Tauranga ratepayers are facing higher rates than initially proposed by Tauranga City Council because of Three Waters being ditched.

But homeowners are being told that their rise will be less steep thanks to a new industrial rating category.

The draft average rates increase will be 13.1 per cent for the 2024/25 financial year, a 2.8 per cent increase on what was proposed in the 2024-34 long term plan (LTP).

Including Transport System Plan Infrastructure Funding and Financing (IFF) Levy the average rates rise would be 15.8 per cent.

The increase was signalled during long-term plan deliberations on Monday. [SUBS 4/03]

Chief financial officer Paul Davidson said this was the average for all rates including commercial so residential rates would be lower.

The median residential rates increase would be 8.9 per cent up from 6.7 per cent consulted on in the LTP.

This doesn’t include the IFF levy of 2.2 per cent. Including the levy the total median rates increase for residential ratepayers would be 11.1 per cent up from 8.8 per cent.

An IFF levy is a loan from crown infrastructure partners, and would be paid back through a targeted rate over 30 years.

Commission chair Anne Tolley said Tauranga was “a lot better off” with its rates rise compared to other councils. Photo: Alisha Evans/ SunLive.

Commission chair Anne Tolley said Tauranga was “a lot better off” than many other councils around the country that are talking about a 20 per cent rates increase.

The commission also approved a new industrial rating category. This meant residential rates were around 3 per cent lower than if the category wasn’t created.

The rates increase was driven by the new Government’s scrapping of Three Waters.

This meant the council needed to provide $1.8 billion for water services investment from 2026.

Under the previous government wastewater, stormwater and drinking water would have been managed by regional entities rather than the council.

These changes would have taken place from July 1 2026 before the coalition government repealed the Water Services Act in February.

Along with rates increases key council projects have been pushed out.

Cameron Road Stage 2 was rephased to be completed by the end of 2030 rather than the previous completion date of 2028 and costings have been increased.

Stage 2 will complete council’s upgrade of the Cameron Road corridor from 17th Ave to State Highway 29. It would include cycle lanes and safety improvements.

The Turret Rd/15th Ave project aims to reduce congestion between Welcome Bay and central Tauranga. File photo / SunLive.

The Ōtūmoetai and Mount multi-modal projects have also been moved towards the end of the LTP.

“"Since taking on our roles, we have been playing catch-up on years on underinvestment in the city, however we are also mindful that the city has a threshold for disruption linked to infrastructure projects,” said Tolley in a statement.

“What we've tried to do here is create a balance, so that the city doesn’t fall further behind, but that key works are staggered.”

“However, tackling Tauranga's congestion issues is more important than ever, so the Turret Rd/15th Ave project which could really ease pressure in that part of town, has been moved to earlier in the LTP.”

The project would add high-occupancy vehicle/bus priority lanes to 15th Ave, add a clip on cycle lane to the Turret Rd Bridge and other safety improvements.

"Since taking on our roles, we have been playing catch-up on years on underinvestment in the city, however we are also mindful that the city has a threshold for disruption linked to infrastructure projects,” said Tolley.

“What we've tried to do here is create a balance, so that the city doesn’t fall further behind, but that key works are staggered.”

The rates could change after being audited and will be confirmed when the council adopts the long-term plan on April 22.

LDR is local body journalism co-funded by RNZ and NZ On Air.