THE City of Greater Bendigo has vigorously defended the Bendigo Art Gallery's $500,000 budget blow-out.
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Wednesday's council meeting revealed the gallery's running costs came to $2.15 million in the 2013-14 financial year - $500,000 more than budgeted.
But City of Greater Bendigo City Futures director Stan Liacos said the council had full confidence in gallery director Karen Quinlan, saying this was the first time the gallery's running costs had gone significantly over budget.
"The gallery has a magnificent track record in delivering outstanding economic value for greater Bendigo and operates in a financially sustainable manner," he said.
"The 2013/14 year was an anomaly and it's important to recognise the long track record of having operated overwhelmingly under budget for many previous years."
He said construction works on gallery's new wing hindered ticket sales because management had to close the gallery on more occasions than they expected to.
He said the gallery didn't receive a government grant it had applied for and the Modern Love exhibition didn't attract as many patrons as anticipated.
"It was the only exhibition that Karen and her team staged in the past six years that didn't meet their own ambitious targets," he said.
At Wednesday's council meeting Cr Helen Leach said Bendigo residents weren't benefiting from the gallery because the majority of patrons were tourists.
But Mr Liacos said many Bendigo businesses relied on tourist dollars to survive and tourists provided the city with an economic boost.