The Queensland Treasury Corporation has confirmed Bundaberg Regional Council has maintained its moderate credit profile which Mayor Jack Dempsey says should provide confidence for ratepayers.
The biennial credit review is based on a snapshot in time – up to 8 November 2022 – and looks at Council’s financial position.
Bundaberg Regional Council has maintained its credit rating of moderate, with a neutral outlook.
Mayor Dempsey welcomed the findings of the credit review which he said could give residents and ratepayers confidence in Council’s financial management.
“It’s highly encouraging to have this external confirmation that Council is appropriately managing its financial resources, particularly as we work to finalise next financial year’s budget,” Mayor Dempsey said.
“The review took into account Council’s financial position as at November 2022, including its planned borrowings for major projects like the Bundaberg Aquatic Centre.
“The affordability of that project for our community has been widely discussed in recent times so it’s pleasing to receive the Queensland Treasury Corporation’s confirmation that we are in an acceptable financial position to undertake this important, legacy project thanks to good financial management.”
He said the review had noted the challenges of the current economic climate, which are not unique to the Bundaberg Region, but affirmed that maintaining Bundaberg Regional Council’s moderate credit profile was appropriate at this time.
“The current cost of living crisis is impacting all aspects of our community.
“Residents and ratepayers can be assured that we are always working to ensure our financial management is best practice, striking a balance between growing our region and its economy and minimising impacts on residents.
“In recent times we have implemented modest rate increases while maintaining our sound financial position.
“Over the last five years the average general rate increase was 1.95% compared to an average increase of 5.49% in the preceding five years.
“To keep our community moving forward while also minimising the burden on ratepayers is a great achievement.”
Strategic planning means no need to draw down loan
Finance portfolio spokesperson Cr Steve Cooper welcomed news of the moderate credit profile.
“We’ve shown fiscal responsibility in every decision we have made, maintaining cash reserves to facilitate significant infrastructure projects which will cater to our community’s needs for generations to come,” Cr Cooper said.
“It’s those strategic decisions Council has made which have contributed to this positive outcome.
“For example, we had approval this year to borrow $30 million for the aquatic centre project but had no need to draw down the loan as we had enough money in the bank to progress the project.
“We’re taking a prudent approach to ensure our borrowings are affordable and we have the opportunity to review our borrowings in the new financial year with a view to bring down our forecast debt level.”
Moderate credit profile reflects balanced operating results
The moderate rating reflects Council’s continued delivery of balanced operating results, high council-controlled revenue, sound financial flexibility and adequate liquidity.
The review also noted that, while Council’s debt profile was set to increase in the medium-term, it remained within the Treasury Corporation’s preferred benchmarks.
The neutral outlook reflects the absence of foreseeable events over the next two years which could lead to a change in credit rating or have a direct impact on Council’s capacity to meet financial commitments.
The Queensland Treasury Corporation credit reviews are required under legislation and are undertaken on a frequency based on a Council’s borrowing levels.