Council maintains AA credit rating
2 Aug 2024, 12:48 PM
Credit rating agency S&P Global has re-affirmed Kāpiti Coast District Council’s AA credit rating.
The rating again comes with a ‘negative outlook’, driven by rising infrastructure costs and responsibilities, and uncertainty about central government water reform policy.
The update follows the adoption of the Long-term Plan 2024-34, which saw Council commit to reducing debt levels over the next 10 years.
Kāpiti District Mayor Janet Holborow says retaining the AA credit rating confirms the council has the right plans in place.
“We know the rates increases signalled in our long-term plan will be harder for some households than others in our community, but the potential cost of not reducing our debt could have been far greater,” Mayor Holborow says.
“Had we not made the tough decision to prioritise debt reduction, we may have been looking at a down-graded credit rating.
“This would mean the cost of borrowing money – which we still need to do to fund important infrastructure and other work – could have gone up, or it could be more difficult to get funding.
“We’re focused on building a stronger and more resilient Kāpiti so that should we have to respond to an unexpected event, like a significant natural disaster, we will be better prepared.
Chief executive Darren Edwards says in its report S&P noted Kāpiti has higher debt levels when compared to other councils.
“While we acknowledge we need to reduce our debt to ensure a resilient future Kāpiti, and are working towards that, the reasons for that debt are sound,” Mr Edwards says.
“We’ve got excellent water infrastructure which we have upgraded and improved over many years, and we are continuing to invest in our core services and in the growth and resilience of our district – we have a major capital works programme.
“There is still uncertainty about the Government’s Local Water Done Well policy and the future will no doubt bring changes.
“As long as we are responsible for water services, we’ll continue to deliver the best that we can, while making sure our debt comes down.”