22 June 2015
Taupo District Council's credit rating has been raised to AA by international credit rating agency Standard and Poor's, acknowledging that its financial management rivals some of the best in New Zealand.
The world-renowned rating agency has issued a report to the council acknowledging its very strong financial management, budgetary flexibility and budgetary performance, and its strong liquidity and low contingent liabilities.
Taupo's improving budgetary performance will reduce and sustain its total tax-supported debt to less than 200 per cent of operating revenues in 2017. We consider that this debt burden no longer represents a significantly higher level of risk compared to AA peers, the report said.
The outlook is stable, reflecting that the council's debt will continue to fall in line with our base-case forecast.
Mayor David Trewavas said the report reaffirmed that the Council, management and staff were working hard in the best interest of the district.
We have now matched the credit rating of the highest-rated councils in New Zealand which shows our financial performance is going from strength to strength, he said.
Council finances, and the way they are managed, are often criticised because they are very complex and difficult to understand. Our finances are regularly audited by the Office of the Auditor General, and this is another report that acknowledges we are on the right track, particularly in terms of addressing our debt, he said.
Reducing debt was a key goal of the council's long term strategy in its 2015-2025 Long Term Plan in which gross debt is projected to reduce from $162 million to $103 million by 2025.
The annual financial benefit of council's very strong AA Standard and Poor's credit rating, and of being a foundation shareholder of the Local Government Funding Agency, is now $750,000 per annum based on $150 million of borrowings.
Being only one of 10 councils in New Zealand to have an AA rating means we are in an incredibly strong position to negotiate the best possible deal for the ratepayer when it comes to servicing our debt, Mr Trewavas said.
It is very good news indeed.
Standard and Poor's conducts an assessment of Taupo District Council's financial position every 12 months. Last year the council was rated AA- positive outlook. The highest Standard and Poor's credit rating in New Zealand is Central Government's AA+ rating.
END
FOR FURTHER INFORMATION CONTACT:
Lisa Nairne Communications Manager 07 376 0762 027 839 8410
Taupo District Council
www.taupo.govt.nz
