Manager Karen Noble told the Central Otago District Council Wastebusters faced a $334,744 deficit by the end of June next year.
But council corporate services manager Heather Kinsey said the council could not agree to support Wastebusters for six months because the amount required was more than $150,000 and would have to go out for consultation.
Mrs Noble asked councillors to at least help Wastebusters get through Christmas and New Year, which is the busiest time of the year.
"You'll be getting sick of Wastebusters coming to you for money, but this one is a wee bit out of our control," she said.
Council assets and contracts manager Murray Washington said it would not cost as much to send the rubbish to landfill, but councillors had agreed the council wanted to recycle and encouraged that.
He agreed the cost of supporting Wastebusters was high.
"We can't fund deficits forever and we have cleared a place for stockpiling in the meantime."
An Auckland glass company was considering taking the glass stockpile but that would be a one-off.
Mr Washington said the issue would be identified as a significant risk in the coming round for the long-term council community plan.
The large deficit concerned councillors who were reticent to commit the council to six months of support and large expenditure.
"If this recession continues for three years we would be looking at $1.8 million," Cr John Lane said.
Cr Clair Higginson said sending all the refuse to landfill was a more expensive option.
Mayor Malcolm Macpherson said the council had always agreed if WasteBusters was not there it would be more expensive to deal with refuse.
"We are facing a significant exposure and are you [councillors] happy with the way our interests are being looked after?" Dr Macpherson asked.
The council voted to pay all costs to supply the core service to operate Central Otago Wastebusters for the next three months and have staff review the situation weekly.
Any revenue would be deducted from those costs.
