Financial rating agency Standard and Poor’s has revised the Kāpiti Coast District Council’s credit rating outlook up from stable to positive.
KCDC says the S&P report confirms the Council's A+ rating and says the local body’s budgetary performance continues to improve, acknowledging the impact of strong financial management policies.
The rating has been welcomed by the Chair of Council’s Operations and Finance Committee.
Cr Michael Scott says Council has worked extremely hard to improve its financial approach with an increasing focus on spending less to pay back more.
“Those efforts have certainly been recognised in this new rating of our budgetary performance,” he says.
“It’s a financial approach that’s getting debt management under control and putting Council and its services to ratepayers in a much stronger position both now and for the future.
“Our programme of reduced capital expenditure is enabling us to start reducing our debt earlier than previously forecast.
“The report says Council’s policies, such as its prefunding strategy, are supporting better management of debt servicing than in the past and that’s a big step forward, showing us we’re absolutely on the right path,” says Cr Scott.
To put the rating in perspective, in April 2018, the Horowhenua District Council also confirmed that it had retained its A+ rating for long-term foreign currency and local currency.
In August 2018, Porirua City Council confirmed that it had retained an AA rating.
Standard and Poor's (or S&P Global as it's officially known) provides credit ratings for bonds, countries, companies etc. It has 17 ratings, AAA being the highest and D being the lowest.
The top three S&P ratings are AAA, AA and A. They can have a minus or plus sign to show relative standing within the major rating categories. An A+ indicates "strong capacity to meet financial commitment, but somewhat susceptible to adverse economic conditions and changes in circumstances".
This is a link to the September 2017 S&P report on KCDC https://www.kapiticoast.govt.nz/globalassets/your-council/documents/reports-reviews-surveys/ratings-direct---september-2017.pdf