The ongoing cost of the city's growth to ratepayers was brought home to councillors this week, with the staff asking council to approve placing $2.5 million of development contributions ‘backlog' onto the rates debt.

The $2.5 million is money the city's ratepayers have invested in growth - paying for infastructure like water pipes and roading - that will not be reimbursed.

Ratepayers are paying $2.5 million for growth. File Photo.

Tauranga City Council has been collecting Development Contributions since 1994. The total owed to ratepayers peaked at more than $40 million in 2010.

In 2011/12 council reviewed the backlog and determined that at least $23 million of it's likely to be permanent and outlined a process of transferring this DC funded debt to rate funded debt. The ratepayers were paying for the growth.

Councillor Gail McIntosh suggested the burden on ratepayers may be the result of bad decision by previous councils.

Councillor John Robson says she's being a little harsh.

'It's a game designed by the government,” says John. 'It's weighted in such a way that on a good day we may get back 91.9 per cent, on a bad day we are struggling to recover.

'The fact is, growth doesn't pay for growth under the rules of the game designed by central government, and that impacts on the city of Tauranga more than it impacts on any other city in the country.”

In Australia when decisions made by Federal and State governments' impact on smaller communities, the governments are required to provide funding to absorb some of the shock with having to deal with managing growth, says John.

'In New Zealand we are on our own. The city of Tauranga is on its own. Central government has left us on our own. It's wrong, but we have no choice. We are doing the best we can every year, but the big argument here is with central government, not with councillors of the past.”

Mayor Stuart Crosby says things are beginning to shift with the government's announcement in July of a billion dollar infrastructure fund.

'Things move slowly in wellington but the message does get through sooner or later,” says Stuart.

The development contributions required from developers over time have increased considerably, and staff say the charges paid by developers in the past were too low – given the information that is now available.

The result is that when some urban growth areas are fully developed, council expects to have a shortfall in the amount collected. Legally the council cannot charge current or future developments more to recover the backlog.

'What councillor Robson says on this is correct. We can never win on this, we can only get a draw on a good day,” says Stuart.

An amount of $2,532,000 will form part of the draft 2017/18 Annual Plan, with a comprehensive review to be part of the 2018/28 long term plan, to ensure the approach to future write-offs is coordinated with the update on future growth expectations and capital expenditure.