Deliberations on the draft Annual Plan 2025/26 commenced on Monday, following a month-long consultation period.
Council received 968 submissions on the draft Annual Plan 2025/26, as well as the Local Water Done Well proposal that was consulted on at the same time. Sixty-eight people spoke to their submissions at hearings earlier this month.
Tauranga Mayor Mahé Drysdale says a wide range of community views were heard during the consultation process and it’s now up to the elected members to prioritise the Council’s investments and budget for the next year, with an ongoing focus on reducing operating costs.
“During consultation, we heard from people excited about the progress being made in Tauranga, while others told us that current facilities in Tauranga are not meeting the needs of our growing community. We also heard concerns about the scale of proposed rates rises,” says Mahé.
“Taking this feedback on board, we need to consider how to get the balance right. Our population is growing, so it’s important that the city continues to progress and that we prioritise the infrastructure and facilities our community needs and wants, while keeping rates increases as low as we can.”
Mahé says since coming into office, elected members have given the organisation a clear direction that it needs to reduce costs and make financially prudent decisions that deliver value for money on every dollar spent or invested.
“We need to be smart and efficient with every ratepayer dollar we spend. It’s pleasing to see the organisation responding to this call for action and we’re now looking at what additional savings we can achieve for 2025/26.”
Tauranga Mayor Mahé Drysdale
The updated draft Annual Plan 2025/26 presented to Council for consideration this week includes the following proposals:
- A further $10 million reduction in operating costs across council’s day-to-day activities, to add to the $28 million already found, reducing Council’s overall expenditure by $38 million.
- A further reduction in the planned capital programme spend for the year, with the originally $544 million budget first reduced to $505 million and now proposed to be $498 million.
- Rates were initially looking at a 20%+ rise, because of the need to fully-fund depreciation on Council assets, but the $28 million reduction in spending brought that back to 12% and the additional $10 million in savings now provides a 9.9% average rate rise option, depending on any additional investment/financing decisions.
- Total Council expenditure of $589 million for the 2025/26 financial year.
Mahé thanks the staff for their efforts in responding to the challenge laid down by elected members.
“Saving 10% of discretionary spending within a 9-month period is an impressive effort. This has had an impact on the organisation, including the confirmed disestablishment of 98 roles over the past few months. This is hard, but under the circumstances, it is the right thing to do.”
He says the $10 million in further savings will be realised through an ongoing reset of the organisation in the coming months, with possible further staff reductions to come.
“We don’t apologise for being prudent with ratepayers’ money and are pleased with the organisation’s response so far, finding $38 million in savings without sacrificing levels of service.
"Making these changes now will lock-in savings for following years as we continue to push for efficiency and look to deliver lower rates increases in future, while continuing to provide the infrastructure the city desperately needs.
“We acknowledge this has been a tough time for staff and we feel for those who have lost their positions,” Mahé says.
The Council will now consider the additional savings proposed, as well as decisions that result from submissions, to arrive at a final proposed rates number.
Once deliberations on the Annual Plan 2025/26 are finished, the financial aspects of the decisions made will be confirmed at a Council meeting on 10 June.
Final adoption of the Annual Plan 2025/26 and the rates resolution will occur on 26 June.
Breakdown of savings achieved to date:
- Projects reprioritised or delivered in-house $ 3.2 million
- Reductions in consultancy use and greater use of internal services $ 3.9 million
- Employee cost reductions (including training) $ 9.1 million
- Uptake-related kerbside collection cost reduction $ 0.9 million
- Interest-related finance cost savings $ 2.0 million
- Increased user fees $ 2.3 million
- Reduced engagement and education costs $ 1.5 million
- Other organisation-wide cost reductions $ 5.1 million
Total $28.0 million
Breakdown of additional savings (subject to deliberation decisions):
- Further employee cost reductions (including training) $ 3.2 million
- Interest and depreciation savings $ 2.2 million
- Process improvement savings $ 3.8 million
- Additional and updated savings estimates $ 0.8 million
Total $10.0 million
Other key items being discussed by Council this week:
- Local Water Done Well – following discussions, an open workshop on the financial model is scheduled for 24 June. A decision on the preferred delivery model is expected to be considered at the Council meeting on 15 July 2025.
- Aquatic Projects – the Memorial Park Aquatic Centre project is currently on hold, pending the outcome of site investigations currently underway, with results expected to be available in early-August. A proposal to retain the Ōtūmoetai Pool was approved by Council this week, along with support in principle for a proposal from the Mount Maunganui Aquatic Centre Trust to expand the college pool to a 50-metre outdoor training pool.
More information about topics being covered during this week’s deliberations can be found on the agenda on Council's website.