PORT Stephens Council's budget is in better shape than any council in the Hunter.
The council crawled out of its multimillion-dollar financial black hole of 2009 to record a surplus last financial year.
At a time when other councils are struggling and being forced to make widespread cuts to services and staff, Port Stephens recorded an enviable $1.6 million surplus last financial year.
In 2009 the council had an underlying deficit of more than $10 million. It has spent every financial year since then painstakingly reeling it back in.
Council financial services manager Tim Hazell said the council returned to surplus two years ahead of schedule.
"We'd have to be one of the most envied councils," Mr Hazell said.
The council also received a positive bill of health from independent auditor PricewaterhouseCoopers. It said the council's financial position was improving.
However, it had fallen below acceptable industry benchmarks in some areas. These included civic assets, especially sealed and unsealed roads, drainage, kerb and guttering, which were described as being in poor condition.
The council has now turned its focus to asset renewal.
Mayor Bruce MacKenzie said he was very proud of the result, which had been achieved without council having to increase rates by more than the required minimum.
"This is the best council staff-wise and elected people I've been involved with for 44 years," he said.
Port Stephens has the lowest rates in the Lower Hunter at an average of $950, compared with Maitland ($986), Newcastle ($1051), Lake Macquarie ($1141) and Cessnock ($1064).