Coun­cil’s credit is on the up

Whitsunday Times - - LOCAL NEWS -

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.whit­sun­­gets.

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