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Tasman District gets credit rating upgrade
December 7th, 2016
[TDC press release]
Independent credit rating agency Standard and Poor's has upgraded the Tasman District Council's outlook from stable to positive.
The Council now has an 'AA- with a positive outlook' financial strength rating from Standard and Poor's (the previous rating was 'AA- with a stable outlook').
The agency's report says it expects the Council's strong after-capital account surpluses to continue over the next few years, allowing the Council to further reduce its debt over the medium term.
It says: "The ratings reflect Tasman's very strong budgetary performance, strong financial management, budgetary flexibility and liquidity and low contingent liabilities."
Council Corporate Services Manager Mike Drummond says the revised rating is pleasing.
"I think it's an indication of just how good our financial performance has been over the past year and gives us a lot of confidence that we have been following the right strategy by focussing on reducing debt."
Mike says the Council's debt is forecast to be $139 million at 30 June 2017, compared with the $166 million budgeted.
"That's because of the strong operating surpluses we have had over the past two years - the year to date operating surplus (at September 2016) is $2.3 million."
Tasman Mayor Richard Kempthorne thanked the Tasman community for their patience with the changes the Council had made in order to strengthen its balance sheet.
"We've been helped by some external factors, such as lower interest rates, but we have also been very mindful of the need to tighten our belts and keep debt in check - and that has meant changes to the way we do things.
"I know there has been some frustration with some of the effects of this - the grass along road verges is being mowed less frequently, for example. Those are the things that people see, and some may think it is just penny-pinching.
"The truth is that the combined effect of a lot of small - and not-so-small things - has given us a much stronger balance sheet and put our work on behalf of the community on a sound financial footing."
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