Upper Hutt City Council positively addressing credit rating change
Published on 30 October 2024
The recent decision by S&P Global to downgrade Upper Hutt City Council from ‘A+’ credit rating to ‘A’ was not a surprise to the council. In Feb 2024, and the previous S&P report indicated that the council was on ‘negative watch’.
S&P have now indicated that UHCC’s outlook has moved from ‘negative watch’ to ‘stable’. This is pleasing and a direct reflection of the Long Term Plan 2024-34 financial strategy.
Chief Executive Geoff Swainson says that during the recent Long Term Plan process Council set out its financial position and a number of issues impacting this. The financial strategy and subsequent decisions and changes in the Long Term Plan 2024 -2034 were made to address these financial constraints and work towards a balanced budget.
As a result, S&P also noted that UHCC’s robust liquidity and wealthy economy in a global context continue to support its credit quality. It says “the stable outlook reflects our view that as Upper Hutt’s capex tails off and the council implements above average increases in property rates, its cash deficits should narrow and debt stabilise in the last two years of our forecast horizon”.
“Like many councils Long Term Plan involved some very challenging and difficult decisions. Ultimately Council made decisions that, despite being unpopular, were necessary to address our financial position, maintain core levels of service and deliver on our capital plan. The new operating environment brought with it a reorganisation of the council operations and structure to achieve further savings, including a reduction of 24 staff positions,” says Swainson.
“As we signalled in the plan, it will take time for our financial position to reset and the resulting financial improvements to take effect. This new financial strategy is currently reflected in this latest credit rating moving to a stable position, from the previous negative watch.”
Contact
For more information on this news release, please email media@uhcc.govt.nz.
For more information on Upper Hutt and the City Council, go to www.upperhuttcity.com