The unaudited figure, after capital grants and contributions, compares to the budgeted deficit of $200,000.

Council’s surplus before capital grants and contributions is expected to be $1.4 million compared to the forecast $2.65 million deficit.

In a year-end financial review to be considered at Tuesday’s council meeting, finance director Anthony O’Reilly said all funds finished in surplus.

“(The $7.8 million surplus) was an overall improvement during the year of $8.1 million compared to the original budgeted deficit of $200,000,” Mr O’Reilly said.

“All funds at year end showed favourable results compared to their original budget position.”

However Mr O’Reilly said the general fund continued to be a “key challenge” – it posted a $1.5 million deficit before grants and contributions.

This was still less than half the originally forecast deficit of $3.4 million.

Waste, water and sewer funds posted unaudited operating surpluses before and after grants and contributions.

Contributing favourable factors to council’s overall position included more than $4 million in additional grants and contributions, $1.1 million in additional user charges, lower interest, $1.9 million savings in water and sewer operations, $700,000 employee cost savings, favourable investment revenue, lower interest expenses and lower depreciation of assets.

Unfavourable variations included expenditure required due to the additional grants and contributions and the estimated book value for infrastructure, written off as $3.2 million.

Mr O’Reilly said ensuring adequate funding for infrastructure renewal and maintenance to sustain service levels and meet the Fit for the Future benchmarks was challenging.

“The general fund continues to be the focus of financial sustainability efforts,” Mr O’Reilly said.

“Over the next 10 years the achievement of operating surpluses, combined with a dividend strategy and borrowings, will redirect funds and allow increased spending on infrastructure renewal programs.

“This will reduce the backlog to within the Fit for the Future target range by 2024-25.”

Staff are preparing the draft accounts for audit and final figures may differ after audit adjustments and estimate revision.

The audit report is expected in October.