Fourth time stable Fitch AA- rating for council

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Published: 04 Mar 2020

Timaru District Council has been given a good financial bill of health by one of the world’s largest rating agencies for the fourth time.

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, crediting a high level of public engagement and community participation in shaping council spending decisions.

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 although highly technical in nature the rating provides a clear external signal that the council is continuing to perform in a financially responsible way.

“Financial stability underpins everything we do, as a council we can’t provide services or upgrade major infrastructure without a strong financial foundations.

“For residents and ratepayers, a good rating means that the borrowing required for major long-term upgrades such as the Pareora Pipeline can be obtained more cheaply, which can lead to significant savings on the overall cost.

“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/site/pr/10111502

Last updated: 23 Jun 2020