Council’s credit is on the up
WHITSUNDAY Regional Council has received a ‘weak’ rating and ‘positive outlook’ in a 2014 credit review prepared by the Queensland Treasury Corporation (QTC) and made public last week.
Mayor Jennifer Whitney says this is Council’s best financial position since amalgamation in 2008 and an undoubted improvement on the ‘very weak’ rating and ‘negative outlook’ of 2013.
Under the QTC’s terms, ‘weak’ defines a council with an adequate capacity to meet its financial commitments in the short to medium term and a limited capacity in the long term. It applies to a Council with a record of moderate to significant operating deficits, unlikely to be able to address these or manage unforseen financial shocks without the need for significant revenue or expense adjustments.
A positive outlook however, indicates the potential for improvement in the council’s capacity to meet its financial commitments and a change in its rating if this is the case.
QTC’s conclusions are based on Council’s high debt levels and below benchmark debt servicing capacity, “offset to some extent” by recent improvements in its operating position and a strong focus on taking the necessary actions to repair its liquidity position.
These included the introduction of the levy, reduction in discounts for early payment of rates and increased water and sewerage charges, which led to a $14.2 million or 25 percent increase on net rates, levies and charges for the 2014 financial year.
Cr Whitney said this current rating was “in stark contrast to the situation we had to deal with just over two years ago”.
“[And] I’m very pleased to advise that the uncertainty and difficulties we faced at that time are behind us all and we can look forward to a positive future for the organisation and the community,” she said.
“Council will continue to work together to ensure financial responsibility for our ratepayers, region, community and the organisation [and] it is through this continued financial stability that we can positively grow our region’s economy.”
The QTC 2014 credit review can be viewed in full on Council’s website at www.whitsunday.qld.gov.au/budgets.