Tauranga is facing a cascade of substantial rates increases over the next three years.
The ‘average' householder is receiving a rates increase of $150 this year and next year, followed by a $230 increase in the 2011/12 year.

In percentage amounts it is 10.93, 9.8 and 14.35 per cent – plus a uniform annual charge of $570 and a water rate of $1.40 per metric tonne.
The staged increase in rates is expected to generate another $20 million income for council by 2012, and $129 million by 2019.
The average rate will increase from $1372 including GST, but excluding water by meter in 2008-09 to $1912 in 2011/12.

The rates increases are the current council's tactic to fend off Audit New Zealand, which labelled the 2010/11 draft Ten Year Plan economically unsustainable.

The increased rates revenue enables the council to maintain its current debt level and Standard and Poors ‘A' credit rating.

The alternative is to accept a lower credit rating which will enable the council to borrow more money, but at a higher interest rate.
An ‘A-' rating would see the council having to increase rates revenue to pay an about extra $1 million interest payment required on new loans.

If the triple rates increase solution is rejected by the new council after October, the council will again be in a financially unsustainable position.
The rates were set following the adoption of the Long Term Council Community Plan, following its official approval by audit manager for Audit New Zealand Taryn Crewe.

In December 2008 the councillors decided on way of navigating through the financial mire was to move capital works out past the three year margin of the LTCCP.

The council had to keep debt levels at $400m out to June 30, 2013 – the first three years of the 2009 Ten Year Plan. The council's total debt is near $340m leaving little room to take on new capital projects.

The drawback is that the city is in danger of failing to carry out its statutory obligations to provide the community with a satisfactory level of essential services because at the end of the current plan's three years, the council may again be forced to defer part of several major projects.

Mayoral Candidates

Bill Faulkner
Rates are unsustainable into the future, according to the 2008 Government Inquiry. Tauranga Council is the meat in the sandwich as you highlight. There is too much work to do with too little resource. I would vote money supply that stays within the revenue/debt envelope to avoid paying increased interest rates on existing debt. Council must maintain its core infrastructure and cater for future growth and debt is one practical way to do this. Council must only get involved in basic infrastructure in the interim until Government assists Councils (eg tax deductibility of rates, GST exclusion, community levy). Either this, or significantly reduce services and planned capital expenditure. Some hard decisions are needed!

John Robson
The current TCC financial situation is a slowly unfolding train wreck!
The debt is not sustainable – nor are the rates rises.
And people shouldn't be fooled – an ‘A' rating is not good – it is closer to ‘junk' than top investment grade!
And it's lower than NZ's other main centres.
Meanwhile, the Mayor and Councillors' response is, at best stupid, and at worst, dishonest.
Rather than address the issue, they have pushed the problem into the future – and, surprise, beyond the current election.
Our second rate leaders will deliver a second rate city.
They have to go.

Mark Groos
Hutt City reduced rates rises, decreased debt, whilst improving their community approval. When we asked how they keep rates down they replied: before spending money, we save money first.
Whanganui provide three rates rise / spending options to the community, and let the community decide which one they want.
Econobuilt provided an indoor Sports and Exhibition Centre pre-quote to council which was $9 million cheaper – Council inexplicably excluded Econobuilt from the tender.
Stop unwise council decision making by replacing our current mayor and his supporting councillors. Start implementing simple / common sense / proven solutions. Tauranga's rates and debt problem will disappear.

Murray Guy
Mayor Crosby, Crs David Stewart, Faulkner, Baker, Moultrie and Brownless have relentlessly stymied most efforts for improved procurement outcomes, crying, ‘There is no fat in the system, we've looked!'
I've clearly demonstrated that savings are available, facilitating the access from Dive Crescent to Marsh Street, on budget at $17,000. The staff estimate in excess of $78,000.
I secured a professional price to construct the $2.7m Arataki Community Centre, saving $350,000, likely ½ million. The above named elected members poured scorn on my efforts.
Projected rate increases, debt levels can be reduced, meeting all statutory obligations and service levels.

Stuart Crosby
Despite the mistakes in the article, the current and future city's finances are of upmost importance to me. As a result of the economy and slowdown in growth the council has started and will continue to complete a review of council budgets. These new budgets will be presented to the new council in December and forecasts that were in place two years ago for revenue requirements will be downgraded, including rating requirements.

I support carefully planned investment funded from a fair balance of funds from the private sector, user fees and charges and rates in a cost effective manner.

Hori Leaming
So what Audit New Zealand are saying is that we are in deep financial water. Our credit rating is poor and borrowing more money to sink deeper is not a good option. We need to take heed and all start balling like hell, unfortunately rate increases are an unsavoury necessity along with other measures unless we are all good swimmers.

Mount Maunganui-Papamoa Ward

David Stewart
Rating income is a moving feast and is determined by Council every three years and then reviewed every year. TCC's projected rates requirement as determined last year has largely been compounded by the projected cost for stormwater works as a result of the 2005 floods, projected cost for the wastewater southern pipeline and reduction in income from development fees due to the downturn in the economy and housing market. The shock requirement for rate increases in 2009 has the council very focused on its finances. Our challenge is to carry out the essential works required while continuing to drive efficiencies and look for savings to reduce expenditure.

Wayne Moultrie
Rates provide about one third of the amount needed to meet the city debt, about one third from development contributions and the balance from user fees and charges.
If you reduce rates the deficiency needs to be made up. If you increase development contributions then development slows, if you increase user fees and charges everyone complains.
It's a no win situation.
The percentage increases quoted are projections only. I believe that a single figure rate increase in years one and two can and will be achieved.
As always I will seek and be guided by expert advice.

Steve Morris
We live in a city where the population is growing fast – to nearly 140,000 within the next 15 years. Meeting ratepayer expectations and controlling debt is going to cost. However, balanced with strong financial discipline, the reallocation of resources, improvements to the tender process, and clear identification of priority spends we can eliminate waste and remove unnecessary financial burden from current ratepayers and future generations.
In tough times, we need to focus on good quality affordable services.

Bob Harnor
Tauranga's debt is unsustainable and the planned rate increase of 35 per cent over the next three years is unacceptable. Most ratepayers are struggling, council must operate within the means of its ratepayers. We cannot increase debt during the current financial crises and therefore need to stick to essential work. 'Nice to have projects' need to be deferred until better times. Projects such as the $7million upgrade of the Mount Hotpools and the multi million dollar upgrade of The Strand car park are two clear examples of projects that need to be shelved for now.

Otumoetai-Pyes Pa Ward

Larry Baldock
Tauranga cannot continue to elect councillors promising to keep rate increases low while ignoring the reality of the increased costs of a growing city, including those imposed by central government. While the effects of the recession are being felt by so many, we cannot afford to pay $300-$400,000 salaries. The incoming CEO will need to review many salaries and contracts, including councillors' remuneration. We must get debt under control and make the right decisions necessary to make the city financially stable. Deferring essential projects or funding them by passing the responsibility to future generations to pay for them is not sustainable.

Graham Skellern
This is why Tauranga City Council has to be smarter and find additional revenue/grant sources, such as regional council (sitting on $200 million), TECT, central government and private partnerships. I've met entrepreneurs who are prepared to invest in the city if they are brought in at an early stage of planning.
The council cannot increase debt; in reality it has to reduce it to around $300 million, until revenue increases on a 50/50 debt-equity basis. Of course, council has to concentrate on reducing bureaucratic costs and a last resort is asset sales of non-core activities.

Jane Lyndon
New Council will be damned if they do and damned if they don't!
Need to maintain Standard & Poors ‘A' credit rating. To borrow more at higher interest and increase rates even more is not an option.
We will need to totally revise LTCCP with both council and public engaged in vigorous and robust debate.
We must become financially sustainable, taking into account statutory obligations and essential work first. England/Europe in dire straits financially – we have to think globally. We need to think outside box and smarter.
Growth has to be accommodated whether we like it or not.

Mike Baker
As an existing councillor, of course, it is my goal to keep rate increases as low as possible, however, we have issues facing us such as storm water, wastewater, roading and other infrastructure requirements that, in my view, past councils have failed to address.
The council of 2007 to 2010 has shown strong leadership and decided to begin to address these outstanding issues, but it has been at a cost and that has been rates rises higher than any of us would have liked but if there are other options out there that the community can suggest please contact me.

Nigel Stichbury
Our current and past governance structure has indeed dug a hole which they seem to be at a loss on how to get out.
The predictive rate rises and debt levels, probably on the conservative side, are a nightmare.
I do not support having rate rises to address an unacceptable debt level as this is not addressing the root cause of the problem, which is bad decision making.
All options for reduction of debt need vigorous analysis to ensure financially based solutions for the short to medium term.
Our city needs need a professional team for this new council.

Catherine Stewart
Planned rates increases are unacceptable and that is why I did not vote to support the Annual Plan expenditure.
This year discussions primarily focussed around proposed library book charges and Route K.
There are many other activities contributing to rates increases such as transportation etc that was never fully discussed.
How to solve:
• Vote for commonsense people prepared to focus on financial issues and discuss ways to reduce debt
• Re-prioritise capital expenditure
• Seek better value for money spent on works and projects
• Fit-for-purpose projects not ‘gold-plated'
• Improved procurement
• Review of internal core operations

Andrew Cass
First, Tauranga faces issues common to many councils and things are not a dire as some portray it. Tauranga's financial situation is a result of many complex interwoven issues, however, the council's approach is via the Ten Year Plan and through it our future must be shaped. The future for Tauranga is bright, and the secret to rates increases is providing value for money so the community is growing and expanding. I will be actively trying to stimulate the economy, and will approach reviews of major capital expenditure drawing on my 15 years experience in project management to keep abreast of major projects.

Mike Mills
An analysis of rates on my home shows that from 1999-2005 rates dropped $40 (-3 per cent) while the city was experiencing exponential population growth. Since 2006 rates have increased rapidly in double digit increments. The annualized increase (1999-2011) spread over the whole period is 4 per cent. We are reaping the consequences of under-rating by previous councils (including incumbent councillors), and an over-reliance on development funding contributions, which are now strangling economic development. We need innovative funding solutions, including realistic rates, to continue investment in a growing city. We cannot repeat the mistakes of the past, passing on the consequences to future generations.

Te Papa-Welcome Bay Ward

Rob Davies
Projected rates increases reinforce the points raised in the government's Rates Inquiry; that rates are an unsustainable way of funding councils.
How can a system that provides for such extraordinary increases be working when we're in the depths of an economic crisis?
We have to fix our broken rating system.
The government needs to accept that ours is a city of national significance: we are about to be home to the country's largest port and our population is expected to double. Providing the necessary infrastructure is a tremendous burden that ratepayers – most of whom are on fixed incomes – cannot be expected to carry alone.

Bill Grainger
In the past there was no foresight on the growth of this city. There was large development between the 70s and 90s with no impact fees. Rates over that period were kept at an even keel and in fact in the 90s decreased...why?
• Capital expenditure on projects of low priority eventuated.
• Maintenance and improvement of our general infrastructure was not addressed.
• Our recent Ten Year Plan audit review advised the council that it is unsustainable, hence the dramatic increase in rates.
• Our new council, if in the same mindset, must pull the reigns tight on our future capital expenditure and operational costs to help reduce this debt.

Dr Michael Morris
Rates must be firmly capped. It is unfair to make ratepayers bear the burden of ego-stroking grandiose schemes like the waterfront development, expensive museums and the hot pools expansion. We must reduce debt and live within our means.

Rates should be targeted where they do the most good for the greatest number; basic infrastructure, cleaning up the environment, and community development. Additional revenue can be gained by ensuring developers pay the full cost of development.
A uniform charge is unfair and amounts to a poll tax. Rating should be directly proportional to property value.

Jeanette Arnold
It's true that new councillors often grapple with the decisions of the previous councillors and I see this will be troublesome for the first few months. Tauranga's growth means it has to pay for new facilities with increased capacity. Some of this is unavoidable and we all need to budget carefully for this. It is vital that the new councillors reign in spending and adjust delegated authority to staff so that commitments to escalating costs are strictly controlled. What can we do without, in order to have a functioning and pleasant environment in which to live? Let's work together to stop financially over committing.

Terry Molloy
Those on low and fixed incomes are particularly affected by rate increases. More needs to be done to restrict council's rate dependency.
Acceptable rates can be delivered.
Businesses, retailers and developers are also finding the going tough. Council has to provide the best environment and basic services for all and to avoid problems in the future growth must be provided for.
The majority of our debt is generated by providing basic services, catching up on infrastructure and providing for growth.
A dramatic development slow down has seriously reduced council's income and some non-essential projects may be deferred.
With careful planning rates and growth can be maintained at an acceptable level.

Bill Humphrey
Spiralling out of control rate increases are totally unacceptable. Bureaucracy is out of control and is unacceptable. CEO said he wouldn't replace staff in positions that became vacant by natural attrition. What followed was, new positions were created and then advertised. What is needed is a staff audit to get some of the expenditure under control. Considerable savings can be made in the CEO's remuneration. The current amount I understand is more than Helen Clark received when she was Prime Minister. The remuneration for the new CEO has to be set lower and his/her discretionary rights reduced. Improved procurement outcomes are most essential.

Lloyd Davies
‘The statement, '...the city is in danger of failing to carry out its statutory obligations to provide the community with a satisfactory level of essential services because at the end of the current plan's three years, the council may again be forced to defer part of several major projects” is concerning. In order to avoid the planning foibles of the past, incoming xouncillors must review the current rating system to reduce the projected increases by creating a fairer spread of revenue generation and identify other more innovative ways (such as more use of public/private partnerships) to fund future capital projects'.

At Large Candidates

Bonnie Leonard
It is interesting that voters want background information on candidates. After reading about the state of Tauranga's finances, candidates need a mental check to see why anyone would want to inherit this shocking state of affairs!
An internal audit is needed in every department. No grandiose plans to be considered until the debt is lowered considerably, and no 'fudging' to maintain the ‘A' level credit rating. Let's face the awful truth, and deal with it. Transparency and accountability from now on, keep ratepayers informed and use common sense instead of expensive consultants.

David Love
There is no silver bullet to solve the short-term financial issues of the city council. The next council must plan for the strategic economic development of the city which is the only sure way to restrain and reduce rate rises in the longer term. Providing the right commercial environment for business investment has to be the way ahead letting developers shoulder the burden of development rather than the ratepayer. We need to continue to fund those items that provide this investment requirement and cut the unnecessary red-tape that is seen as a real barrier to private investment in infrastructure.

Tony Young
Council must revisit plans and determine what a ‘need' is and ensure that these go ahead. Projects that are considered a ‘want' should be ranked and only those that ensure rate increases are kept to a sustainable minimum should proceed.
Project planning must take into account the longevity of the project, well ahead of the Ten Year Plan.
Councillors need to keep in mind you can't have everything in three years using a band aid approach, prime example in the past are ie. Mount Bowling Greens, Sports Exhibition Centre.
Do it once, do it right!

Richard Moore
I would like to see much smaller rates increases. People are struggling financially and hikes in council rates add unwanted pressures at an already stressful time. However, the unfortunate financial situation Tauranga City Council finds itself in means there is little alternative to the proposed amounts in the short term. It is outrageous that things have come to this. I would like to introduce a rates-deferral scheme where those struggling to keep their heads above water can apply to have the rate increases held back and then repaid when their homes are sold, or can be taken from their estates.

Brendan Horan
Statutory obligations must be met and it will be interesting to read the present councillors' responses. In their defence, current projects, having passed through the consultation process, are deemed sound and reasonable and those underway cannot be stopped. We should also receive around $56 million when the Transport Agency takes over Route K. Unfortunately there's no escaping the fact we've been placed in a financially vulnerable position by current and previous Councillors and that's why this election is so important. Should I be elected rate increases will be under far greater scrutiny than they have been in the past.

Allan Andrews
I personally believe as a society our living environment is dictated by our collective wealth and because we are all so different we often have differing needs and desires for our communities.
The challenge facing any council is providing the needs and desires whilst ensuring the community can afford to pay for it.
The ability to get the balance right is often measured by the city's growth… albeit a vicious cycle.
In light of the financial squeeze facing many companies and the TCC being no different the solution seems to be to move capital works out further.

Terry Wynyard
Terry sends his apologies for being unable to participate to date, as he is in Canterbury assisting the Christchurch City Council with the management of their earthquake recovery.

Sue Hawkins
It's an alarming situation and many ratepayers don't fully understand the precarious position, although most felt the impact when their rates bill arrived recently – as I did. The issue is achieving fiscal balance and a sustainable income while ensuring Tauranga is a vibrant, go-ahead city able to deliver a satisfactory level of essential services. My goal is to make informed decisions leading to long-term benefits for the city by fully exploring issues, including funding options; other than rates with council staff, other councillors, stakeholder groups and ratepayers. Newly elected councillors will need to come up to speed quickly because the projected rate increases are unsustainable for thousands of people.

Joye Adams
The opportunity is there every three years to check the Ten Year Plan and consult with the community. The basic infrastructure items must be carried out. I'd like to check levels of service to see if savings can be made. We might have to sell something in the property line every year for a while instead of loading the rates. What about the forestry blocks in the water catchment? Have they been harvested to help the water account?
We must keep the city contracts going and keep Tauranga working.
I wonder whether a lower credit rating is the worst that could befall us – we could have a devastating earthquake!

Rick Curach
A big chunk of the increases coming up are debt related.
Council must face current economic reality and stop living in the past.
Look at the $41m Sports Centre at Baypark with $4m of professional fees, including $1.3m for the architect.
Council was told that a building of equal size and performance could have been built for $25m via design & build, but some councillors, who are still living in fairyland and are happy to keep spending other people's hard-earned money, didn't want to pursue such proposals.
It's exactly why we need a new council who'll look after the interests of the ratepayer.

Tony Christiansen
In terms of decision making and prudent management, running a council is little different than running any other business. The one significant difference is that a council has no ‘customers' – only a captive population that can be tapped for rates to meet expenses and costs. Councillors must never abuse ratepayers by including unnecessary ‘wish list' projects. It is critical TCC incur only expenditure that can be afforded by ratepayers.
TCC must concentrate on core services. There are many projects in the Ten Year Plan that are not basic infrastructure and core services – they must be trimmed so that we can run an affordable community.

Jonnie Mead
The anticipated rate increases are not an acceptable funding line for local projects as they are accompanied by accruing debt. That's an untenable double dip – more expense for the ratepayers and a flawed and accruing borrowing method. Surely we can review all project costs and make adjustments, reassessing how many people really will use these; Leave the Mount hot pools as they are – authentic! Let's also find savings by reviewing operating costs and finding new cost effective methods. Council needs to preserve those as-of-right core services that make for a deeply connected community that feels safe, has accessible and affordable public transport, roads and footpaths, clean drinking water, street lighting and good affordable access to library services. Essential in this mix is the continuing support of both Tourism BOP and Priority One to further develop and maintain a meaningful business and employment base to underpin growth – and projects!

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