Porirua City Council Maintains AA Credit Rating
Porirua City Council continues to maintain its AA credit rating with Standard & Poors.
Council Chief Executive Wendy Walker says the Standard & Poors report, released this week, is positive overall while acknowledging Porirua’s revenue will face "temporary headwinds" from the Covid-19 pandemic.
"It noted that Porirua, along with other local government organisations, has a strong management culture, fiscal discipline, and high levels of financial disclosure," she says.
"The Council’s debt and liquidity policies are prudent, and our insurance policies cover above-ground and underground assets in case of natural disaster, which limit the city’s exposure to natural disaster-related costs."
Ms Walker says the report noted that Council’s liquidity coverage should remain strong, backed by an experienced finance management team.
"However, Standard & Poors forecast a large financial and economic shock in New Zealand during 2021 because of the pandemic when they expect Porirua’s financial position to temporarily weaken but that the Council, led by an experienced finance team, would get through the crisis."
Mayor Anita Baker says there are definitely challenges ahead with Porirua’s drinking, waste, stormwater and roading infrastructure badly in need of major capital investments.
"The Council is now grappling with how to manage ageing infrastructure, growth pressures, the health of our harbour and climate change while continuing to provide regular services like libraries, parks, pools and playgrounds.
"And we’ve been advised by Standard & Poors to keep our debt levels down or risk losing our strong credit rating," Mayor Baker says.
"To do that we will need to balance the budget and manage our debt which then puts pressure on rates. As people know, Porirua relies largely on rates to fund most of the work we do in the city because our other sources of income are limited. We’ll be going out to the community soon with our financial and service level options for next year’s Long-term Plan. I strongly encourage people to give feedback on the best way forward."