The Dunedin City Council's $72 million Waipori fund will provide the necessary cash flow to the council for the next financial year, but councillors were warned they would be unable to ask for an increase in returns in the future.
Finance and corporate support general manager Athol Stephens said the equity aspects of the fund "have taken a hiding".
"I can be frank about that."
The fund was established in 1998 using the proceeds from the sale of the Waipori electricity generation scheme, and has been a valuable contributor to the council's finances.
Mr Stephens said reporting on the fund showed the situation up to December 31, 2008.
The dividend had stayed up, but would drop in the fourth quarter, he said.
The council was asking for $4 million, and the cash flow "at the moment" was $5 million.
"I have to say that our projections forward are bound to be more cautious and more conservative.
"By and large, the council should not be asking for a lot more money from the fund."
While the situation was acceptable at present, he said councillors should be aware BHP, for instance, a company the fund had investments in, had just laid off 8000 workers.
Cr Dave Cull asked whether it would be prudent to take less money from the fund, and let its value build.
Mr Stephens told him the situation was acceptable for the next financial year, but it might be a good idea to reconsider the matter after that.
