Restructuring at Waipa District Council has cut $2.5 million from its draft annual plan and trimmed a possible 10 per cent rate rise to 5.2 per cent.

Chief executive Garry Dyet has reduced the management leadership team from 27 to 16, shaving $1.1m in salaries for the next financial year.

Cuts to the council's vehicle fleet and consultancy and legal fees will also remove up to $1.4m for 2010/11.

However, rates in the proposed draft annual plan, now open for submissions, are still increasing by 5.2 per cent due to a reduction in revenue from development contributions and planned upgrades such as the Cambridge community gymnasium, Leamington main street upgrade, Karapiro development and and Heart of Te Awamutu upgrade.

Councillors yesterday hailed the restructure, with councillor Michael Cox saying it was the only way the council could keep close to its mandate of not increasing rates by more than 5 per cent.

The proposed 5.2 per cent increase would boost total rate revenue to $36.9m and means an average increase of $2 a week for urban ratepayers and $6 a week for rural ratepayers.

"When we look at savings made and the $3.7m loss of income we have had it could have been significantly higher."

Overall costs have been reduced by $4m.

Councillor Grahame Webber said the capital upgrades were necessary.

"We couldn't have left Leamington looking like the middle of Hong Kong."

Hamilton City Council and Environment Waikato have proposed rate increases of 3.4 per cent and 1.86 per cent respectively.

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