International credit rating agency Standard and Poor’s (S&P) has kept Hamilton City Council's AA-credit rating but revised its long-term rating outlook to negative in a reflection of the financial challenges ahead.

Council has consistently maintained its AA- rating annually, with the AA- score indicating the organisation has ‘very strong capacity to meet financial commitments’.

When Council needs to take on new debt, for major infrastructure or unexpected events, the AA- rating provides lenders with assurance that there is strong capacity to repay.

It also means Council can access lower interest rates on its borrowing through the Local Government Funding Agency.

S&P’s report notes Council’s financial forecast is below previous expectations – with operating surpluses roughly half of what was expected because of inflation, interest rates, and other costs outstripping revenue growth.

Council decided in June to keep its average rates increase at 4.9% despite increasing inflation and rising costs. During the COVID-19 pandemic, Council voted to drop its average rate increase to as low as 2.8% to ease cost pressures for Hamiltonians.

At the same time, Council is challenged to deliver a large capital programme to provide infrastructure for a growing city.

Council’s General Manager Business Services, David Bryant, said the economic context is unprecedented.

“We’re working on our 2024-34 Long Term Plan, which covers the next 10 years, and this will be an opportunity for Council to reset its spending priorities.

“The city living within its means is a priority of Council. This means ensuring Council quickly gets back to a position where everyday expenses are paid for by everyday revenue.”

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