Tauranga City Council commissioners have endorsed in principle an indicative draft budget for the 2022/23 year which could see overall rates increase by 13% - slightly more than the 12% increase forecast for the year in the 2021-31 Long-term Plan.
A report received at yesterday’s council meeting outlined a range of factors contributing to an increase in the rate requirement for the 12 months starting from 1 July 2022. These included affects on capital and operating expenditure arising from supply constraints and higher than expected resource costs for materials, staff and consultants.
Commission Chair Anne Tolley said the forecast increase in costs was not unexpected and reflected nationwide issues which are impacting the business, government and local government sectors. Impacts on individual property rates would vary, depending on the outcome of work to investigate a transition to a higher differential for the commercial/industrial sector, which would aim to achieve a fairer funding balance across all council activities.
“The long-term plan identified the need to invest more in core infrastructure to address the city’s transport and essential service needs and provide for population growth,” she explained. “The post-COVID economy has seen cost escalations across the board and in addition, we’re seeing a greater demand for services such as planning, building and resource consenting and responding to government reform initiatives, which is also adding to our costs.”
Anne said the increase in costs would be partially offset by forecast revenue gains from fees and charges, grants and subsidies and other income sources, leaving an additional rates requirement for the year of approximately $2 million.
She added that the Council was looking closely at ways to rebalance its revenue streams, including a review of the commercial differential rate and an increase in Development Contribution charges, the latter measure needed to ensure “current growth pays an equitable amount towards the costs of future growth.”
“The community will be consulted on our forecast budget and rates costs, and on any proposed change in the commercial differential rate and development contributions. We look forward to having a revised draft budget brought back to us in February to inform those discussions.”