Figures presented to yesterday's finance, strategy and development committee meeting showed the council had a $9.8 million surplus on March 31, nine months into the 2011-12 financial year.
Council finance and resources general manager Athol Stephens told the meeting the year-to-date "favourable variance" showed the benefit of council cost-saving initiatives.
However, contacted by the Otago Daily Times afterwards, he also cautioned against against expecting an end-of-year surplus of similar size.
"It's just a bit early to say how it will turn out, but I think there are one or two signs there that there will be something worthwhile there," he said.
The figures showed year-to-date surpluses against budgets across a range of council departments, including $1.2 million for staff costs, including unfilled vacancies, and $1.5 million in asset operations and maintenance.
However, Mr Stephens said the situation reflected "an element of seasonality" within council spending. That included within the council's transportation operations department, which had a $2.1 million year-to-date surplus but was expected to consume most, if not all, of it during "road building season" over the remainder of the financial year to June 30, he said.
He would not be drawn on the likely size of final surplus yet, but staff would be keeping "a close eye on it" over the next few months.
The council's policy for surpluses spelled out three priorities, beginning with debt repayment and followed by further investment or carrying forward surpluses to the next year's budget, he said.
Cr Richard Thomson, speaking at the meeting yesterday, suggested a surplus could be used to top-up the Waipori Fund, while Cr Jinty MacTavish suggested surpluses be used to avoid further dividend withdrawals from the fund.
Mr Stephens agreed that could be an option to be considered, as it would have the same effect as debt repayment.
"It means less debt."
The Waipori Fund's latest quarterly report, to March 31, was also presented to yesterday's meeting, and showed its total value stood at $69.7 million, up $2.12 million in the last quarter and $906,000 for the financial year to date.
Cr Kate Wilson said uses for any surplus was "something we all want to turn our minds to", and committee chairman Cr Syd Brown said staff would report on options at the next finance, strategy and development committee meeting.
