Nelson City Council retains AA/A-1+ credit rating, noting sound fiscal management during pandemic

10/12/2020 4:30am

Credit rating agency Standard and Poor’s has affirmed Nelson City Council’s AA long term and A-1 short term credit rating with a stable outlook, due in part to a sound financial response to COVID-19.

Standard and Poor’s report says they expect the next few years to see Council recording small after-capital-account deficits due to a rise in capital expenditure linked to an “uptick” in core infrastructure investment. However, they also say Nelson's debt burden should remain moderate compared with its peers.

The report also notes pressure on Council revenues due to measures taken as a result of COVID-19, including the zero percent rates rise, which were partially offset by a staff pay-freeze and other savings. Despite this, the agency describes the increase to Council’s debt burden as “modest”.

Nelson Mayor Rachel Reese says long-term, careful financial management put Council in a strong position as revenues reduced during lockdown and helped to maintain the AA credit rating.

“The debt we will have taken on in our response is relatively modest, thanks in part to the savings we found in the 2020/21 Annual Plan. Our fiscal processes are described by the agency as credible and well-established, and it’s that attention to detail, which has left us in a solid position financially.”