Rotorua Lakes Council is on target to better its budget for the financial year with latest estimates revealing it could end up $2.3 million better off.

The council's operations and monitoring committee will meet from 9.30am tomorrow in the council chamber, when councillors will also receive an update from the Rotorua Air Quality Working Party, presented by the Bay of Plenty Regional Council's Stephen Lamb.

Councillors will go through three reports presented to them by staff. They will cover financial performance for the nine months ending March 31, non-financial performance for the same period and an operational report for March and April.

According to a report by council finance manager Paul Sands, a number of factors have contributed to the council's rosy financial forecast.


"Capital expenditure is tracking less than budget. There are five key projects totalling $8.4 million that will not proceed. There is also a further forecast reduction of $2.5 million across a number of projects in the areas of open spaces, waste water, water, stormwater, and corporate property.

"This reduction is due to projects coming in below budget, or where work is being partially or fully deferred into the next financial year," he said.

Also contributing to the surplus are increased revenue from the Rotorua Museum and higher-than-expected revenue from resource consent fees.

The council's overall debt is $161.6 million, $5.9 million less than at the beginning of the year, with no more borrowing planned this financial year, meaning a reduction of $7 million from budget.

"In addition to no new borrowing the improved operating result and lower capital expense will mean council is forecast to hold a higher cash balance by $2.3 million at the start of the year," Mr Sands said in his report.

According to another report from council business performance and procurement analyst James Simpson, some of the council's key performance indicators have been missed, including removal of graffiti and the cleaning of toilets in the inner city, and six monthly inspections of all high and very high risk food and liquor premises.

Mr Sands said contractors responsible for graffiti removal and public toilet cleaning would be reminded of their contractual obligations.

Operations and monitoring committee meeting:


* 9.30am tomorrow in the Rotorua Lakes Council chamber

* Financial updates to be reported

* Operational reports to be received

* Forecast budget surplus of $2.3 million

* Overall debt of $161.6 million, $5.9 million less than the beginning of the year