But there was good news also.
The Sarjeant Gallery Trust was well on target to raise about $9 million needed to secure a $10 million Government grant. The trust has until December to raise the money before the Government grant offer is withdrawn.
"Hopefully it won't take until December," Mr Anderson said.
A strategy involving funding applications to public and private trusts, lotteries sources and corporations had so far been "very successful."
The next phase of the redevelopment was to commission a procurement plan. Two potential providers were to be approached to submit quotes.
If council agreed to proceed with the plan the project will have entered its final phase before a decision is made on retaining a principal contractor.