However, if the council is of the mind to push the envelope in its long-term planning next year, a spanner could be thrown in the works.
The council has been a member of the Local Government Funding Agency (LGFA) since last November and one of its requirements is interest on group debt cannot exceed 30% of rating revenue.
Council chief financial officer Gavin Logie told councillors last week the council and its group of companies were headed for compliance in 2023-24, but it would be "very close".
There was less certainty about subsequent years for reasons that included it not being known yet how large rates rises could be and where interest rates might head.
It will also be clearer after this year’s general election how much debt the council might carry in the years ahead because debt connected to water assets could be taken off its books, depending on the election result.
The council last week decided to bring forward $35.2 million of Three Waters capital spending to improve resilience of the network.
It is understood this will not jeopardise its position with the LGFA, although the decision brings the council closer to the 30% cap.
Cr Steve Walker asked at the council meeting what consequences there might be if the council breached the LGFA’s debt-interest limit.
Council staff were unsure and the Otago Daily Times followed this up.
Dunedin City Treasury Ltd chairman Keith Cooper said the council and its group of companies needed to manage their affairs in a manner that did not breach covenants with the agency.
The treasury was comfortable no breaches of covenants were imminent, he said.
"If we were going to breach, we wouldn’t borrow the money," Mr Cooper said.
LGFA chief executive Mark Butcher said Dunedin’s situation was unusual because the way the council and council companies borrowed money meant they were treated as one group.
If a breach was forecast, the agency would have to ask its shareholders to permit it, he said.
The council did not respond to a question from the ODT about precisely how close the acceleration in Three Waters spending took the council to the LGFA cap.
The $35.2 million acceleration would be used in part to fund upgrades of water and wastewater treatment plants, starting with the Green Island and Mosgiel wastewater treatment plants and Waikouaiti and West Taieri water treatment plants, a council spokesman said.
"It will also allow us to replace more of our ageing pipes sooner, as well as increasing the pace of other planned renewal and upgrade work across the network."
