The council increased its capital spending significantly in the past year to carry out work such as replacing old pipes, but has in recent months looked to slow down delivery of its programme amid escalating costs.
A report for a council meeting tomorrow shows staff do not expect a slowdown to take effect until the 2023-24 financial year.
It has been recommended the council authorise chief executive Sandy Graham to draw down debt up to a total of $480 million in the meantime.
Council debt was about $334 million at the start of the 2022-23 year and at that stage it was expected to climb to more than $440 million, possibly up to $445 million by the end of the period.
Permission to exceed this level requires a vote from the council.
Capital spending has exceeded the budget for months and council staff essentially determined they would run out of runway to bring it back into line with budgets by June 30.
Staff also recommended the council note the capital budget for 2023-24 was being "recast to sustainable levels" and in line with the 2021-31 long-term plan.
Historically, the council struggled to get through all of its planned capital programme, but it rectified this and was in delivery mode before the recent shift to apply the brakes.
The proposed extra $35 million uplift this year was to account for a $25.5 million overspend on capital expenditure or budgeted savings not eventuating, and a $9.5 million contingency.
The contingency was to allow for unforeseen events and to manage cash flow timing.
If the full $35 million of additional debt is needed, this will result in increased borrowing costs of almost $1.7 million for the 2023-24 year.
The increase in debt was required to ensure the council could fund the continued delivery of the capital expenditure programme, staff said.
"Once capital works get into the delivery phase, it is difficult to pause works."
Most of the additional debt was attributable to Three Waters, council staff said.
The Government’s Three Waters reform programme included the creation of water service entities to take over functions from councils, and the city council anticipated some debt would be transferred to one of the entities, staff said.
There were still "matters to be confirmed around transfer of debt", but a meeting today was expected to provide clarity.
