Tauranga City Council is considering overall savings of up to $37 million in its forthcoming 2025/26 annual plan process and prioritising capital spending to manage current economic headwinds and ensure that rate increases are below or in-line with those proposed in the 2024-34 Long-term Plan (LTP).

Mayor Mahé Drysdale said since Council adopted its LTP in April, a number of factors have changed the assumptions, including central government decisions around transport funding and waters, along with new Council directives to move to a balanced budget next year and save on operational costs, while putting a ceiling on rates increases to ensure affordability.

On Monday, the Mayor and councillors began working through some of the important investment and spending decisions the city needs to make through its draft 2025/26 Annual Plan.

“This annual budget is about finding the right balance – moving our city forward, while making prudent financial decisions to help Tauranga reach its potential in a way that is fair and affordable for ratepayers,” Mahé said.

“We are committed to transforming the city and despite needing to make significant cuts, we remain committed to an infrastructure spend our growing city needs. Everything we do has to provide value for money and deliver outcomes and quality services that will benefit the people of Tauranga.”

Council has decided to explore two options for the draft budget: one to keep rates at an average 12.5% increase, as currently set in the LTP, and two, reducing the average rates increase to 10%.

Other matters to be considered for the budget in February include:

Costs that should be funded by rates and user fees, as part of running a balanced budget in 2025/26

Further prioritisation of the capital programme, balanced against the level of council debt, ongoing operating costs, and the revenue required through rates and user fees

An application to the Local Government Funding Authority for a bespoke covenant to enable an increase in its debt-to-revenue limit.

An initial draft plan will be presented to Council in early-February. Following that, Council will make further refinements to the draft plan, including progressing savings projects. The adopted draft will then be available for community consultation from 28 March to 28 April 2025.  

Mahé added: “We’ll have a consultation document available to detail the budgets and proposals involved and we’ll be out and about in our communities asking for feedback to understand what is most important for Tauranga. 

“We want this to be a “peoples’ plan” and we’ll be looking to create some fresh and simple ways for the community to get involved and to give feedback.”

© Scoop Media