We support our community to access public transport by operating the Baybus network, delivered in partnership with our bus operators. This includes Bayhopper buses in the Western and Eastern Bay of Plenty, and Cityride buses in Rotorua, as well as regional services. Effective public transport plays an important role in the growth of our region.

Public transport can:

• Reduce traffic congestion for all road users
• Lower regional carbon emissions

• Improve air quality
• Have public health and social wellbeing benefits.

Urban bus services attract a subsidy from central government of around 49% and the remaining costs are funded from bus fares (about 6%) and rates (42%) and other revenue (3%). In the 2021-2031 LTP, we chose to fund the rates portion entirely from targeted rates, with different targeted rates for Tauranga, Western Bay, Rotorua and Whakatane. This approach aligns costs with areas where the service is provided but doesn’t fully account for other benefits across the region.

In the recent review, we thought it would be fairer if a portion of rates funding for urban public transport came from general rates which are paid by all ratepayers across the region. We are proposing a mixed funding approach, with both targeted and general rates, to distribute costs more equitably. This recognises that public transport provides a wider benefit to everyone in the region, for example, the opportunity for communities to be more connected, reduced congestion and carbon emissions, and improved economic activity.

We propose that of the rates funded operating costs for urban public transport, 10% comes from General Rates and 90% from Targeted Rates. This would mean that, on average, the total rates per ratepayer would decrease in Tauranga and Rotorua, and there would be small increase in other parts of the Bay of Plenty.

The financial impact of the proposed change is shown below, comparing the status quo, Option 1 (rates funding is 100% from targeted rates) with Option 2 (rates funding is 90% from targeted rates and 10% from General rates). In each of the options, the shares of funding from fares, central government and other sources are not proposed to change.