Tauranga residents are facing a rates rise of 9.4 per cent from July, but the council was 'losing ground” as this was lower than the costs it was facing.

Tauranga City Council set its rates for the 2023/24 financial year at a meeting on Monday.

The median rates increase for a residential property, not including water rates is 9.4 per cent. Including water rates, the median rates rise is 7.2 per cent.

In dollar terms, the median residential rates, excluding water, increases from $2,978 to $3,258 or $280 per year. An increase of $5.38 per week.

The rates increase is lower when water is included because the council is providing a "one-year relief" and will not charge for connection to the water supply for those with a connection of 250mm or smaller. Water use will be charged at a rate of $3.40 per cubic metre.

The median rates increase for a commercial property is 18 per cent, the median commercial rate is increasing from $8,141 to $9,645, or $28.93 extra per week, equating to $1,504 a year more.

Commissioner Stephen Selwood said the rates increase was consistent with what was set out in the long-term plan.

It was important to note the council was 'losing ground” with this rates increase, he said.

Commissioner Stephen Selwood said the council recognised there was "pressure right across the community". Photo: John Borren/SunLive.

'Our [the council's] inflation rate is running well above the 7 per cent rate, particularly on infrastructure.

He said the council recognised there was "pressure right across the community" in terms of the cost of living crisis.

'Hopefully this decision on the rates today, will be seen by the community as council's acknowledgement that we have to manage costs.”

'[The increase] was appropriate this year but, I think we have to acknowledge that we can't continue to run our rates increase less than the rate of inflation that we're facing,” said Selwood.

'We can't continue to keep these rates increases low in the face of inflation rates that are in the range of 14 to 20 per cent on some of our infrastructure projects.”

Commission chair Anne Tolley agreed that the increase was 'probably less than inflation”.

'It is timely given what's going to be a very difficult year for everyone.”

Commission chair Anne Tolley the council was 'going backwards” by adopting these rates. Photo: John Borren/SunLive.

She said the council was 'going backwards” by adopting these rates.

'You just have to look at that BVL [Bay Venues Limited] and the legacy of underinvestment.

'You not only pay in the short term, but you also build that bow wave ahead of you. That then means that's a considerable chunk to try and catch up.

'It was the right thing to do in this year. It does make it tougher for the ongoing years, but it is the right thing to do,” said Tolley.

Bay Venues is a council-controlled organisation that manages community facilities in the city.

The rates rises came without feedback from community this year because the council opted not to consult on its 2023-24 Annual Plan, that was adopted in May.

The reasons for not consulting were there were no 'significant” changes between it and the 2021-31 long term plan (LTP) and to reduce the staff time spent on it, according to a report by finance manager Kathryn Sharplin.

The rates would apply from July 1 with the first instalment due by August 31 2023.

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