Clutha District Mayor Bryan Cadogan said a government move to allow council-controlled organisations to borrow up to 500% of operating revenue could allow them to take on more debt, but this was not greatly helpful for ratepayers.
Some eye-watering figures were around, but this was not new and "it’s still as much use as giving a drowning person a glass of water", he said.
"The government is providing no additional support, consigning councils to still find solutions with the tools available to them — namely rates and debt increases — so nothing has changed there."
Ability to have a longer term such as 50 years to pay off a loan reduced the annual cost "minusculely, but increases the duration of pain significantly".
The government envisaged councils could club together to set up companies.
Mr Cadogan said progress had been happening in getting councils to work together more.
However, yesterday’s announcement was "not the cavalry coming over the hill that’s required and really just defines in more explicit terms the government’s ongoing detachment from the issue".
It also reinforced the government’s unwillingness to accept "the present offerings will only alleviate, not rectify the situation", he said.
Other mayors in the South were more measured or reserved judgement.
"But in terms of affordability, I struggle to see how our ratepayer base of 6000 will be able to afford almost three times the amount of debt we have now."
Mr Bell was confident the Gore District Council could partner with other councils.
"It is important to our ratepayers that we do not get lost in the noise and are still able to deliver high-quality service to local people," he said.
Creating a company model that was potentially viable would require the council to "work with anyone willing to work with us".
Central Otago District Mayor Tim Cadogan said yesterday he had a preliminary look at the relevant documents and could see some potential.
He expected real benefits to be limited to councils able to work together to create larger companies.
Waitaki District Mayor Gary Kircher said the announcement was timely.
"Some councils are right at the limit of their borrowing now," he said.
"For us, we’re certainly not there, but our debt is growing, largely on the back of water upgrades."
The Waitaki District Council was having discussions both with local government in Otago-Southland and South Canterbury.
Mr Kircher thought more radical measures would still be needed to ease looming debt pressure on councils.
"We’ve got well over $400m Waitaki needs to spend on water over the next decade and, basically, our ratepayers can’t afford that."
A Dunedin City Council spokesman said staff and councillors would assess material in the next few days and participate in a Department of Internal Affairs briefing.
Minister of Local Government Simeon Brown said the Local Government Funding Agency (LGFA) would be able to lend to water council-controlled organisations (CCOs) immediately.
"LGFA will support leverage for water CCOs up to a level equivalent to 500% of operating revenues — around twice that of existing councils — subject to water CCOs meeting prudent credit criteria," Mr Brown said.
"This will enable councils to better manage debt and make essential infrastructure investments without drastic rate hikes."
The Labour Party said the government had pushed councils "under a borrowing bus".
