Tauranga City Council's finances for the first quarter are booming, with a $2.6 million operating surplus for the four months ending October, compared with the budgeted deficit of $600,000.

Based on the trend, council finance staff are expecting an operating surplus for the full year of $10.8 million, $3.3 million more than earlier budgeted.

Council finances for the first quarter are booming.

The report was received by the city council Finance and Risk committee this week.

This surplus is driven by higher-than expected revenue from building services and property leasing, and lower-than budgeted expenditure on depreciation, repairs and maintenance and operations.

Because of this total, council spending projections for the full year are below budget.

This is because of downward revisions to depreciation charges on infrastructure assets based on updated asset figures, and delays in expenditure related to forestry harvesting in water catchments.

Revenue projections assume that building services and leasing revenue will continue to be favourable, offsetting the delay in forestry harvesting revenue.

Repairs and maintenance spending is tracking behind budget in many areas of the business, consistent with timing of expenditure in previous years.

The capital programme is tracking behind budget with a total spend for the first four months of $22m. Potential carry forwards have been identified in the Southern Pipeline, Marine Precinct and Greerton Library Projects.

No capital programme overspends that are more than $50,000 above full year budget have been recorded to the end of October. One project has been tendered where contract price exceeded budget and offsets are being investigated.

Other figures received show rates revenue is on budget at $38 million. The council is budgeting for $114.2m for the year.

Forecast net debt is $10.3m less than expected at $387.5m. Expected net debt for the full year is $398m. The figures also pull back the debt-to-revenue ratio by six per cent to 211 per cent.