Sluggish building activity, tough economic times and reduced subsidies for road works have contributed to a $2m drop in expected revenue during the first six months of the financial year for the Hastings District Council.
The council's overall performance during was $439,000 below budget and staff expected to see the trend continue for the rest of the financial year.
The figures formed part of a financial report which was presented to the council's finance and monitoring committee yesterday.
Development contributions, or fees paid to the council before building projects began, were below budget by $722,000, but the number of building consents had increased.
The council's planning and regulatory group manager John O'Shaughnessy said while people were applying for more building consents, they were reluctant to progress projects further. It meant fewer development contributions being paid because building projects had not started.
Councillor John Roil asked if reducing development contributions could encourage more building activity but Mr O'Shaughnessy said the fees would have to be "paid by someone" and would be passed on to ratepayers.
Staff contracted to other councils in Christchurch and Central Hawke's Bay to assess building consents had helped push revenue up in this area to $297,000 higher than budgeted.
Lower than expected funding for roads from New Zealand Transport Agency had also contributed to the drop in revenue figures.
Rental from the council-owned Heretaunga House on the corner of Warren St and Lyndon Rd was down $42,000 on budget due to a tenant moving out in November. Staff reported the lease market remained challenging and if a tenant was not secured the loss in rent could be as much as $101,300 by the end of the financial year.
Money generated from resource consents was also below last year's figure by $107,000.
More favourable was the report on the council's expenditure which was cut by $1.6m. The council spent $44.875m when it had budgeted to spend $46.484m. It had also decreased its debt from $61.74m reported on June 30, 2012, to $56.3m by the end of December 2012.
Other good revenue earners for the council included water theme park Splash Planet which was tracking $91,000 higher than expected.
Costs were also higher than last year, by $52,000 due to very high temporary staffing demands when large groups of people came through its gates.