The board has released a six-page "statement of proposal" about options for funding the grant, which it pledged to the Maniototo Hospital rebuild last year.
Two of the three options involve selling one or both of two Lower Gimmerburn farm properties owned by the board, which were identified as a possible source of income for the rebuild grant.
But the board prefers a third option, of borrowing $1,873,000 and using $127,000 from prior land sales.
That option would result in the introduction of a new targeted rate of $48 per rating unit (title) per annum for 25 years, to repay the loan.
If the board was to sell both farm properties, it would still use $200,000 from prior land sales, and increase rates by $18 per annum to cover the loss of lease income.
If the board sold just its 76.8ha Maniototo Rd farm property, but kept leasing out its 177.8ha Wilson Rd farm, it would use $127,000 from prior land sales and borrow $873,000. The loan would be repaid from farm rent from the Wilson Rd property, and a targeted rate of $31.30 per annum for 25 years.
The statement of proposal said: "the [Maniototo] community did express interest for land sales", but the board had several reasons for preferring to retain the properties and borrow the money.
They included retaining income streams from rent, and the possibility of future capital value gains.
The board has already renewed the leases on the two properties until March 31, 2019, and has asked for expressions of interest for future leases.
Farmer Mark Harris has leased the two areas since 2008.
Submissions on the board's statement of proposal close on November 12.
