Changing growth patterns are looking like leaving the city's $130million Southern Pipeline project without the population to justify it Tauranga City Councillors were told this week.

In terms of funding the Southern Pipeline the city is relying on development contributions from more than 10,000 dwellings being built within the city limits.

Works at Memorial Park on the Southern Pipeline in 2011.

'And that is not looking like a realistic prospect happening within the 40-50 year time frame we are talking about,” says city planner Andrew Mead at the recent council Strategy and Policy Committee meeting.

'You are going to have to look at how to get development in the same corridor that connects to that same pipe.”

Staff will be coming back to council towards the end of the year with intensification research.

'We designed a pipeline to cope with projected growth, and now we are designing the growth to assist with the projected pipeline,” says Councillor Bill Faulkner.

'It's an interesting point how we geared everything to this continued line of growth and we have to be careful we don't fall down that trap again.”

The southern pipeline is a 23km long 900mm diameter sewer laid from Maleme Street to Te Maunga via city streets.

It is to cross the estuary from Elizabeth Street to Matapihi. The project is expected to cost more than $100million. Some estimates say $130million, other more than $200million – depending on whether the associated rebuild of the Te Maunga wastewater treatment plant is included.

The pipeline was originally scheduled to be completed in the 2013/2014 financial year, but the city's population growth has fallen below estimates and the completion date has been set back to 2016.

It was the growth issues that brought the Southern Pipeline Project into the discussion over the SmartGrowth policy review.

Growth funding is the elephant in the room says Councillor Terry Molloy.

'This is the biggest challenge that local bodies are facing at the moment, particularly areas that have a lot of economic growth. [The situation has] left us hanging out to dry, it is almost impossible to deal with unless we get some government help,” says Terry.

Because SmartGrowth is well received in Wellington he wants to use the policy review to develop some weight behind the council's argument, in conjunction with the SmartGrowth partners the Western BOP District Council and the BOP Regional Council.

'We really need to be actively putting pressure on the government to assist us with our infrastructure funding because its 90 per cent of our debt,” says Terry.

'It's the same for every area that's got strong economic growth and we have to find a way through it because the ratepayer can't keep carrying the costs.

'We need more tools. Government puts costs on us. It provides education but doesn't pay rates on schools. It provides a health budget, but doesn't pay rates on hospitals. Everyone has to pay their share. We just need more tools.”

Governments don't really understand the cost of infrastructure, says Mayor Stuart Crosby.

'They haven't got a clue really about growth, with the greatest respect to the Productivity Commission, it did a study on affordable housing. They missed a lot of critical areas, and they are not listening to people like Auckland, Hamilton, Tauranga, Queenstown Lakes, who have a lot of experience in the real life-time costs of infrastructure.”

Local communities should be empowered to make decisions, but central government is not providing the tools, says Stuart.

'This government is trying to tear us to bits before they even understand how we work. This is the fundamental problem,” says Stuart. 'MPs who haven't got a clue about Local Government want to fix us before they understand how we work. When we go to them to seek opportunities to actually spread the load, nothing happens.”

The issue facing the council is an increasing shift towards ratepayers funding development.

'The ratepayers can't do it,” says Stuart.

'In the last 10 year plan $35 million dollars of what should have been funded by the development community is going onto rates in the long term.

'We have got $60million in debt funded development contributions at the moment. We just can't carry on like that.”

The situation has developers and the city planners looking at alternative options for outlying development like Wairakei at Papamoa East and Te Tumu. Because the population doesn't yet justify the council committing to the $100 million Wairi Stream water supply project, alternative water supply and treatment options are to be workshopped.