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Business operators optimistic on commissioners’ appointment

Tauranga businesses are welcoming the professionalism and impetus the appointment of commissioners to the city are bringing after years of inertia.

Priority One chief executive Nigel Tutt told Bay of Plenty Business News the ability of the commissioners to act without the influence of an electoral cycle should not be underestimated, coming after more than a decade of “low rates” electioneering that has crippled many aspects of the city’s development.

“Their brief is very clear,” said Tutt.

“They have formed a long-term plan and are aiming to get the financial side sorted. There are three clear areas to work on- transport, housing and the CBD. They have recognised what the issues are very well and have got moving on decisions that have been lingering for years.”

In a March meeting with Tauranga businesses, commissioner Anne Tolley described Tauranga’s arteries as “clogged”. She also said in 30 years of politics she did not think she had ever seen a community so poorly served by its council as Tauranga.

Housing shortage bottleneck

Nigel Tutt says the business community regard housing as an utmost priority, given the bottleneck its shortage creates for businesses wanting to draw new staff to the region.

“They simply do not have anywhere those staff can be housed.”

Utilising the central government’s housing acceleration fund and having the government on board to provide transport infrastructure means zoned areas in Papamoa East and Tauriko West can now get moving on development.

He is also confident there will be significant strides over the coming seven to eight years on CBD re-development, thanks to the commissioners undertaking to ensure the city council will underwrite activity happening there.

“Plans are afoot, and redevelopment there is not rocket science. It is about telling the right story to investors, assuring them this is a zone that is on the way up, and helping take some of the risk out of that investment, which has not been the case before.”

He said it was hard to know if the commissioners will be staying beyond the initial 18-month period they were employed for.

“But most people I talk to in business would be in favour of seeing that extended. Eighteen-20 months is a very short space of time to make these changes.”

A decade too late?

He agreed that in some respects the appointment of commissioners was a decade too late.

“A lot of the hard work to be done now is because the hard decisions have not been made earlier. That 2-3% increase on rates every year not put through does not go away, it just banks up while the stuff they need to be spent on just gets more expensive.”

On January 14, Tauranga City Council’s credit rating was lowered by S&P Global Ratings, with concerns raised over its political and governance issues.

S&P raised concerns over Tauranga’s lower than previously budgeted rate increases leading to very large deficits and rising debt levels.

The report’s authors cited concerns over Tauranga’s capital account deficits over coming years averaging 25% of total revenue per year, weaker than most domestic peers.

Tauranga was however expected to benefit from the $15 million in Three Waters reform, $45 million from the Te Papa “shovel ready” project and $24 million from the sale of elder housing.

Tutt says past councils pushed to keep rates down, but were not clear enough to constituents about what would be forgone as a result.

Expectations are Tauranga ratepayers will face at least a 20% rates increase to try and claw back income and improve the city’s ability to lift borrowings and remain within lending parameters.

“I have not run into any businesses who do not believe a rates increase is necessary.”

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