How we pay for things

19 May 2026

Rates

Rates pay for everyday costs that benefit everyone. From the roads we drive on, the water services we rely on, and the facilities that contribute to making Kāpiti the place we love to call home.

About 72 percent of Council’s operating costs come from rates. So, where does the rest of our revenue come from?

Modern Kāpiti Coast District Council building with large glass walls and a wide white roof overhang. The entrance features tall wooden panels and glass doors, with bike stands and a bench out front. The building sits beside a paved street under a clear blue sky.

Fees and charges

Fees and charges are a portion of costs paid by those who benefit directly from using the service or facility.

We set these fees through our Revenue and Financing Policy [PDF 825 KB], which we review every three years as part of our Long-term Plan process.

This policy helps us decide how costs are shared between the wider community (through rates) and individual users (through fees and charges). Each year, as part of the Annual Plan process, we use this policy to set fees and rates within agreed ranges for each activity.

These ranges are influenced by things like:

External funding

Charges set by central government

Bylaw requirements

The cost of delivering the service.

Fees and charges also need to keep up with rising costs. Each year we review them using the Local Government Cost Index (LGCI) as an inflation factor to reflect changes in the costs councils face. Unlike the Consumer Price Index (CPI), which tracks everyday household goods, the LGCI measures the cost of a council’s "basket" which is heavily focused on pipes, bitumen, construction, labour, and maintenance.

Sometimes we make changes outside the usual range, for example when we need to introduce a new fee, update an existing one significantly, or combine fees or charges.

Staying within the agreed ranges in the Revenue and Financing Policy helps keep things fair. It ensures a balance between:

all ratepayers contributing, and

people who directly use a service paying their share.

Types of fees and charges

Animal management (such as dog registrations)

Environmental and licences (such as food and alcohol)

Cemetries

Reserve land rentals (new)

Aquatics (entry fees, swimming lessons, aquafit)

Facility hireage (halls, pools)

Older persons’ housing (rent)

Waste disposal

Wastewater discharge

Building and resource consents

Fees and charges are updated and adopted at the same time as the Annual Plan each year.

Development contributions and financial contributions

When new developments happen, we require contributions to help pay for the infrastructure needed to support growth. This ensures it’s fair as those who create the need for new infrastructure help fund it.

Financial contributions also help avoid, remedy, or reduce negative impacts that development activities may have on the environment.

Borrowing

While we generally don’t borrow to fund day-to-day operating costs, we do use borrowing for significant capital investment where it’s appropriate to do so.

We use a mix of funding sources to pay for capital projects. Renewals, where we are replacing existing assets, are generally funded from depreciation reserves as these costs have already been built up over time.

For new assets, or where we are increasing the capacity or level of service of existing assets, we typically use debt. This allows us to spread the cost more fairly across current and future ratepayers and over the period those assets provide benefit.

Investments

We earn some income from our investments. This includes:

Annual dividends from the Local Government Funding Agency (LGFA)

Interest from cash balances and term deposits.

We don’t have any income generated from things such as shares, ports, or asset sales. Looking ahead, our new economic development model will create opportunities for future investment and dividends through a Limited Liability Company.

External funding

We also receive funding from external sources. For example, NZTA Waka Kotahi funds about half of our transport and roading activities, including safety improvements like speed humps and speed limits.

From time to time, central government also provides funding for specific projects. In 2022 we received $29.3 million from the Infrastructure Acceleration Fund, allowing us to bring forward a $50 million infrastructure upgrade programme in Ōtaki.

We’re also using $5.26 million Better Off Funding from the previous government’s Three Waters reform to support initiatives such as:

Community and affordable housing seed funding

Climate action grants

A one-off reduction in water-related operating costs (which reduced rates in 2023/24).