CITY BACK IN BLACK
Council ‘back in black’ after sound management
THE Gold Coast City Council’s credit rating has been given a boost with a pat on the back for “sound” financial management.
The rating has shifted from neutral to positive for the first time since the Global Financial Crisis.
It prompted buoyant Mayor Tom Tate to say: “We are in great shape financially.”
CITY hall is back in the black.
Declining debt and strong economic growth has delivered the Gold Coast City Council its strongest financial rating in more than a decade.
The Queensland Treasury Corporation’s (QTC) annual review of the Council’s credit rating has seen its outlook shift from neutral to positive for the first time since the depths of the global financial crisis.
The move has paved the way for city hall to save more funds for infrastructure pro- jects including Stage 3A of the Gold Coast light rail. Mayor Tom Tate welcomed the news and said the council’s financial position was improving.
“This was achieved despite having to deliver the 2018 Commonwealth Games at a cost of around $260 million to the City and also comes in a period where we have delivered the lowest annual rate increases in the city’s history,” he said.
“In 2012, the Council debt was $806 million but today, it is $608 million and this means millions less in debt repayments for ratepayers and a strong balance sheet.
“Our financial position strengthened in 2017-18 with debt reduced by almost $44.7 million that year alone.”
The credit review focused on the calendar year of 2018 during which the Commonwealth Games were held.
It comes two years after the council’s credit rating was bumped up from moderate to sound.
Sound is the third-highest rating behind strong and very strong. The sound rating, according to QTC, is a reflection of the council’s “adequate” operating results, declining debt profile, favourable debt servicing capacity and sound liquidity levels.
Cr Tate said an improving financial position allowed the council to save for other projects.
“Cash held in reserve, primarily for infrastructure projects, has also increased by $38.6 million so we are in great shape financially,” he said.
The Mayor has already tipped a major spend on infrastructure in this year’s budget, with between $66-$72 million to be committed to the Broadbeach-to-Burleigh tram link.
Council chief executive Dale Dickson was notified of the rosy credit rating by QTC in a letter sent last week. QTC said the improved outlook was based on a range of factors, including managing the needs of a growing city.
“The council successfully executed the 2018 Commonwealth Games which illustrates conservative and cautious planning processes and a minimal consequent burden on ratepayers,” the letter said. “In addition, over the past years (council) has demonstrated its capacity in successfully managing the operational and infrastructure needs of a large and growing population. Projected economic growth in the region combined with council’s forward thinking approach to management may further enhance (council’s) position.”