $1.20 in general rates for every $1 paid by homeowners for properties of the same value.
