The city's development rule book, the Draft Development Contributions Policy 2015/16, is going for public consultation with 'very few significant amendments” proposed.

Development contributions are the source of income the city uses to pay for roads and the three waters; fresh water, stormwater and sewerage.

Southern Pipeline development contributions are to increase 11 per cent.

Amendments include price increases in Citywide development contributions of two percent. This affects all new builds, alterations and renovations across the city.

The charge for development in Papamoa's urban growth area is to be decreased by nine per cent, but in the city the charge for the Southern Pipeline project is increased by about 11 per cent, because of the inclusion of interest costs previously outside the Long Term Plan.

This is a future price increase which will impact the calculation of the Southern Pipeline charge in future policies, but excluding the 2015/16 policy.

So far, $75 million has been spent on the southern pipeline, according to councillor Matt Cowley. He says $16 million of the remaining $24 million to be spent on the project will come from development contributions.

The charge for development in the West Bethlehem urban growth area is to be increased by 6.5 per cent as previously indicated by council.

Development contributions are the city's way of getting developers to pay for the new sewers, water pipes, stormwater systems and roads that new developments require.

They are based on the level of service the council determines through the Long Term Plan. Some growth costs are still loaded onto existing ratepayers because of the benefits they receive from the new or additional assets.

The council planners look at projected population growth's demand and identify the point at which new infrastructure is required, like more water and wastewater treatment.

To achieve fairness in the amount of development contributions payable, TCC's policy is to try and keep the amount of development contributions payable constant in real terms.

This means contribution amounts will increase over time in line with inflation or income growth. The LGA 2002 restricts council's ability to do this.

A limited form in intergenerational equity is achieved by excluding interest costs projected to be incurred beyond the scope of the current Long Term Plan. It results in development contributions being lower.

The Interest costs in relation the development contributions payable for the southern pipeline wastewater project, local infrastructure in Wairakei and citywide infrastructure projected to be incurred beyond the Long Term Plan, are excluded from the development contributions.

Over time, as new Long Term Plans are adopted, these interest costs are progressively added to the calculation of these development contributions. This leads to these contribution amounts increasing over time.

Which is where the 11 per cent increase in southern pipeline development contributions comes in.

Another example is the upgrades of the Oropi and Joyce Road Water Treatment Plants, which were originally designed to cater for population growth between 1996 and 2016.

Growth was lower than expected and so were water consumptions levels. The planning period is therefore extended to 2020, and the costs of the projects are split between the 1996-2001 and the 2001-2020 periods.

Under the SmartGrowth Strategy, Tauranga City has to accommodate approximately 84 per cent of the anticipated sub-regional household growth, plus significant business development, for the next 50 years.

This growth will be accommodated through a mix of Greenfield and infill development. This will place significant strain on the existing services assets with a need to provide and fund increased capacity or extension/additional services to meet growth demand.

The complete policy is available here.