The Independent financial rating agency Standard and Poor’s has upped the Kāpiti Coast Council’s credit rating by two grades, from A+ to AA.
It says the Council’s budget performance is stronger than expected and continues to improve. It acknowledges the impact of strong financial management and a focus on paying down debt.
Burns welcomes the news
Guy Burns, Deputy Chair of the Paraparaumu Raumati Community Board, welcomes the news of Council’s improved credit rating outlook; up from A plus to AA.
“This jump is a direct result of KCDC abandoning (due to public pressure) its ridiculous ‘loans for investment’ plan.
The scheme was to borrow money to invest in the financial market, this would have increased pressure on our high debt level.
“The improved credit rating is only one measurement of Council. Huge staff costs are a concern and an in-depth independent review of this expenditure is urgently needed.
Chair of Council’s Operations and Finance Committee, Councillor Michael Scott, says it’s unusual for any organisation to improve their rating by this much in a calendar year
“Our focus on spending less to pay back more debt and prioritising our spending is having the desired effect,” he says.
“The new rating will mean the cost of paying back interest will be lower and, for a small council like ours, this will have a positive impact on future rates,” he said.
Standard and Poor’s says that Council’s liquidity coverage is exceptional due to its prefunding strategy and access to funds from the Local Government Funding Agency.
It commends the management team’s efforts to continually improve the Council’s financial position.
‘A lot of hard work’ — Mayor
Mayor K Gurunathan says it’s taken a lot of hard work over the past five years to get to this point.
“Improving the Council’s financial position amidst rising costs is no mean feat and I commend the efforts of staff and management in achieving this rating upgrade.”