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Credit rating upgrade reflects sound planning in Logan

Published: 1 March 2019

Credit rating upgrade reflects sound planning in Logan

Strong economic growth and astute financial management has given Logan City Council an improved credit rating from the Queensland Treasury Corporation (QTC).

Council’s rating has been upgraded from moderate to sound.

The revised QTC credit rating reflects that Council’s capacity to meet its financial commitments in the short, medium and long-term is sound.

City Treasurer, Councillor Trevina Schwarz, said the upgrade was a welcomed acknowledgement of Council’s unwavering commitment to best-practice financial management.

“This is a great result for Council and we are very proud of the recognition which highlights the hard work and determination of all at Council. Ratepayers can be assured that our responsible fiscal management has placed us in a strong and enviable position,” Cr Schwarz said.

“We’ve achieved a credit rating that reflects the efforts undertaken to ensure our finances are healthy now and sustainable for the long-term.

“It gives residents validation from an independent, external party that Logan City Council is well equipped to provide the services and to build the infrastructure required to support current and future residents.

“Should we seek to borrow money for large-scale projects in the future, this credit rating means the QTC are more likely to approve our borrowing requests.”

Council’s current financial position, ongoing financial viability, borrowing capacity and moderate debt levels were some of the factors evaluated by the QTC.

Since the last credit review in 2014, several key financial decisions made by Council have contributed to the credit rating upgrade.

These include:

  • produced operating surpluses which are forecast to continue;
  • maintained tight control over operating expenses;
  • achieved planned reductions in depreciation expense;
  • successfully re-integrated the water business;
  • invested in infrastructure in order to support growth in the region; and
  • maintained adequate debt servicing capacity and moderate levels of borrowings.

Cr Schwarz said preparations for the 2019/2020 Budget would intensify in the coming months.

“We delivered a great budget for ratepayers last year, with a below CPI bottom line rates increase for the second year running, along with expenditure boosted on infrastructure across the city,” Cr Schwarz said.

“The last three budgets under this term of council have been strong and we’re keen to continue that momentum.

“As evidenced by the QTC credit rating upgrade, we’re on sound footing to deliver another knockout budget.”