Tauranga City Council has made savings from some parts of its budget while adding support for businesses and community groups identified through consultation on its annual plan.

Among other initiatives, the council will offer free on-street parking in the city centre until November to support retailers facing a post-COVID economy.

Funding has been added to the budget for economic development, community services, sustainability, the free parking initiative and other areas identified by the public during consultation.

The decisions were made during two days of discussions about the draft Annual Plan 2020-21.

Mayor Tenby Powell said belt-tightening was necessary to keep rates rises manageable at a time when many people in our community were facing financial challenges.

'We've listened to our community to find savings and cut spending in those areas where we can,” says Tenby.

'At the same time, we must continue to provide critical services and invest in our city's future in a way that supports businesses, jobs and our local economy.

'By investing in our economy and key infrastructure, we can provide jobs and flow-on benefits to our wider community. Businesses, employers and workers are relying on us for this support.

'Ultimately, we must all contribute to this investment through our rates.

'These are tough decisions, but they are decisions that need to be made to keep Tauranga running and provide a platform for recovery in a post-COVID world after decades of under-investment in our city.”

Among other key decisions, the council made more than $500,000 in savings from:

• The event funding framework
• Council-organised events
• Historic Village functions and events
• Emergency management community education
• Harbour reserve encroachment
• City centre hanging baskets (will be removed)
• Waterline education programme

The council will look for an additional $1.17 million in savings to restrict the rates budget rise to the 4.7 per cent proposed during draft annual plan consultation.

Proposed changes to the way rates are calculated mean this would see a rates increase of 1.1 per cent (47 cents a week) for the median residential property and 10.8 per cent ($9.04 a week) for the median commercial property.

More than 30 per cent of residential ratepayers will have a rates decrease.

Responding to community feedback on the draft annual plan, the council resolved to increase funding to community groups and services including Awhina House, the Kainga tupu homelessness strategy, the Tauranga Community Housing Trust, Envirohub, Tauranga Community Foodbank, and the Incubator Creative Hub.

Council will also support the continuation of Our Place, with $160,000 in the coming year.

The council confirmed some proposals in the draft annual plan after considering public feedback, including:

• The Uniform Annual General Charge (UAGC) for rates would reduce from $475 per year to $296. This is a fixed charge for every property, and the reduction makes rates more affordable for people with lower-value properties while people with higher-value properties pay relatively more
• The commercial differential would be set at 1:1.2. This means that businesses would pay $1.20 in general rates for every $1 paid by homeowners for properties of the same value. This is lower than in New Zealand's other major cities, and recognises that commercial properties can benefit more from council infrastructure than residential properties