Tauranga City Council has pulled the plug on plans for a $28 million waterfront walkway as it projects a 12.5% rates increase this year.

Mayor Mahe Drysdale told a meeting on Monday the council’s budget is a “ceiling ... not a target”.

A majority of the council voted to stop all work on Te Hononga ki Te Awanui Memorial Park to Elizabeth Recreation Connection, with applause heard from a handful of people in the public gallery.

The meeting heard there was no budget to complete it in the long-term plan.

The walkway - previously known as Memorial Park to The Strand - had been discussed for about 20 years, but limited progress had been made.

Stage 1 - which included a rail underpass and new boardwalk from the city centre to Elizabeth St - was complete but not stage 2, which would extend the boardwalk to Memorial Park.

It had met opposition from private landowners along the harbour’s edge with riparian rights, a council report said.

Tauranga Mayor Mahe Drysdale is keen to reduce costs. Photo / Alisha Evans

The estimated cost of $28m for 800m of walkway did not deliver value for money, Drysdale.

The council, elected in July to replace Government-appointed commissioners, discussed their first draft annual plan.

Staff were given guidelines for the draft, which would be brought back to councillors next week.

The council approved a “baseline budget” that would achieve a maximum overall rates increase of 12.5% for 2025.

Drysdale said the council had removed $29m from its operating budget to achieve this.

He said it would be great going forward if every dollar spent was spent wisely.

“A message to our staff if you can deliver it for less and do the same that’s the [goal]. The budget’s not a target, it’s a ceiling.”

Councillors had two-hour discussion about the budget, questioning operating costs including staff salaries and benefits, the use of consultants and cemetery fees.

Deputy mayor Jen Scoular wanted the council to use fewer consultants. Photo / Alisha Evans

Deputy mayor Jen Scoular questioned why consultants were used and costs were not decreasing.

She gave the example of council-run events and said the in-house team was creative and experienced.

Space and places general manager Barbara Dempsey agreed if there was enough work for a fulltime employee, that was “a heck of a lot cheaper than employing consultants”.

For the larger events held once or twice a year, there may not be enough staff or expertise needed to run them, Dempsey said.

“We have tried very hard to reduce consultancies and I can give you assurance that we will continue to try … [and] where there’s a fulltime job for somebody that we will not use consultants.”

Scoular said staff were the council’s biggest assets. The council’s most 2024 Annual Report said it had 1148 full-time equivalent employees.

“One of the best ways to motivate people is to stretch them a little bit,” Scoular said.

“Give them the benefit of doing something that might be a bit outside the expertise, instead of just bringing in consultants.”

She said she would like to see this right across the organisation.

Councillor Marten Rozeboom. Photo / David Hall

The council also agreed to change rates for small businesses based in industrial areas.

It opted to exclude those businesses with a footprint of less than 250m2 from the industrial rating category.

The industrial rate introduced last year meant industrial properties pay 2.6 times more than residential.

Removing smaller properties from the industrial category was in response to feedback about how unaffordable rates had become.

Councillor Marten Rozeboom said he had heard from small businesses who were “driven out” of the Tauriko business estate because of high rates.

Drysdale queried cemetery maintenance costs and chief executive Marty Grenfell said there had been no rates funding for this for the last five years as user fees covered the costs.

“It means those that are dying essentially pay for those that have died.”

The 2025 draft annual plan and user fees will be presented to council for further discussion on March 3.

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