An investment fund set up by New Plymouth District Council has lost $28.5 million.
The management company for the fund says it's a relatively good result given market conditions.
An annual contribution of $21.5 million to council funds will continue for at least another year.
The New Plymouth Perpetual Investment Fund was set up in late 2004 after the council sold its stake in Powerco.
Riding the bull market, the fund peaked last June at $324.7 million.
But in the two quarters to December 2008, it lost roughly 9.5% of its value.
Another quarter of such losses would see the fund shrink below its initial value of $259.4 million.
Fund manager, Taranaki Investment Management Ltd, predicts further tough times.
After next year, the payment to the council will be re-set using criteria including the current value of the investments.