Rotorua Lakes Council's operating deficit has softened in a month, dropping from almost $6m to $5.1m for the year to January.
The council says when capital revenues are included, the council's books are in a $3.3m surplus.
Council organisational enablement deputy chief executive Thomas Colle presented an update on thecouncil's financial performance for the seven months to January 31 at an Operations and Monitoring Committee meeting on Thursday.
His report for the meeting showed the council had an operating deficit of $5,132,000 for the period, $2.3m over a budgeted deficit of $2.8m.
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In the meeting, Colle said cost pressures continued to include the impact of legal costs, a $1m grant for the redevelopment of QE Health and Covid-19's impact on revenue.
He said the council's priority remained on housing and community safety, and there had been significant costs in those areas.
"We have looked at where we can scrimp, save, pull back."
Rotorua Lake Council organisational enablement deputy chief executive Thomas Colle. Photo / Andrew Warner
He said the council wanted to save where it could with minimal impact to its level of service.
Colle said the council was forecast to save about $1.6m over the next six months, but it was mostly because of staff vacancies.
His report for the meeting showed staff vacancies had saved the council $423,000 for the period, but Colle acknowledged this meant there was additional pressure on existing staff to cover understaffing.
Colle described the updated financial position as a "slight improvement" on the last.
"We have seen a $300,000 improvement in the underlying position. Our variance to budget has shrunk from $2.6m to about $2.39m."
He said operating reports did not include capital revenues such as subsidies from Waka Kotahi NZ Transport Agency.
"When we include those into the mix we do have an overall surplus of $3.3m."
Colle said capital expenditure was progressing but falling behind "a little bit".
His presentation showed the spend would be $99.5m at financial year end, representing 68 per cent of total planned delivery.
He said by financial year end the council would be within $2m of its budget, with a capital underspend of $50m.
"While we are under significant pressure in both revenues and operating expenditure, we do not anticipate having to use borrowings to fund operating expenditure."
In the meeting, chairwoman Tania Tapsell asked Colle about a Local Democracy Reporting article of an almost $6m council deficit, driven particularly by the impacts of Covid-19.
She said: "That is not at all what I have heard, or what I can see in our statements."
Colle said he didn't understand where it had come from.
"I'm assuming it's because of the way that we report to not include our other revenues like capital subsidies and they may have misinterpreted that, but … the reports in the presentations to [councillors], we've never talked about that."
In a report for the previous committee meeting of February 3, it showed the council had an operating deficit of $5,924,000, which was a variance to budget of $2,644,000 for the financial year to the end of December.
It stated the council's operating performance was "tracking unfavourably in comparison to budget, materially driven by ongoing impact of Covid-19".
