Mayor Adam Shultz has hailed Lake Macquarie City Council's "responsible" fiscal management after $33.4 million in debt was paid down over the past financial year.
The draft annual financial statements for 2025-26 will be delivered on Monday night at the council's ordinary meeting at the Hunter Sports Centre.
The business papers reveal that the council posted a $19.1 million operating surplus before capital revenue for the financial year.
It was an impressive bounce back after the council recorded a $6.9 million loss in 2024-25.
That was due to the double sting of a $6.5 million reduction in an advanced payment from the federal government's 2025-2026 Financial Assistance Grant, and a $7.5 million loss in disposal assets in the 2024 Speers Point administration building fire.
But it was the reduction in total borrowings that most impressed Cr Shultz.
The council's debt was reduced by 15.05 per cent, from $222 million to $188.6 million.
"That's a huge and a great outcome for the city," Cr Shultz said.
"We're leaning into being a cost-conscious council and making sure that we're financially sound and responsible and fit for the future."
Cr Shultz said the council's $19.1 million surplus was a pleasing outcome, but the reduction in debt was a strong focus.
"To pay down more than $33 million of debt in a 12-month period is a huge win," he said.
"I've been on council for the past 10 years, and we haven't been able to achieve anything like that in my time on council."
A spokesperson for the council said the result was due to an "ongoing focus on responsible financial management" but was more circumspect about achieving the surplus.
"It is important to note that the result is exaggerated by some positive and unplanned improvements," the spokesperson said.
"In particular, the prior payment of a federal assistance grant, global financial markets rebounding after the global fuel supply crisis, and a positive legal settlement.
"Our underlying achievement when these one-off events are removed is a $1.4 million surplus.
"This underlying surplus is what we are most proud of, as it represents hundreds of small decisions over the course of the year, demonstrating our capacity to rise to challenges as they arose."
The council also benefited from $7.4 million in legal recoveries. That figure primarily relates to the resolution of a legal matter that was settled and is subject to confidentiality agreements.
Cr Shultz said the reconstruction of the Speers Point administration building was likely to eat into the council's surplus in the next financial year.
The fire caused at least $38.5 million in damage to the building, and insurance will not entirely cover the cost of the rebuild.
"We'll know more in due course as to what that looks like, but yes, there will be a significant cost to Lake Macquarie City Council in terms of the gap between the insurance proceeds and what it costs to get our administration centre back up and running in the 21st century," Cr Shultz said.
"It was an old building, built in, I think, 1979, so nearly 50 years old.
'There's a lot to be done over the next 12 months or so, but also the financial impost will be significant as well."
