The Isle of Wight Council is "very close to the line, but not yet over it" according to its leader, as scrutiny members prepare to discuss its predicted £10 million shortfall caused by the coronavirus pandemic.
Councillor Dave Stewart says the local authority has "looked down underneath the sofa and behind the cushions" to keep "the books balanced".
His comments come after it was revealed that the council has forecast a funding gap of £9.8 million due to the pandemic.
That is after it secured £9 million in emergency funding from the Government.
Speaking to Isle of Wight Radio, Cllr Stewart said:
"We will be presenting all the figures to the scrutiny committe and talking about this at Cabinet this week. Providing we're careful and being very thoughtful over what we do... what we don't need is a second wave of coronavirus. Nobody wants that."
Asked if Islanders could see cuts as a result, he said:
"Well we have got ourselves to a place where we didn't think we'd have to reduce anything else. We were pretty well able to balance the books. Unfortunately as you have rightly said we have had to use reserves we weren't expecting to use....
"We have done a lot of work. We have made the case to Government. I have reminded them that we have an Island Deal approved and agreed and we haven't forgotten that."
This evening's meeting of the scrutiny committee will also discuss the local authority's handling of the crisis.
The meeting starts at 5pm - and can be viewed online.
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