The figures disclosed in the June 23 council meeting estimated the council would operate at a net loss of $2.41 million over the next year, when factoring in $2.36 million in asset depreciation.

Under the Local Government Act councils are required to fund asset depreciation as part of their budgets.

In other news:

That funding is done through rates revenue.

The report prepared by acting general manager Marissa Walters said it would be several years before council could fully fund depreciation without operating at a deficit.

Councillor Rob Churchill said the budget was one the council needed.

"It is an austerity budget, I think to describe it at its best, and it is most appropriate I believe in the financial situation that we see ourselves in," he said.

He said in the current financial climate it was hard to predict what spending would be required going forward.

Earlier this year the council froze rates in order to help residents who were struggling during the COVID-19 pandemic.

Cr Cherly Arnold raised concerns about the estimated $700,000 increase in employee costs despite the council divesting itself of areas of operation.

Ms Walters said council would be required to hire new staff to meet statutory obligations which may also include the creation of new positions.

Mayor Debbie Wisby added that the figure could include the cost of providing past employees redundancies.

She said council had already made the decision to divest itself of three visitor information centres which would save them $360,000 annually.

The estimates are scheduled to be reviewed during the September council meeting.

At the same meeting on Tuesday council voted to pass a motion which would limit spending on new projects.

The motion means over the next 12 months the council will in general only fund asset renew projects and asset upgrades or new assets which address community safety.

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