2015-06-01 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                                                          1 JUNE 2015



Rating Scale               Very strong
                           Strong
                           Sound
                           Moderate
                           Weak Very weak
                           Distressed

Outlook Scale              Positive or negative
                           Neutral
                           Developing


Council has been rated by QTC as Sound with a Positive outlook. The sound rating reflects
Council’s forecast operating surpluses, strong debt servicing capacity, high level of Council
controlled revenue and high levels of forecast liquidity. This rating is considered an excellent
outcome for Council given the short timeframe between de-amalgamation and the undertaking of
the review by QTC.

The most significant factors determined by QTC that are contributing to Council’s sound rating
are:

    Forecast operating surpluses over the life of the 10 year financial forecast (positive);
    Council is on track to achieve FY2015 budget (positive);
    Low level of borrowings with adequate debt servicing capacity (positive);
    High levels of forecast liquidity (positive);
    High level of council controlled revenue and fiscal flexibility (positive);
    Capacity to increase net rates, levies and charges (positive);
    Asset management plans (AMP) have not been developed to date (negative);
    Council forecasts adequate investment in its asset base (positive); and
    Zero-based budgeting (positive).

The positive outlook reflects the potential for a future credit review rating upgrade and is
dependent on Council maintaining its credit metrics, continuing its disciplined approach to cost
control into the future and developing its asset management plans. The lack of finalisation of
asset management plans was identified as the only negative element in the assessment.

When QTC undertook the original financial assessment on behalf of the Local Government
Boundary Commissioner in 2012 prior to de-amalgamation, the proposed new Noosa Council
rating was given a moderate rating with a neutral outlook based on the financial estimates at the
time. The latest upgraded rating is obviously based on data that is more relevant and current,
and the responsible financial management put in place since de-amalgamation.

Previous Council Consideration

Nil

Finance & Risk

Nil




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