Community and corporate services director David Rae said the budget had predicted a $950,000 surplus, but the final tally showed the council operating $3.88m in the black, requiring a "variation to budget" of $2.93m.

Mr Rae said while expenditure had blown out by $2.5m, revenue was $5.5m higher than expected, thanks to a number of government financial assistance grants coming into council coffers early.

He said the council was "starting the new financial year on a good footing".

"The financial indicators remain strong. As an example the working capital ratio is at 295 per cent and asset renewal at 133 per cent," he said.

The working capital ratio is a measure that balances assets against liabilities. Essentially the value of the shire's assets is three times the value of its financial obligations. Meanwhile the asset renewal ratio compares the funding set aside for asset renewal with the projected renewal costs, so staying above 100 per cent means council is able to maintain its assets without digging into its savings.

Both the working capital and asset renewal ratios are forecast to drop significantly over the coming four years.

Councillor Jim Doukas asked Mr Rae whether the $2.93m favourable budget variation was "a straight out profit" that the council could go out and spend. Mr Rae said unfortunately it wasn't.

"This is an accounting result, which is very different to a cash result," he said.

"Do we have surplus funds that we can go and spend... No we don't."

Cr Doukas said he was impressed with the result nonetheless, and noted it would have been even better if not for some unforeseen expenses.

"We did have extra expenditure to do with the pool (nearly $100,000 for Belfast Aquatics in Port Fairy), we had COVID... we had rate relief, licence and fee relief for businesses, for furniture on the street and that sort of thing," Cr Doukas said.

"Taking all things into consideration the councillors and the officers I think have done a great job to get us into this position."

Cr Karen Foster agreed, saying the council was "well positioned" to weather any financial "headwinds" in the coming year.

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