The Elms has been handed a $150,000 lifeline by Tauranga City Council, though it comes with a financial warning to spend the money wisely.

Councillors voted 7-4 in favour of granting the funds to The Elms Foundation for the next 10 years - a reduction from the $200,000 recommended to council as part of their Long Term Plan deliberations.

The Elms, on Mission Street in Tauranga. Photo: File.

The figure, however, will be reviewed on an annual basis as council looks to help ensure ongoing protection and operation of the heritage site.

Tauranga Mayor Stuart Crosby and councillors Bev Edlin, Gail McIntosh and Bill Grainger all opposed the amount, with Gail plumping for just $100,000 and the other three opting for the full $200,000.

The decision comes after The Elms Foundation sought assistance from council during last month's Long Term Plan submission process after losing funding and services from Tauranga Charitable Trust.

It was outlined by trustees chair Norah Reid that all cash reserves would be depleted by mid-2015 after being supported by the Tauranga Charitable Trust since they bought the property from the Maxwell family in 1998.

The site on Mission Street is one of the most historic sites in New Zealand and has a living history of early Tauranga, with no payments made to trustees, accountancy staff, the 47 guides, consultants or the active gardening team.

But Councillor Steve Morris questioned what the remaining $115,000 is allocated for if only $85,000 is set aside for the site's rent. Councillor Gail McIntosh was also critical of estimated 5000 cultural artefacts stored at Newton Street as part of the Tauranga Heritage Collection.

Council's strategic and corporate planning team leader Cheryl Steiner says the outstanding figure will be used to raise the profile of The Elms within the city, through promotions and marketing along with staff salaries.

She adds The Elms' items stored at Newton Street, if taken out of storage, would do little to reduce the $400,000 currently paid in rent each year.

Councillors seriously debated a suitable amount for the group, which ranged from fully investing $200,000 in Tauranga's heritage site, to just $100,000 before the proposed $150,000.

Councillor Bev Edlin says Tauranga needs to come to terms what is such an historic site right on its doorstep.

'We have a piece of heritage here in New Zealand, which is the second oldest building in the country,” says Bev.

'We have an asset here and we are sending them a sign that we don't want them to go forward [if $200,000 isn't granted].

'They are looking to make it a seven-day-a-week operation and they have worked hard. We need to recognise the volunteer time that goes into running this facility. They are not asking to be paid, just the actual staff.”

But Gail believes if $100,000 is granted it will help The Elms focus its approach even more, touting a possible move to cooperating with the Tauranga Moana Museum Trust and discussions surrounding a joint museum for the city.

Councillor Rich Curach was hesitant of the higher amount, given the group came to council at the last minute during the LTP submissions.

He feels council needs to review The Elms after a year to see whether council's 'extra $115,000” has been a good investment.