City financials solid

Queensland’s central financing authority gives council big tick

TOWNSVILLE City Council’s creditworthiness has been given a clean bill of health by the Queensland Government’s central financing authority.

The council’s governance and finance committee chair Cr Verena Coombe welcomed the Queensland Treasury Cor- poration’s 2017 credit review result which found the council’s position was “sound with a neutral outlook”.

The council’s chief financial officer, Matt Thomson, told this week’s committee meeting the result was “good news”.

“We have been rated sound with a neutral outlook. In QTC speak, that’s a good outcome,” Mr Thomson said.

Mr Thomson also told the committee meeting planned borrowings of $ 30 million had been deferred, that it was less likely the borrowing would be needed this financial year, that the council’s cash in bank position, as of this week, was $ 114 million, up from $ 38 million in December 2016, and that $ 5.9 million in debt had been paid off.

The treasury corporation conducts regular reviews of councils’ creditworthiness to assess their long- term financial sustainability.

In a letter to the council, the corporation said the council’s performance indicated operating surpluses as well as a “solid” ratepayer base and high rates revenue providing a high degree of financial flexibility.

“While TCC maintains relatively high debt levels, these are adequately serviced with appropriate liquidity levels maintained,” the letter says.

The corporation says the council’s commitment to fast track the Haughton pipeline project and a delay in the grants may have a short- term negative effect on its credit metrics but that this is expected to reverse as the grants are received. It says the rating and outlook is subject to the council achieving substantial cost savings expected from an ongoing transformation process, including its organisational restructure.

Mr Thomson said the council was on track to achieve cost savings of tens of millions of dollars this financial year.