Farooq Portelli disagreed with a recent Department of Local Government report into the financial performance of councils, indicating that the council may have trouble meeting its financial commitments.

Mr Portelli said the department had adopted a recommended ratio of available funds to financial obligations, saying that a ratio of less than 1.5:1 was "unsatisfactory".

The report indicated that Liverpool Council's ratio was 1.29:1.

"But our ratio has increased since this report was compiled," Mr Portelli said.

"It's gone up to 1.4:1 now which is almost at the recommended level.

"And we've got $90 million in the bank, so we can always pay for things on time.

"Our auditors Price Waterhouse Coopers have deemed the council to be in a sound financial position for the past several years."

Mr Portelli said these sorts of reports were often misinterpreted.

"These indicators can be misleading, because a council can be debt-free, but that may have come at the expense of providing necessary services," he said.