Behind closed doors at last week’s first full council meeting this term, interim chief executive Dr Pim Borren asked councillors for direction in dealing with the "unbudgeted challenges".
The budget challenges come after the last term ended with councillors trying to find a way to end five years, from 2017 to last year, of operational deficits at the council.
When councillors approved an 18% rates rise in June, they voted unanimously to advise staff they expected a balanced budget this year.
Then in September, the council’s audit and risk subcommittee called for the chief executive to prepare a report on "how to achieve an annual balanced budget and how to achieve that budget when unanticipated expenditures arise" to be presented to councillors after the October election.
Work towards achieving a balanced budget was also to be monitored through regular reporting to the subcommittee this term, the subcommittee said.
The council had been using its reserves to cover shortfalls in recent years.
Dr Borren’s first report to councillors this term, included in the public meeting agenda papers, noted he wanted to give councillors an "early heads up" on the matter.
"We have had some significant and unbudgeted challenges to overcome so far in this financial year," he said.
"I am looking for a steer and direction from council in terms of how we deal with those challenges.
"They are impacting on our current financial forecast."
After the meeting, when answering questions from the Otago Daily Times, Dr Borren and newly elected chairwoman Gretchen Robertson issued a joint response.
The council had $2.3 million of damage caused by three floods in July this year.
Another $750,000 was spent on the increase in bus driver wages and a further $1million in staff costs because of the high rate of inflation.
Lastly, $500,000 was required to cover additional commissioner costs, after the High Court decision in July that required the council to renotify the freshwater aspects of its regional policy statement, they said.
"Council approved a budget variation in principle," Dr Borren and Cr Robertson said.
"They recognised the unanticipated nature of each of these costs and also preferred to continue the current momentum for ORC [in] growing our work programme across the region.
"They remain cognisant of the fact that our rates are amongst the lowest nationally, as rates per capita."
The full first-quarter financials and programme reports would be available at the next council meeting, in early December, they said.
