International credit rating agency S&P Global has reconfirmed NPDC’s AA+ credit rating for the fourth consecutive year despite economic challenges including inflation and increased infrastructure costs.

In a report released this week, the rating agency said like the rest of the local government sector, NPDC was facing inflationary pressures and large infrastructure needs but noted its Perpetual Investment Fund (PIF) is a credit strength compared to peers. It allows the council to offset rates and is a substantial liquidity buffer.

NPDC Finance Manager Helen Barnes said given the challenging financial climate, maintaining the AA+ rating, the highest issued by the agency to a New Zealand local authority, recognises the Council’s “strong financial management” and efforts to reduce costs and manage debt effectively.

“While the short-term outlook remains negative, it’s no surprise given the higher costs we are dealing with, including rising insurance premiums and borrowing costs that all add to the challenging financial climate the local government sector is facing. But the report also acknowledges our efforts to meet those challenges through our next 10-year Plan (2024-2034).

“We’ve already started on the journey to transform the organisation which aims to save around $100m over the next decade, along with other proposed cost-saving measures and we are fortunate to have the PIF to help offset the total rates bill and put us in good stead for current and future generations,” says Barnes.

The PIF is currently valued at $376 million and has offset the total rates by $11.4 million this financial year (2023/2024).

A copy of the report is available on our website.

Fast facts

• NPDC manages $3.4B worth of assets.
• Over the next 10 years, NPDC is proposing a $4b work programme.
• NPDC’s draft 10-year Plan (2024-2034) was consulted on in March and April this year and will be adopted in June.
• NPDC created the PIF in 2004 with about $260 million from the sale of its shareholding in Powerco.
• The New Plymouth PIF Guardians Limited was set up in 2017 and is a council-controlled organisation
• The New Plymouth District Council (Perpetual Investment Fund) Bill was passed by the Government in 2023 and ring-fences benefits from the PIF for people living within the current New Plymouth district boundary.

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