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Council retains stable AA- rating for fifth year running

Contributor:
Fuseworks Media
Fuseworks Media

Timaru District Council has been given a sound financial bill of health by one of the world’s largest rating agencies for the fifth year running.

The council has again been given a rating of AA- with a stable outlook by Fitch Ratings. The credit rating is an assessment of an entity’s ability to pay its financial obligations.

The report says the council demonstrates the council had planned for stable financial performance with achievable financial forecasts offering a measured level of capital expenditure to upgrade key infrastructure and community assets.

The report also highlighted prudential and moderate expenditure growth, supported by declining finance costs.

The rating is said to reflect the strong institutional framework for local and regional councils in New Zealand, TDC’s sound management and fiscal performance, the stable local economic environment and moderate debt levels offset by large reserves and solid financial flexibility.

Timaru District Mayor Nigel Bowen, said that while the council’s credit rating may not mean much to ratepayers on a daily basis, it has some important long term benefits.

"Financial stability is the bedrock on which we are able to deliver all the essential services people depend on. Being independently rated as a financially responsible organisation means that when we need to finance long term assets we can access preferential rates.

"Over a multi-million dollar, long term project like the Pareora pipeline, small differences in lending rates can mean some significant savings for ratepayers.

"The prudent oversight of elected members, and the diligent work of council management and all staff is key to producing the stable environment that’s looked well upon by the ratings agency, and I think this gives the community confidence that there’s a strong team at work for them."

The release from Fitch Rating, which has more detail about the decision can be found here: https://www.fitchratings.com/research/international-public-finance/fitch-affirms-timaru-district-council-at-aa-outlook-stable-24-02-2021

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