Western Bay maintains strong credit rating
Western Bay of Plenty District Council has retained a strong investment-grade credit rating from global ratings agency Standard & Poor's (S&P), despite ongoing pressure from significant infrastructure investment across the District.
S&P Global Ratings has assigned Council a long-term credit rating of AA- with a stable outlook. While this is a downgrade from last year’s AA rating, the outlook has changed from negative to stable.
The rating reflects Council's strong financial management, while recognising the impact of major infrastructure spending and debt associated with supporting a rapidly growing District.
Council’s capital programme in its current 2024-2034 Long Term Plan is approximately $1 billion, making it around $300 million larger than the previous Long Term Plan, due to growth, aging infrastructure and deferred renewals.
It is expected that the transfer of water services to a Joint Water Organisation with Tauranga City Council, operational from 1 July 2027, will help reduce Council's debt and improve its financial position over time.
Council's Acting General Manager Corporate Services, Aaron Pendergrast, says the S&P rating shows Council remains in a strong financial position despite significant investment demands.
"Our District is growing quickly, and that means we need to keep investing in roads, transport and other essential infrastructure to support that growth, while continuing to provide the services our communities rely on," says Aaron.
"It's encouraging to see the outlook move from negative to stable. That reflects the work Council is doing to manage its finances carefully and plan for the future."
The assessment follows S&P's annual review of Council's financial position, management capability, debt profile and economic outlook.
S&P forecasts Council's debt will peak at around $308 million in 2027 before reducing to about $62 million in 2028 following the proposed transfer of water-related debt to the new water organisation.
"The report recognises the steps we're taking to strengthen Council's long-term financial position," says Aaron.
"We're focused on making sensible decisions with ratepayer money and planning ahead so we can continue delivering for our communities."
Council’s Audit, Risk and Finance Committee Chair, Tracey Coxhead says the rating highlights the challenging environment many councils face as they continue to provide the infrastructure needed to support growing communities.
"Councils aross New Zealand are facing rising costs and significant infastructure demands," says Tracey.
"This rating reflects the careful decisions Council continues to make about where and when we invest, how we manage debt, and how we balance the needs of today's communities with those of future generations. It provides confidence that we're taking a responsible approach to the significant infrastructure challenges facing our District."
