Cr Lee Vandervis raised the issue at last week's finance, strategy and development committee, claiming DCHL was borrowing $6 million of the $15.7 million dividend it expected to pay to the council for the 2012-13 year.
That prompted a warning from Audit New Zealand audit director Ian Lothian to councillors the practice of debt-funded dividends was "not sustainable in the long term".
His comments followed a similar warning by Warren Larsen, in his review of DCHL last year, and a letter published in the Otago Daily Times by council watchdog Calvin Oaten on Wednesday.
However, Mr Dodds would not confirm whether debt-funded dividends were continuing when contacted last week.
He said he was "not commenting on other people's numbers" and was also "not offering you mine", although he accepted Audit New Zealand's views were correct.
That was despite telling the ODT in August last year loans would continue to be used to part-fund dividend payments, including in 2012-13.
"How much will need to be borrowed we can't say," he said at the time.
Exactly when the company would cease the practice would be dependent on "some future decisions", he said last week.
Asked if that amounted to confirmation some debt-funding of dividends would continue, Mr Dodds said he was "not sure" that could be assumed.
That would only be confirmed when DCHL accounts were released in September, he said.
However, Mayor Dave Cull said when contacted it was "probably" true some borrowing for dividends was continuing.
The Larsen report had clearly identified DCHL was unable to sustain debt-funded dividend payments, which the new DCHL board had also accepted.
Rather than going "cold turkey", DCHL had agreed to pay its dividend for 2012-13 even if more borrowing was required, but to change policy to cease the practice after that.
There were no guarantees that could be achieved, but the message to the council was clear, Mr Cull believed.
"We've just got to get off the addiction as fast as we can."
Statements of intent for DCHL's six companies also confirmed the amount companies could spend without approval had been reduced, in some cases by half.
Mr Dodds said the "tightening up" aimed to increase DCHL's control over spending and debt levels, but was not a response to any one investment.
