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Spending freezes and tight restrictions on council funds has trimmed millions from a massive overspend predicted earlier in the year.
But leading councillors have warned public spending in Medway will be under even more strain due to the impact of coronavirus hitting income hard in 2020.
Chiefs at Medway Council previously said the authority needed to save almost £7 million in last year's budget to balance the books in 2019/20.
A moratorium on all non-essential spending was issued as the council grappled with spiralling costs.
But a report discussed by cabinet members this month reveals the council has come in under budget for the financial year with some £2.8m saved into reserves.
Council leader Alan Jarrett (Con) told cabinet colleagues balancing the books had been a "significant achievement" after facing "varied pressures" throughout the year.
He said: "It's important to say that cabinet colleagues have worked very hard with senior officers to bring this budget to a balanced position."
But he warned the council's reserves – which the Labour opposition says are at a dangerously low level – are "going to be desperately needed" and must be "harnessed in a frugal way" as the authority looks to recover from the turmoil caused by Covid-19.
The leader admitted the £11m available in general reserves "is not a great sum" against the council's annual £1bn budget – half of which is spent on council services and every day spending to run the council.
Several departments recorded underspends against their set budgets by the end of the financial year.
But adult social care services and the under-fire children's services department – which has seen huge areas of investment to help it improve from its poor Ofsted rating last year – saw overspends.
Cllr Howard Doe, deputy leader of the council, said the balancing of the books had been "a useful thing" allowing the council to add to its "small pool of reserves".
He said: "I wouldn't want people to run away with the idea it's something we've achieved easily. It's been extremely difficult for everyone.
"We've had to keep a watch on this budget and not appoint staff we'd like and ask people to do additional work and they've all pulled through. I'm very proud of the workforce for doing that."
But he said the past 12 months will be "nothing compared to the year that confront us".
"We've virtually had to shut down almost all our income producing activities whilst a lot of the expenditure remains," Cllr Doe added.
"Money that goes back to reserves will go nowhere near towards dealing with the shortfall in income that faces us."
He said Westminster would have support local government to "fund it properly" otherwise Medway and many other councils would face "extreme difficulties".
"After shouldering the frontline burden we now need to be given the tools to get our books back into order," Cllr Doe said.
Cllr Adrian Gulvin said managing to put money into reserves and coming in under budget had been "a tremendous effort".
Cllr David Brake, who is responsible for adult social care, said: "We're a people's led service which means in real life if a person or family comes along it's down to us to respond to that request and need.
"Invariably it leads to significant pressures on the budget and whilst we do our best to come within it, unfortunately because of personal and individual pressures it is overrun by things out of our control.
"Mental health services is one of the largest areas of pressure with supported living accommodation, being a people led service sometimes these issues come out of our request."
